At the Miami Bankruptcy Law Firm of Alberto Hernandez, we are well known for our work with consumer debt. However, in recent years, it has become more common for individuals to go into business for themselves. A popular concern is seen during the free bankruptcy consultation offered to first time prospective clients is regarding their business. They want to know if they will be able to keep it. if they will lose everything they have worked for and if they will be liable for debts associated with the business.
To start, you should know that there is a possibility that you may keep your business after filing for bankruptcy. A business is considered a personal asset and must always be disclosed in your bankruptcy filings. This includes business closed within the past 6 years. A trustee is interested in the value of your business and will look at assets and debts to determine an amount. For most small business, there may be little to no value because the individual person is essentially the business and you are hired based on your experience and knowledge. Without you, there is no business and therefore, a business may continue as usual.
For individuals with LLCs and Corporations with multiple partners, the process may be a little different. As stated before, your assets and debts play a role in the business value and it is important to disclose all of this information to your attorney to get an accurate idea of what to expect during the bankruptcy process. This does not necessarily mean that it will be impossible to file for a personal bankruptcy and should never discourage an individual from researching and reviewing their options.
It is important to review your business debt and see if there is any debt for which you were a personal guarantee. A personal guarantee is essentially a promise that you will be personally responsible for any business debt. In these cases, even if the business closes, you will still be responsible to pay back whatever is owed and a creditor can pursue this debt just like any other personal debt you may have. The good news is that in both a personal Chapter 7 and Chapter 13 bankruptcy, you may be able to eliminate your personal liability to most, if not all, of these debts.
For a free bankruptcy consultation at one of our offices conveniently located in Miami Dade and Broward County please call 305-820-0334
to discuss your options.