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If I file for small business bankruptcy can I discharge the business loan and lease

Asked over 3 years ago - Utah

I own a small business and have 2 more years on lease as of november, I am 2 months behind on rent because of the economy. I am flat broke in the bank and store is out of product. Can I claim bankruptcy for the loan amount and business lease. as a small business owner.

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Attorney answers (2)

Peter Francis Geraci

Reputation Level 10

Answered over 3 years ago. Bankruptcy Attorney in Chicago, IL.

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Generally, if you are a sole proprietor and the debts and lease are in your name, you may qualify for individual bankruptcy, either Chapter 7 or 13. You appear to be unemployed, so Chapter 13 is out, because you need regular income in excess of living expenses to formulate a repayment plan. You may want to consult and attorney to eliminate these debts under Chapter 7.

However, if you formed a corporation, and did not sign any papers personally, you may have no personal liability. This is rare, but if you have no personal liability, the corporation just files final papers and dissolves. Corporations do not generally file for Chapter 7 if there are no assets to liquidate, since only persons, not corporations, can receive a discharge of debt.

This answer is based on general principles, does not create and attorney client relationship, and you should obtain advice about your specific situation from a local attorney.

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Lesley Abigail Hoenig

Reputation Level 14

Answered over 3 years ago. Bankruptcy Attorney in Mount Pleasant, MI.

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If you are asking whether you can have personal liability discharged, yes you can, but I think you need to consult an attorney that deals with business bankruptcies to figure out what the best thing to do is.

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