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Can I separate my new business from my personal bankruptcy?I've got to incur debt to make my business operate .

I am trying to get a new business off the ground while in the middle of a chapter 7 bankruptcy. My new business needs loans for upfront purchases of materials and equipment, but the law says I cannot incur any new debt. In the meantime my family is going hungry, I cant make the money to keep up my obligations for my exempted properties, and my family will end up homeless. What are my options? Is there anything I can do to separate my business from my personal bankruptcy?

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Attorney answers (2)

Reputation Level 20
If the business is incorporated and it incurs the debt and not you personally, then perhaps you may be OK. However, you must talk with your bankrupcty attorney before doing anything, since creditor laws vary from state to state and the bankruptcy court may not even although this transaction even it technically is OK.

Hope this helps.

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Reputation Level 14
You should tread carefully as it is a common misconception that the limited liability protection of an entity goes both ways. Your membership stake in the LLC is technically a personal asset that can get mixed up in your bankruptcy if you are not careful and you should consult with a local bankruptcy attorney beforehand.

I hope this helps.

Disclaimer: This answer is for informational purposes only and does not constitute general or specific legal advice, nor create an attorney client relationship.

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