ARE BUSINESS CREDIT CARDS TREATED THE SAME AS REGULAR CREDIT CARDS IN A CHAPTER 7?

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ARE BUSINESS CREDIT CARDS TREATED THE SAME AS REGULAR CREDIT CARDS IN A CHAPTER 7?

MY NAME AND BUSINESS NAME ARE ON CARD WITH PERSONAL GUARANTY. THE BUSINESS NEVER TOOK OFF AND IS A SOLE PROPRIETOR AND WAS NEVER REGISTERED WITH NO EIN NUMBER OR ANY OUTSTANDING TAX PAYMENTS OR ANYTHING. CREDIT REPORT SAYS “INDIVIDUAL ACCOUNT” AS STATUS.

Asked on January 30, 2011 under Bankruptcy Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) If the business was a sole proprietorship, then from a legal point of view, there was no business--there was only you. A sole proprietorship is the proprietor; there is no legal distinction between business and owner. So business credit cards taken out by a sole proprietorship are cards taken out by the individual; they *are* your regular credit cards.

2) Even if the business had been a limited liability company (LLC) or corporation (Inc.), if you personally guaranteed any business credit cards, you'd be personally obligated on the debt, and therefore it would still be an obligation that would be taken cognizance of during a bankruptcy filing.

So either way, you can and should include the cards in your bankruptcy filing.


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