Are You Personally Liable for Business Debts?
Are You Personally Liable for Business Debts?
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When You Might Be Personally Liable for Corporate Debt
Common ways an owner of a corporation or an LLC might become personally liable for the business’s debts. If you are personally liable for some or all of your business debts, you will have to file a personal bankruptcy, rather than a business bankruptcy, to rid yourself of these debts.
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Is Your Spouse Liable for Your Business Debts?
Your spouse’s personal liability for your business debts could also affect your decision about filing for Chapter 7 personal bankruptcy. For instance, if your spouse is liable for your business debts and has assets or income to lose, it might make sense for both of you to file for personal bankruptcy.
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Will You Have to Close Your Business if You File for Personal Bankruptcy?
Just because you own a company business doesn’t mean that the Chapter 7 trustee will automatically close the business and inventory its assets. It will often depend on whether the trustee can sell any business property and whether you have liability insurance.
