Bankruptcy and your Business

Many individuals that own a business find that they run into financial difficulties with the business and may only have the recourse of going bankrupt. A lot of these companies are classified as a Limited Liability Company. Often a Limited Liability Company or LLC is made up with many different partners.

When it comes to going bankrupt, it is most important that you rely on a reliable bankruptcy attorney who is going to be able to take you through the process. You may be able to file for a Chapter 7 bankruptcy and when you do, the trustee is going to take over your case. The job of this professional is to liquidate all of the assets the company owns and use the money to repay the creditors. Exemptions are not available in business bankruptcy, so everything must be liquidated in order to satisfy the company’s debts.

Often what happens with a limited liability company, because the owners really don’t understand the laws, is they can end up being liable for the debts that the company owes. Many times the owners will co-sign or guarantee a business loan for the company and when they do they are also personally responsible for those loans. Additionally, business owners may also put up personal property as collateral for business loans up front, when the company is just getting started.

Even if you are a sole proprietor instead of an limited liability company, you don’t want to pursue bankruptcy on your own. Bankruptcy laws can be very complex so you need the professional assistance of a bankruptcy attorney experienced in business bankruptcy with this form of debt relief.