Discharging Business Debts Through a Personal Bankruptcy
Running a business can be a challenging job.
A lot of business owners struggle to make ends meet, and this often only gets harder and harder as time goes by.
Mounting debts, expensive business fees, and all of the other costs that come with your venture can end up being very difficult to manage.
This leaves a lot of people considering bankruptcy for their business, but it can be hard to figure out whether or not personal bankruptcy will be able to help you out.
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Self-Employed/Sole Proprietor vs. Corporations
Before diving into the way that your debt will be handled, it’s worth thinking about the type of business you run.
If you work as on a self-employed basis or as a sole proprietor, you will be personally liable for any debt that your business takes on.
This means that any loans or credit you take out will be covered by bankruptcy.
Those who run a corporation will face a different picture.
Businesses like this operate as their own entity, and this means that they are responsible for their own debt, rather than the owners.
It will be harder to have your business debts covered by personal bankruptcy if you’ve been operating like this.
Which Business Debts Are Covered By Bankruptcy?
As mentioned above, the way that bankruptcy impacts your debt will depend on the type of business you’re running.
Unsecured loans like credit cards and overdrafts will usually be covered by your bankruptcy, and this means that you won’t have to keep dealing with the creditors behind them once you’ve made your filing.
Alongside this, income tax and other tax debts can also be discharged by bankruptcy, but you will have to take action quickly to avoid issues like wage garnishments.
Secured loans that are tied to assets won’t be covered by your bankruptcy.
This means that you could end up having to forfeit assets that would usually be protected by bankruptcy if you have loans like this.
Likewise, landlords also have more power than regular creditors, and it’s crucial that you let them know what’s happening to ensure that they don’t take action against you.
Getting Help From Bankruptcy Canada
Here at Bankruptcy Canada, we understand that your business finances are complicated.
It can be extremely difficult to stay on top of this side of your work, and many companies find themselves falling into the trap of letting it go unmanaged.
Our expert team can provide a range of different services to help you get out of this predicament.
- Financial Advice: We pride ourselves on providing accurate, confidential, and obligation-free financial advice to our clients, no matter their circumstances.
- Consumer Proposals: A consumer proposal gives you the chance to renegotiate the terms of your debt, and Bankruptcy Canada can guide you through this process to ensure success.
- Filing For Bankruptcy: Filing for bankruptcy can be a daunting and confusing process, but Bankruptcy Canada can guide you through each of the steps along the way.
We encourage anyone who is worried about the state of their business or personal finances to get in touch with our dedicated team.
You can email us at Gordon@BankruptcyCanada.com or give us a call on 1-877-879-4770, and we’ll get straight to work on your money.
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Bankruptcy FAQs
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How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?
