If someone files a personal bankruptcy can their creditors go after business assets?
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If someone files a personal bankruptcy can their creditors go after business assets?
I am half owner of a business and I need to file bankruptcy. Can the credit card company put a lien against the business or tap into the business account?
Asked on August 27, 2010 under Bankruptcy Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
How is the business structured? You say you are a half owner. If it is a partnership and you are one of two partners, then probably yes, personal creditors can generally go after business assets (your share of them, anyway), as there is no separation between you and the business. Indeed, the business's assets should be included in any bankruptcy filing, since again, they are your assets, at least in part.
If the business is an LLC or a corporation, then the business's own assets would be protected from personal creditors. Your ownership interest (your "stock" or "equity") is a personal asset that would be considered in certain kinds of businesses, but while that could affect your ownership, the business's actual accounts, assets, equipment, etc. should be proteced.
Before doing anything, consult with a bankruptcy attorney to see what is the best option for you.
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