Can I risk losing my personal property as in my home and bank assets on filing a bankruptcy for my LLC?

Question: If I file bankruptcy on my LLC, do I risk losing my house and personal property?

Response: This depends on whether you personally guaranteed any of the debts that you took on for your business. Usually, if your business is incorporated as an LLC, you can only lose what you invest in the business. However, when a business does not have enough history or credit, the principal needs to personally guaranty the loans taken out by the business.

If you personally guaranty a loan for the business, and the business defaults on the loan, the creditor can come after you personally to collect. If you file bankruptcy on the business, it would not erase your personal liability to the business. Thus, most people who want to file bankruptcy on their small business, file a personal bankruptcy, and if their business has no assets, it simply dissolves.

Answered by Marina Ricci

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