What Business Debts Can I Dissolve With Bankruptcy?

: Reese Baker & Associates

  Filed under: Filing bankruptcy

business. bankruptcy, attorney, houston, texas, bankruptcy, chapter, TX, lawyer, college station, bryan, bankruptcy,After much debate and soul searching, you have decided that the only way to move forward in your failing business is to seek protection through bankruptcy. What debts have you incurred while trying to keep the business afloat are actually eligible for discharge through bankruptcy?

The long answers is that it depends. If you choose to file a Chapter 7 personal bankruptcy you can be protected from any personal liability once the assets are sold and the creditors all get a slice. Any remaining debt will be written off. The types of debt that are covered under a chapter 7 include any outstanding credit card bills, lawsuit judgments against you or the business, any medical bills that may have been incurred, as well as, any outstanding obligations from leases or contracts (if you were a sole proprietor) and any debts to suppliers or service providers like accountants or architects.

If you also have secured debts, they are handled a little differently than the unsecured debts mentioned above. The creditor may take back the collateral in order to satisfy the outstanding debt, even if you have filed for bankruptcy and if there is still an amount owed after they have sold the collateral, that becomes what is known as a deficiency and that cannot be discharged by bankruptcy.

As you can see, there are more questions than answers when dealing with a business or personal bankruptcy, the absolute best advice is to seek out a qualified bankruptcy attorney in Houston or trustee and find out exactly where you stand before proceeding.