What happens to you if your business files bankruptcy?

Whether or not your business bankruptcy will affect you personally depends on the type of bankruptcy you file.

If you file chapter 7, the shareholders of your corporation (including you) could lose your stock values if the stock shares are liquidated with the corporation assets.

If you choose to file chapter 13 bankruptcy, the shares of the corporation would not be liquidated since you’ll enter an agreement to repay your creditors over time, and will be able to keep your business open.

Unfortunately, chapter 13 bankruptcy may not be the best option for every corporation. If one or more of your business partners have personally guaranteed loans or leases, you may not be able to file chapter 13. In this case, the partner would have to file for personal bankruptcy separate from the corporation if the assets collected do not cover the guaranteed debt. Also, that partner could be held liable for any lawsuits filed against his personal assets.

Glenn A. Brown, Esq.

Attorney Glenn Brown and the Real World Law team provides legal protection to homeowners and businesses in eminent domain and condemnation actions, commercial and residential real estate closings, and other litigation matters. If you're a property owner in need of legal protection, contact our law firm. We've two convenient office locations, serving communities in and around Upper Darby, PA and Wilmington, DE.

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