Will My Business Bankruptcy Affect Me Personally?

It’s never easy facing financial difficulties, especially when it means filing for bankruptcy for your business. Along with the stress and strain of the bankruptcy, you may be wondering if a Brooklyn bankruptcy could affect your personal finances as well. After all, you know that a corporation or S-corp can protect you in some legal ways — but what about when it comes to business bankruptcy in New York? The best way to proceed involves calling Ursulova Law Offices, your bankruptcy lawyers in Brooklyn, NY.

How Business Bankruptcy Affects You Personally

Whether a business bankruptcy affects your personal finances depends upon how you set up your business. If you happen to be a sole proprietor and run the business that way, or if you are in a business partnership with one or more other people. In these instances, the sole proprietor and partners are the business, so more of the financial responsibility relies on these parties.

If you have a corporation or S-corp, you might be in the clear personally, but there are exceptions: if you’re a director of the organization, you may still have personal financial effects resulting from your business bankruptcy NY.

Personal Assets and Property

Is your business set up as a partnership or sole proprietorship? If so, your personal assets and property could be sold to cover the debts of your business.

The business itself will cease to exist if it was a partnership; if you have a sole proprietorship, it may still go on after bankruptcy. Generally, any bankruptcy won’t usually affect your primary residence or any vehicle you depend on. If you have second homes and recreational vehicles, however, they could be affected.

Individual Credit Score

Your business bankruptcy will also affect your credit score just as a personal bankruptcy would, which means you’ll have a tough time improving your credit and getting approved for things personally for at least seven years.

Personal Finances, Loans, and More

Because your credit score could be impacted, a business bankruptcy NY could have major consequences if you wish to get a loan in the future for business or personal reasons. Affected loans can include car loans, mortgages, and even personal credit consolidation loans. If you have a spouse, your business bankruptcy might affect them as well (same for your business partner’s spouse).

Fortunately, you can take action immediately to soften the blow and set yourself up for improving your weakened credit score in the future. Ideally, you’ll want to figure out your finances for the next seven years and make moves before you declare business bankruptcy in NY if the business bankruptcy can affect your personal finances.

Bankruptcy Lawyers in Brooklyn NY

If you’re declaring business bankruptcy and worried about your own finances, the best time to contact a Brooklyn bankruptcy attorney is before you file. The second-best time is now. There are options you can take and preparations you can make prior to filing business bankruptcy to help protect your assets. Contact Ursulova Law Offices today to ensure your personal finances and credit score take minimal damage from your business bankruptcy filing. In the end, a compassionate and compliant bankruptcy lawyer will often save you time and money when it comes to legal filings and can provide experienced advice and counsel on how to prepare for business bankruptcy and minimize the negative impact on your personal finances.