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Does Personal Bankruptcy of a Self-employed Person affects his Partners?

Does Personal Bankruptcy of a Self-employed Person affects his Partners?
I have a parnter that is in financial distress and is concidering bankruptcy. Being a small self-employed business if he files for personal bankruptcy will this affect me in anyway?
Thanks in advance,

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One Response to “Does Personal Bankruptcy of a Self-employed Person affects his Partners?”

A licensed trustee said...

Whether or not it will affect you depends on the legal and financial structure of your business relationship.

If it is possible, I suggest you contact your legal counsel and your accountant before your partner files bankruptcy. If the business relationship requires any kind of restructuring it will be better to do it pro-actively (before they file) than after the fact. Once your partner files bankruptcy, their ownership in the business will vest in their trustee and most trustees are not interested in continuing to operate any kind of business (for obvious liability issues).

Some consultation and planning at this point might save you a great deal of grief later.