justakidd2 Posted January 2, 2008 Report Share Posted January 2, 2008 I am curious about how declaring bankruptcy would effect a sole proprietorship? It is a small business that does not earn a substantial amount of money each year - person has no assets, still owes money on a 1995 truck. Several accounts already in collections. One account with a personal loan (collateral no longer in home). Link to comment Share on other sites More sharing options...
willingtocope Posted January 2, 2008 Report Share Posted January 2, 2008 If the company is a sole prop, and not incorporated in any way, then basically you and the business are the same "person". You can't BK the "company", but, if you do a personal BK 7, the company's debts (which are really your debts) are also extinquished. And, the company is out of business.(Note that because this credit is "business" related, the FDCPA does not apply, so, effectively, any collection efforts can be pretty nasty). Link to comment Share on other sites More sharing options...
Methuss Posted January 2, 2008 Report Share Posted January 2, 2008 And, the company is out of business. Not so. The business does not technically go away. The trustee doesn't force you to shut it down. If all the business assets are exempt, it can continue to operate.But it may as well have been. Once the SP is reported to the business CRAs as a bad risk, you won't be getting any credit in its name. Your suppliers will all require up front payments and you can forget about getting 30-days net terms. Link to comment Share on other sites More sharing options...
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