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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Is your personal credit affected if you declare bankruptcy

Customer Question

Is your personal credit affected if you declare bankruptcy on your small business. I took out a business line of credit for $50,000 which I am struggling to pay back and I do not have the business any longer?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 4 years ago.
Hi JACustomer,
1) What is the form of the business (eg. corporation, sole proprietorship, etc.)?
2) Does the business have any assets that can be sold?
3) Are you sign a personal guarantee for this debt?
Customer: replied 4 years ago.

1.) I first open it up as a corporation but didn't pay the necessary fees to keep the corporation open.


2.) No, there are no assets


3.) I am not sure if I gave a personal guarantee or not. I just checked my credit report and it is not showing up on the report which at this point I am not sure if that matters or not.


The business was closed over 3 years ago but Ive been paying the minimum monthly payments. I have been a HORRIBLE records keeper

Expert:  cfortunato replied 4 years ago.

If you have not personally-guaranteed this loan, then if you file a business Bankruptcy, that will not affect your personal credit report or your personal credit score.

Additionally, if you did not personally-guarantee this loan, and if your business has no assets, there is nothing the lender can do to you if you stop paying - whether or not you file a Bankruptcy.

However, if the business has no assets, and if the business is already closed, there would be no benefit to filing a business Bankruptcy.

You should be able to find out from the lender whether or not you personally guaranteed the loan.


I think this is what you wanted to know. If not, please let me know.
Thank you.


cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 4 years ago.

According to the lender, I did personally guarantee this loan. I am asking for the original application to verify my account. If I need to file bankruptcy, how long does that stay on my credit report?

Expert:  cfortunato replied 4 years ago.
A Bankruptcy stays on your credit report for 10 years after you file.