How does Personal Bankruptcy Affect a Business?

Filing personal bankruptcy does affect your business. If you decide to file a personal bankruptcy and you own a small business incorporated as a limited liability company, your business assets will be affected.

How filing personal bankruptcy affects a business

If you have both personal assets and business assets, you need to decide if to file personal bankruptcy or business bankruptcy. If you file for a personal bankruptcy, you (and your spouse) will have to declare your business assets as:

Nonexempt property

If you, however, decide to file business bankruptcy instead of personal bankruptcy, then you must follow all the procedure for filing business bankruptcy. You must have all the business documents such as minutes of the business and stock certificates and registrations.

Can I file Chapter 13 bankruptcy? How does personal Chapter 13 bankruptcy affect my business?

You cannot file a Chapter 13 bankruptcy as a business, even if you have a sole proprietary business. If you are filing for a Chapter 13 bankruptcy, you must file for a personal bankruptcy. You cannot file the Chapter 13 bankruptcy in the name of your business. However, you can include the business related debts in your Chapter 13 bankruptcy filing that you are personally liable for.