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We need to close LLC with debt to our vendors. Do I file bankruptcy with my husband?

Rialto, CA |

I have LLC with my friend and owe $80000 to our vendors. We have no money to payback. My friend is in chapter 13 and she wants to file another bankruptcy for business. Is it possible? What chapter is it? I don't have much personal debt but I have a few credit cards together with my husband. He has steady income. Is it better to take him out of joint credit card holder and file bankruptcy as individual/business or should I file with my husband? I have income from temporary job but only for a few month. And I read an article said that an LLC cannot receive a discharge in a Chapter 7 case-what is that mean?

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Attorney answers 4

Best Answer

You have asked more questions than the space allows me to answer.

Whether you should file bankruptcy with your spouse depends on whether he has debts he is liable for that would make including him in your bankruptcy worthwhile or not. Taking his name off of a credit card now will not remove him from liability that occurred in the past.

What Chapter bankruptcy you should file depends on how the numbers in your budget play out. If you have money left over after paying your essential living expenses, say $150 or more, you probably would have to file a Chapter 13. If less than $150 is left, then Chapter 7.

Your situation is sufficiently complex that you should be meeting with the best bankruptcy attorney in your community. You will never regret paying a few extra bucks to get the best legal advice.

Hope this perspective helps!

Filemon Kevin Samson

Filemon Kevin Samson


You should meet with an experienced bankruptcy attorney who is also familiar with business and corporate matters to best advise you as the future of your business, whether a Chapter 11 plan will meet your continuing business operation needs, or whether it is even viable to continue operating.


You have a very complicated situation. Unfortunately, it is probably not possible for you to get a worthwhile answer in this forum.

You should consult with a local bankruptcy lawyer experienced in business issues to get specific advice for your particular situation.

Please note that, while I am a lawyer, I am not your lawyer. This information is for general educational and informational purposes only, and is not legal advice. You should review your particular situation with a qualified lawyer of your choosing.


A business entity cannot file for Chapter 13. It can only file for Chapter 7 or 11. Unless the business really wants to reorganize, it should file for Chapter 7.

It is imperative that you consult with a bankruptcy attorney regarding your debts, liabilities and income. Not everyone qualifies for bankruptcy. and moreover, it might not be absolutely necessary.

A discharge will not be entered in a Chapter 7 case if the debtor is not an individual (i.e. the debtor is a business). In Chapter 11 cases, if the debtor is not an individual (such as an LLC), the debtor must be entitled to a discharge, and if so, a discharge order may be entered once the Chapter 11 Plan of Reorganization is confirmed.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.


Counselor Chen offers sound advice as to the applicable Chapter of BK your entity would file for.

It sounds as though a Ch. 7 BK proceeding would be in order for the entity. Another problem may be if you have personal liability for the debts of the business. If that is the case then a BK at the personal level may also be necessary.

If you need a consultation I have an office in Ontario and Riverside.

BW 877-497-0627