It is not unheard of for the owner of a small business to file personal bankruptcy, but they are often concerned about the impact. Bankruptcy is a scary and emotional time. However, things can become extremely stressful at the thought of losing your business. Therefore, this article answers the question, “Can a personal bankruptcy affect your business?”
It is possible to keep a business going and file a personal bankruptcy. This is not uncommon, but there are some things you must know. Of course, not all of these will not match every circumstance. Still, it is important to be aware of them. The one caveat here is that it is impossible to address your personal situation in this or any online article. This article is for information purposes only, and you will need to seek the advice of an attorney to address your own personal situation. Nonetheless, here are some things to keep in mind.
- Disclosing Your Business – Your business is an asset and you have no choice but to include it in your bankruptcy paperwork. This is true even is the business has limited or no value to anyone but you. The trustee handling your bankruptcy must make a determination.
- Business Value – There are many small businesses that hold no inventory and own no valuable assets. Regardless, you may own some machines or equipment that are paid-in-full and have some worth. It is important to assign a value to these items before filing.
- Aggressive Creditors – Many times, creditors are only interested in your personal assets. Yet, there are some aggressive creditors who want to go after your business assets, like a company owned work truck. Whatever you do, do not try to, in any way, hinder their claim. That behavior can be labeled fraudulent.
- Banking – In certain situations, if you use the same bank for both your personal and business finances, the bank can seize the fund from any accounts to pay credit card debt.
What haven’t we covered yet that is important to you? If you would like to talk about if a personal bankruptcy can affect your business, or need more information, please contact us.