Your Personal Liability for Business Debts
If you are deciding whether to file bankruptcy for your small business, the first question you must answer is this: Are you personally liable for your small business' debts?
Personal liability means that creditors can go after your personal assets (your income from another job, your home, or other property) if your business does not pay its bills. If you are not personally liable for business debts, then your personal assets are safe from creditors -- your creditors can only go after business income and assets. If you are personally liable for business debts, you'll have to file a personal bankruptcy in order to get rid of the debts.