Small business- bankruptcy or just close down?
admin | Apr 18, 2010 | Comments 2
I co-own a very small business. It is a partnership. We are currently in debt $17,000 from the items we refinanced to buy it, and $13,000 in debt on a credit card used to buy items for it. We are plotting to just close it down, but I am wondering if maybe we should declare bankruptcy on it. I do not know anything about declaring bankruptcy, which would be the better solution- closing or bankruptcy? Where do I go to find out information on declaring bankruptcy with a partnership? Will bankruptcy affect just the business or our personal loans and equity also?
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If you have loans that are tied into the business and you close and don’t pay them….creditors can sue you and make judgements against you attaching leins on any assets you own. Preeminent advice is to contact a local bk attorney that would handle both personal and business bankruptcies. Most will see you on a emancipated initially consultation. Question them what type of information you will need to bring with you for the business. They will want to see you income if you paid yourself, assets you have, taxes for the last 4 years and all of your debts. Anything tied into the business that was personal will fall on the other partner if you declare bankruptcy, but an attorney will be able to give you more detailed information. Excellent Luck!
If you had a corporation, you may have a chance with the bankruptcy, but speak to a specialist in that area. If you can avoid the bankruptcy it would be preeminent, since that stays on your record and can affect many areas of your life.