If you are filing for personal bankruptcy, you’ll have to come up with a valuation of the business and those assets will have to be exempted. In a situation where the business is incorporated, if the debts of the business exceed the assets, there is nothing to exempt. If the business is held as a sole proprietorship, all of the debts associated with the business will be discharged, so it’s necessary to exempt all the assets. If the assets exceed your exemptions, you may consider filing for a Chapter 13. The other alternative is to negotiate a deal with the Chapter 7 trustee where you make payment(s) to the trustee in exchange for keeping all of the business assets.

Posted in: Business Bankruptcy FAQ