Bankruptcy Law

Posted by admin on April 11, 2009 under Financial | Be the First to Comment

Business owners who can no longer afford to pay back their creditors will often look to file for bankruptcy protection as a way to settle their debt and avoid costly legal action. When you file for bankruptcy, your creditors may be prevented from collecting on debts until the process is completed.

How much creditors can collect depends on how your business is structured.

If your business is a sole proprietorship, your personal assets may be used to pay off business debts, depending on which form of bankruptcy is chosen. Corporations, limited liability companies, and some forms of partnerships protect personal assets from being used to pay off business debts. Not all bankruptcies are voluntary. Creditors can also petition for a business to declare bankruptcy.
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