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?

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1 Lawyer Answer
Robert O'Brien
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  • 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.

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