Nashua, NH asked in Bankruptcy for New Hampshire

Q: If my business files for bankruptcy, does that affect any of my non-business/personal assets?

Related Topics:
1 Lawyer Answer
Robert O'Brien
Robert O'Brien
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Convenience, NH
  • Licensed in New Hampshire

A: Greetings!

The short answer is no, with reservations. If the business is in fact a separate legal entity, filing for bankruptcy protection on behalf of that entity will affect you IF you have signed personal guarantees; if you are employed by or your living is sustained by the business. If your business is in chapter 7, your interest (shares, membership, equity) in the business entity would be part of the bankruptcy estate. If your business is in chapter 11, your interest would be under the control of the "debtor in possession", unless a trustee is appointed.

If your business is in chapter 11, and concurrently, you file a personal bankruptcy, the trustee appointed in your personal case would have the right to control the chapter 11 business case.

None of your personal assets would be directly at risk unless co-owned by the business filing for bankruptcy protection, or unless pledged as security for business debt. You could be sued on any personal guarantees made to the creditors of the business, and upon receiving judgment against you, your nonexempt assets would be at risk as the creditor attempts to collect on the judgment.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.