Colorado business owners do their best to make their business thrive, even in the face of tough economic conditions. When tough economic times hit, however, it can be difficult for even the best business owners to keep making a profit. This can make for some stressful times for the business owner, particularly when the business is family-owned.
Fortunately, family-owned businesses have options when they are struggling with debt. By filing for Chapter 7 bankruptcy, business owners can liquidate assets in order to pay off debts. In turn, the business owners will emerge with a fresh start after Chapter 7.
This is what a 68-year-old family-owned business recently did after dealing with difficult economic conditions. The business, which operated a commercial refrigerator manufacturing and installation facility, ran into trouble after it defaulted on a $300,000 loan. The company had recently laid off at least 30 employees, but found it necessary to file for Chapter 7 after not being able to pay its debts.
The case illustrates that Chapter 7 for businesses may be an effective option to deal with overwhelming debt. By discharging the debt in bankruptcy, the debtor will no longer be liable on most debts. Moreover, the process plays out relatively quickly, as the discharge may be issued within 60 to 90 days after the first meeting of creditors. The timeline in a particular case will depend on whether there are objections or particular issues that need to be sorted out by the bankruptcy court.
Debtors can work with their bankruptcy attorney to determine what these issues may be in their individual case, and how the process can proceed in a timely manner in order to receive the debt discharge and start anew.
Source: The Times Tribune, "Penn Refrigeration files Chapter 7," Denise Allabaugh, Oct. 10, 2013