Law

Owners ask about creditors first. The questions that keep them up at night are usually about people.

What happens to the crew on Friday? What about the lease? Who gets paid first out of whatever is left?

Those answers are set by statute, not by the owner.

Final Paychecks

Wages earned before the filing become claims against the estate. They are not bills the company simply pays.

The Bankruptcy Code gives those wage claims priority. Pay earned in the 180 days before the case moves near the front of the line, up to a per employee cap that gets adjusted for inflation every few years. Anything above that cap drops back with ordinary unsecured debt.

Two things owners get wrong here:

• Priority does not mean guaranteed. It means better position. If the estate is empty, a priority claim still pays nothing.
• Paying employees out of company funds right before filing can be undone. A trustee can pull back transfers made shortly before the case.

Employee contributions to a benefit plan get similar treatment, with their own limits.

Payroll Taxes Are a Different Animal

Money withheld from a paycheck was never the company’s money. It belonged to the employee and was held for the government.

That is why trust fund taxes do not go away in a business filing. The IRS can assess them personally against anyone who had control over payroll decisions. That includes officers, and sometimes a bookkeeper with signing authority.

A Chapter 7 that closes the company does not close that exposure. Anyone weighing corporate bankruptcy options for a small business should have this priced out before filing, not after.

The Commercial Lease

A lease is a contract, and the Code gives the debtor a choice on contracts. Keep it or walk away.

For commercial space, the deadline to decide is 120 days from filing. A court can extend that once, to 210 days total. After that the lease is treated as rejected and the space goes back.

Rejecting a lease does not erase the landlord’s claim. It converts it. The landlord gets an unsecured claim for damages, and the Code caps how large that claim can be.

Rent that comes due after the filing, while you are still using the space, is different again. That gets paid as a cost of running the case.

Who Gets Paid, and In What Order

The order is fixed, and it is not negotiable:

• Secured creditors, out of their own collateral
• Costs of running the bankruptcy case
• Priority claims, including recent wages and certain taxes
• General unsecured creditors
• Owners, last

Most small business estates run dry somewhere in the middle. That is normal, and it is why the order matters more than the totals.

The same structure applies at every size. The SEC’s overview of what happens to a company’s securities in bankruptcy walks through the same ranking, and explains why the people at the bottom of the list usually recover nothing.

Steps Worth Taking Before You File

A few things are worth doing before the petition goes in.

Run final payroll properly if there is money to run it with, and account for the withholding. Tell employees before they find out from a locked door. Gather the lease, any personal promise attached to it, and the last twelve months of rent records.

Pull a list of every payment made to insiders or family in the past year. A trustee will pull that list anyway. Better that you see it first.

The Part Owners Skip

Employees will ask about their last check, their benefits, and their unemployment claim on the same day.

Have an answer ready for each one. A filing that blindsides the people who worked for you generates the most complaints, and complaints draw attention from the trustee.

Here’s the part nobody tells you about a burglary charge. You don’t have to take anything. You can walk out of a building with empty hands and still get hit with a felony. The prosecutor doesn’t care whether you grabbed a TV. They care whether you went in planning to.

That trips up almost every first-time defendant I’ve heard about. They figure that because nothing’s missing, the case has to fall apart. It doesn’t. The whole question turns on what was in your head when you walked through the door.

What the State Actually Has to Prove

Three things, in most places. You went in without permission. The place you went in was a building or sometimes a vehicle. And when you crossed the threshold, you were planning to commit a crime inside.

Each of those gets fought over.

“Without permission” sounds clear, but it’s broader than people think. An unlocked door doesn’t mean you’re invited. Sticking around in a store after closing counts. So does going into a friend’s house when they’ve told you not to.

The intent piece is the one that decides most cases. If you walked in with no plan, then changed your mind once you were inside, that’s a different charge. Probably theft. Not burglary. Prosecutors know this and try to build the intent argument from whatever they can find: tools in your pocket, what time of night it was, what you said when the cops showed up.

A Look at the Numbers

The FBI runs the Crime Data Explorer, which pulls in reports from 16,000-plus law enforcement agencies. In 2024, burglaries dropped about 8.6 percent compared to the year before. The national rate sat at 229.2 incidents per 100,000 people, which is roughly the lowest it’s been in decades.

That’s not a sign that burglary charges are easier to beat. Just the opposite. With fewer cases being charged overall, the ones that do get filed tend to be the ones prosecutors think they can win. If you’re facing one today, you’re probably facing strong evidence.

What Tips the Case

A few things move burglary cases hard in one direction or the other.

• Video. If there’s clean footage with a clear face, the defense gets a lot tougher.
• What you said. Statements at the scene are the single biggest source of evidence against most defendants. Anything you said to the cops is going to come up later.
• What was on you. A crowbar in the trunk, gloves in your pocket, somebody else’s stuff in a backpack. All of that supports the intent argument.
• Your record. A clean prior history changes plea negotiations more than people realize.

None of these are unwinnable. Video can be challenged. Statements can sometimes be thrown out if the cops didn’t Mirandize you right. Carrying tools isn’t the same as carrying burglary tools. But you need somebody who knows how to push back early.

Why Local Counsel Actually Matters

Burglary charges run from a fourth-degree misdemeanor with a couple of years on the high end, all the way to a first-degree felony that can put you away for twenty. The gap between those outcomes isn’t mostly about the facts. It’s about how the case gets handled. Which motions get filed. Which plea offers get pushed back on. Which judge happens to be on the docket that morning.

A lawyer who’s been in the same courthouses for decades reads those rooms differently than somebody parachuting in. the Castro Law Group has worked southern Maryland courts since 1993, handling burglary defense across Charles, Calvert, St. Mary’s, and Prince George’s counties. That kind of local familiarity isn’t something you can fake.

Bottom Line

Burglary law isn’t simple, and the part that decides most cases, what you were thinking the moment you stepped inside, is the part juries get to interpret. If a charge like this is on the table, getting a lawyer involved early is what separates a case built around your story from a case built entirely around the prosecutor’s.