topic Re: Does filing bankruptcy affect my business? in Bankruptcy

Does filing bankruptcy affect my business?

Anonymous — Mon, 16 Mar 2020 21:31:03 GMT

I have a business with my brothers. We buy properties and flip them. The business is an LLC but I have a lot of debt in my name due to a recent separation. I want to file bankruptcy but I don’t know if me filing bankruptcy will negatively affect my business. If I file bankruptcy will my business be able to buy properties without me on the loan? I’m okay with my brothers putting the properties in their name but because I am protected under the LLC, but will I be required to be on the loan?

Any input would be greatly appreciated. Thanks in advance!

Re: Does filing bankruptcy affect my business?

FireMedic1 — Mon, 16 Mar 2020 23:31:42 GMT

Welcome @Anonymous

Because a sole proprietorship's assets essentially belong to the business owner, the owner can file a personal bankruptcy case and keep his business. However, businesses such as partnerships, LLCs and corporations function as separate legal entities. They must file for Chapter 7 bankruptcy separate from their owners. This is really a lawyer type question. But here's a link that discusses it in more detail.

https://www.thebankruptcysite.org/resources/bankruptcy/will-you-have-close-your-business-if-you-file-

Re: Does filing bankruptcy affect my business?

smittyboy020 — Tue, 17 Mar 2020 06:39:32 GMT

I was recently discharged in a ch7, and I forgot to close by Wells Fargo Biz Secured card. Even though I didn't include it, the account was automatically closed. My biz credit took a big hit because it was personally guaranteed, and that card reports to Business Experian. Fortunately, the business was already closing.

Re: Does filing bankruptcy affect my business?

despritfreya — Tue, 17 Mar 2020 12:04:14 GMT

@Anonymous wrote:
I have a business with my brothers. . . The business is an LLC. . . I want to file bankruptcy but I don’t know if me filing bankruptcy will negatively affect my business. . . .

Your membership interest in the LLC is an asset of the bk estate when you file. Whether or not you get to keep your interest is the question. This question cannot be answered here as the answer turns on numerous factors, including but not limited to what chapter bk you file and the value of the membership interest. You need to consult with an attny.

Des.