Many attempt to alleviate the weight of the debt by selling company owned equipment and using the proceeds to pay down their balances. If doing so doesn’t alleviate the debt, business owners will have a new decision to make: should they file for bankruptcy or try to cover the deficit with personal funds?
When attempting to decide whether or not to file for bankruptcy, the answer is almost always the same. Only file for bankruptcy if it is absolutely necessary. In the best-case scenario, you will be able to figure out a way to close the company and cover the company debt without the bankruptcy filing. Some look at bankruptcy at this point and see it as a smooth sailing version of shutting down the business. Anyone who has filed for bankruptcy or who is experienced in the industry will advise you, this is not an accurate description of the …show more content…
Check with each creditor; pull your original contractual agreements, etc. In some cases, creditors extend loans to your LLC or Incorporation, but in others they actually extended the credit to you personally. This is an extremely important distinction to determine. If you did NOT personally guarantee the debt, the creditor cannot legally go after you personally for the debt. They’ll only have the right to go after the business. If the business operations cease, the lender cannot collect from you personally simply as a backup. You were not listed as a guarantee of the