Business vs Personal Bankruptcy
At Sasser Law Firm, a lot of our meetings begin with a potential client saying something along the lines of “My business needs to file bankruptcy!”
And while that may be true, it’s not necessarily true.
In fact, often it’s not your business that needs to file bankruptcy, it’s you. When I tell that to clients, I sometimes get a response along the lines of, “Mr. Sasser, I can pay my bills; I am making my car payment, I’m making my mortgage payment. It’s my company that can’t pay its bills. It’s the company that has to file bankruptcy.”
To that, I say, well, maybe, maybe not. If your goal is simply to shut down your business and move on with your life, oftentimes (particularly when your business doesn’t have a lot of tangible assets) you can just let the business die a natural death: file articles of disillusion with the Secretary of State, talk to your CPA about whatever tax steps need to happen and shut down the business quietly. No business bankruptcy is needed.
A personal bankruptcy becomes necessary when, after the dust settles from the business closure, you discover that you have co-signed on certain business obligations. These personal guarantees may have been quiet all along. The creditor has been happy to receive money from your business.
But the moment your business shuts down, the moment they stop getting a check from the business, what are they going to do? They’re going to pivot to you. This is why you may need to consider bankruptcy yourself.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.