Filing for Bankruptcy because of personal business?
admin | Apr 06, 2010 | Comments 2
My wife and I are thinking that we may have to file for bankruptcy because of the recession and that our business that we have, that has been in business for 12 yrs can no longer pay its bills.
We have had to place a lot of business expenses from utilities to vendor bills on our credit cards. We are now over $33,000 in debt over 6 cards.
What do we do now? Do we place the business up for sale? Rent out our section of the building and work from home? Have a fire sale in the store? And how do we go about claiming bankruptcy on our business credit cards without it affecting our personal cards, that have much lower balances. Can you even do that? Aver against certain things and not others. We own both our vehicles and we rent out household. Other than that, we don’t have a whole lot of assets. Anyone have some thoughts? Thankfulness to anyone that can answer these questions.
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Filed Under: Bankruptcy
Go to http://www.score.org/index.html and in the upper left hand corner, enter your zip code. On the next screen, you will find the SCORE the boards nearest you. Call them and orchestrate for a emancipated meeting with a SCORE counselor to discuss what options you have.
SCORE “Counselors to America’s Small Business” is a nonprofit association dedicated to educating entrepreneurs and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).
SCORE was founded in 1964 and is headquartered in Herndon, VA and Washington, DC and has 389 chapters throughout the United States and its territories, with 11,500 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors. SCORE is America’s head of state source of emancipated and confidential small business advice for entrepreneurs.
It sounds like your business is a d/b/a and not incorporated, so a bankruptcy filing will affect your personal finances and credit. You, therefore, cannot aver bankruptcy on only the “business” debt. That is the primary reasons many businesses are incorporated, to isolate company liability and assets and shield personal liability and assets.
Only you know why your business is failing and what the tangible assets of the business are. Answer your own questions:
1. If the business is failing naughtily, will anyone buy it?
2. If you got out from under the lease, assuming you can find a sub, would that make you out of the red?
3. Are the business assets unencumbered so they can be sold? If so, would the profits be enough to pay the business debts?
If answers to those questions are “no,” then try to settle your debts with your creditors. If you can’t do that, talk to a bankruptcy attorney.