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Can I file bankruptcy of my business debt without affecting my personal credit

Lexington, KY |

My business failed 2 years ago and I have 1 biz credit card with a $9,000 balance - can I file bankruptcy on that without affecting my personal credit?

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Attorney answers 3


If your business was an incorporated entity, and if the credit card was issued to the business without your co-signing personally, it should be possible for the business to file a Chapter 7 Bankruptcy to discharge that debt. So long as you are not personally liable on the debt and not a Petitioner in the bankruptcy, the credit reporting agencies are not permitted to include it in your credit file.


These days, unfortunately, business credit cards are almost alwys personally guaranteed by the owner, and so it woulc affect your personal credit. You might want to try to settle with the credit card company. Sometimes, a phone call will make a big difference. Good luck.


This is going to depend on how the situation is handled in your circuit. In the 9th Circuit (where AZ is located), the judges may look at a business filing chapter 7 as an extension of the individual depending on how the business is formed. A sole proprietorship does not get the same protection that a corporation would and, in certain circumstances, even a corporation owned by one person can be interpreted to be one and the same.

You really need to discuss this issue with a local attorney to determine what you might be facing if you need to file bankruptcy for the business.