Discharging Debt and Business Bankruptcies

You may have heard about certain types of bankruptcy that let you discharge your debts. This is true for individuals, but for businesses, it is rare.

If you file your business as a corporation you will not be given a discharge, but if you are labeled as a sole proprietorship, you may qualify. Should you decide to file a business bankruptcy, you must be aware that not only is it not easy, but all of your debts will not qualify for a discharge. When you first file for bankruptcy, no matter what type it is, you will have to reveal all of your debts that are related to your business. It might be difficult to separate your personal from business debts and assets, making it important to enlist a bankruptcy attorney at the beginning of the process.

Any assets that are filed under your sole proprietorship bankruptcy, including property, will become part of the bankruptcy estate. When you file for bankruptcy, you agree to let your assets be used to pay off your debts, unless they have been claimed as exempt or discarded by your bankruptcy trustee. If you do not want to sell off your assets to pay off debts, you could try filing for Chapter 13 bankruptcy instead. In this case, you will then be asked to make a repayment plan to show the court how you intend to pay off debts, while keeping your property, over a longer period of time.

Contact us to discuss your business bankruptcy with a Chicago bankruptcy attorney who can offer insight and assistance.