Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question.
Was the business incorporated or not?
I believe so- I am meeting with the debtor tomorrow- but he had a grocery store, and individually signed as well. The store is closed-
Ok. Thanks for the response.
The following is based on the assumption that the business is incorporated, an LLC or some other type of business entity:
An individual CAN include a business debt IF he/she executed a personal guaranty to the creditor for the debt/loan/line of credit, etc. In this case, the individual's personal responsibility for the debt could be discharged through an individual chapter 7.
HOWEVER, if the individual debtor DID NOT sign a personal guaranty, then the individual is not liable for the business debt and CANNOT include the business in his/her individual bankruptcy.
Instead, the incorporated business would have to file a separate bankruptcy in order to be relieved of the debts.
I hope this answers your questions, but if you have others, please REPLY and I'll be glad to respond. Thanks.