When small businesses file for bankruptcy, their owners’ personal assets are typically protected from creditors. The filing typically freezes or erases creditors’ claims on the business’s assets.
However, if the owner is liable for the businesses debts, then the owner’s personal assets may be used to pay off certain obligations. When this occurs, the owner may also be driven into personal bankruptcy. While this unfortunate result is rare, it can often be damaging to an individual’s finances.
If you have questions about your small business bankruptcy filing, contact the Birmingham bankruptcy attorneys of Paula Greenway at (205) 324-4000.