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Wipe Out Personal Liability with Small Business Bankruptcy

Small business owners often worry about being held personally responsible for business debt and losing business assets in a bankruptcy. This is a big burden when you’re trying to run a business while managing debt.

At Wink & Wink, we can help small business owners get rid of their personal liability for business debt, keep their business assets, and continue running the business that has supported them for so long.

As small business owners ourselves, we understand your fears and your hopes. That’s why we will educate you on all your options in attempting to achieve these two goals.

1. Let you stay in business with assets after small business bankruptcy.
2. Get yourself out from under the liability for personally guaranteed business debts.

Small Business Bankruptcy Options

In personal bankruptcy, many are eligible to get out of debt through a Chapter 7 or Chapter 13 discharge. However, small business bankruptcy is not so straightforward because a small business is not eligible for discharge in either Chapter 7 or Chapter 13 bankruptcy. While there is a Chapter of bankruptcy designed for businesses, Chapter 11, it very expensive and typically not viable for most small businesses.

Because of this complexity, bankruptcy for a small business owner requires a plan. The plan we can help you develop will depend on several factors, including the structure of your business—a sole proprietorship, LLC, or corporation.

Often, it is preferable to operate as a sole proprietorship in bankruptcy because it can enable the small business owner to claim the “tools of the trade exemption”. In Colorado under this exemption, sole proprietors may keep up to $20,000 worth of business assets such as tools, business equipment, and inventory in order to make a living after filing for bankruptcy.

This is one consideration for a small business owner when planning for bankruptcy. There are typically many factors to consider, which is why it is important for a small business owner to seek the advice of a bankruptcy attorney prior to filing for bankruptcy.

Watch this video of Attorney Michael Wink on CBS 4’s Haystack Help discussing small business bankruptcy to learn more.

Position Yourself to Succeed After Small Business Bankruptcy

In order to get the most benefit from small business bankruptcy, you must plan appropriately before filing for small business or personal bankruptcy. Let us explain your rights and your options by scheduling an appointment today.