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Business and Personal Bankruptcy – Are both needed?

I own a business which is setup as a corporation. The business is not doing well and as such has caused me to personally accumulate a lot of debt. If I wanted to declare bankruptcy would I need to do it for both the business and myself or could I just do a personal bankruptcy and be ridden of the business that way? Since I own the business, wouldn`t it make sense that I just declared personal bankruptcy and lose the business that way rather than filing for both business and personal bankruptcy?

Posted from: Ontario

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One Response to “Business and Personal Bankruptcy – Are both needed?”

A licensed trustee said...

I have this argument with my competitors on a regular basis. In my opinion, most small business bankruptcies are NOT needed. Rather, only the owners need to file personal bankruptcy to deal with the debts they have guaranteed or are personally responsible for.

Before you decide to file bankruptcy for a business you should ask your trustee straight out whether or not you will end up having to file for personal bankruptcy too. If you will then why spend the money (usually at least $10,000) to bankrupt the business.