Jones & Walden, LLC - Bankruptcy

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You are planning to declare bankruptcy. Perhaps you got in over your head in personal credit card debt. Maybe you have a lot of medical bills that you just cannot pay off. Maybe both. Whatever the reason, you know that bankruptcy is the best way to straighten out your personal finances.

However, you also run a small business. You do not want to lose it. Do you have to list it during this bankruptcy filing, even though it is not a business bankruptcy?

You do. The business is still an asset. Do not leave it out, hoping you can hide it or that no one will ask. You are obligated to list all of your assets, and that includes your business.

Does this mean you will lose that business? Much of the time, it does not. Even if you have to liquidate some personal assets, you may not have to get rid of business assets.

Plus, the type of business you run determines if it actually has any value to someone else. Without physical inventory, it usually does not.

For instance, maybe you run a computer repair company. You have some tools, but they may be protected as tools of the trade. You do not really have inventory. The business is valuable only because you are considered an expert in your field. It’s only valuable to you. The business should stay intact while you figure out your personal bankruptcy.

Of course, it is important to note that every situation is unique, so generic answers do not always work here. Make sure you look into all of your legal options and fully understand what steps to take.