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Can business bankruptcy affect personal assets?

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M

MitchVicknair

Guest
The answer depends largely on the structure of your business. If you did not form a specific business entity and you are the only owner of the business, you are probably a sole proprietor. A sole proprietorship is not a separate legal entity -- which means you are personally responsible for all business debts and when you file for bankruptcy, you are really filing a personal bankruptcy.
 

latigo

Senior Member
What is the name of your state (only U.S. law)? Colorado
Notwithstanding the fact that the business is structured as a "separate legal entity" - such as a corporation or a limited liability company - and even in the absence of personal guarantee(s) - there are circumstances whereby the non-exempt personal assets of the individual principals can be seized by business creditors and/or a trustee in bankruptcy to satisfy "business" debts.

The circumstances I'm referring to are when the business is conducted in name only and in reality functions as the alter ego of the individual principal(s).

You need to spend some money with your attorney.
 

JosephPrice

Junior Member
It depends upon the type of your business and also in that you are doing your business solo or in partnership. If you are doing solo, then according to low you are totally responsible for your business you business is you. If in case to discharge your business debt, then you would have to file a personal bankruptcy. And it can affect your credit up to 10 years. If you are doing business in partnership and you are a general partner, but if your credit debt is not paid by liquidation then all the partners are responsible for unpaid debt. In few cases LLC, corporation, or limited partnership bankruptcy can affect your personal credit.
 

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