Businesses of all sizes incur debts regularly to support their operations. Abrupt changes in the economy or unexpected liabilities can disrupt a company’s ability to repay its debts. Depending upon the type of entity and debt involved, business owners may face personal liability for the company’s debts. Bankruptcy may be a business’ only option to wind down the operations or restructure corporate debt. Ben Cushman is an Olympia attorney who can help clients protect their reputations and the businesses they have worked hard to build. Ben has been licensed to practice law since 1996 and works with clients throughout the state. Contact us today to schedule a consultation. We also serve Tacoma as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.
Olympia lawyer advising companies with business debts in bankruptcy
Business debts come in many forms. When they become overdue or impossible to pay, it may be necessary for the company to seek relief through the bankruptcy process. Many business debts are dischargeable in bankruptcy. These include certain bank loans, real estate lease delinquencies, equipment purchases, credit card debt, payments to vendors, and lawsuit judgments. The type of bankruptcy available to a business will largely depend on the corporate structure of the business. For instance, a sole proprietorship is considered an extension of the individual with no separate corporate existence. A sole proprietor’s business assets and debts are not separated from their personal assets and debts. As a result, the personal property and liabilities of the owner would be subject to any bankruptcy filing. Corporations or limited liability companies, on the other hand, generally provide a liability shield for their owners because they are distinct legal entities. Shareholders of a corporation, therefore, will not be personally liable for business debts in bankruptcy.
Other considerations for businesses exploring bankruptcy include whether or not the business must close or can continue to operate during the process. Eligible businesses can file for Chapter 7 bankruptcy allowing them to liquidate assets and discharge debts quickly. This may be an attractive option because it is a transparent and relatively fast, but it also may result in a lower sale price than other options. If, however, a company wishes to continue operations, Chapter 11 bankruptcy may be more appropriate. Often referred to as a “restructuring” of the business, Chapter 11 allows the debtor to renegotiate with creditors, retain employees, and honor or disallow contracts to rebuild the organization. Depending upon the size of the entity, the debtor company’s reorganization plan must be accepted and monitored either by a committee of creditors or by the bankruptcy trustee. This process allows businesses to eliminate or reduce business debts while providing breathing room to continue functioning.
Business bankruptcies can be complicated and involve complex legal arguments. Ben Cushman is an Olympia lawyer with experience in such matters. His understanding of business law issues and the bankruptcy process will help ensure that your company’s interests are protected. Bankruptcy can be a difficult decision but can help protect owners and businesses alike in the face of financial hardship. We will focus on your legal issues so that you may focus on rebuilding your company’s future. Contact us today.
Washington lawyer focused on client service through business bankruptcy
Ben is an attorney who understands that running a business is demanding. A company’s ability to meet payroll, pay vendors, and repay debts is dependent upon many factors. Ben knows that economic shutdowns and government restrictions can cause unexpected financial hardships. His business clients receive the highest level of customer service throughout any legal matter. Ben promptly responds to client requests and questions and takes pride in being a trusted business advisor to companies in Olympia and throughout other areas of Washington.
Our firm also serves the Thurston County cities of Lacey, Tumwater, and Yelm, the Pierce County cities of Tacoma, Puyallup, and Lakewood, the Lewis County cities of Centralia, Chehalis, the King County cites of Seattle, Auburn, Bellevue, Burien, and Federal Way, as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.