Filing for a personal Chapter 7 bankruptcy doesn’t eliminate the debts your business owes as a separate entity. But it can wipe out your liability for any business debts you are on the hook for personally. Read on to learn more about what happens to business debts in Chapter 7 bankruptcy.
You may have to shut your business down if you file for Chapter 7 personal bankruptcy. However, if you own an LLC or corporation with others, you may be able to keep your doors open, even if you are personally liable for a significant portion of its debt.
A partnership is allowed to file for Chapter 7 bankruptcy. However, depending on the type of partnership and the value of the partnership assets, filing for Chapter 7 may not be a good solution for the partners. In fact, there are several big reasons why Chapter 7 is often not helpful to partnerships.