Best Bankruptcy Lawyers in Warren, MI

Can I Discharge Business Debt in My Personal Bankruptcy? By Walter Metzen Business debt is dischargeable in a personal bankruptcy in Michigan under certain circumstances. However, it is important, firstly, to keep in mind that there is a difference between the debt owed by your business and the debt owed by you, personally. It may be that you are the sole owner of your business or that you operate a Michigan sole member LLC—but, if you do conduct business through a corporate entity or LLC, that debt may or may not be owed by you, personally. It may be owed by the LLC or corporation only. In that case, the debt will not be dischargeable in your Michigan Chapter 7 or Chapter 13 personal bankruptcy. Business Debt vs. Personal Debt: Understanding the Difference If you are self-employed or operate your business as a Michigan sole proprietorship or general partnership, your business’ debts are your own, personally guaranteed debts. If the business doesn’t pay its debts, you owe the money. Likewise, if you file a Michigan Chapter 7 or Chapter 13 personal bankruptcy case, the debts of your sole proprietorship or partnership not only can be included and discharged—they must be. In a bankruptcy proceeding, you have no option to exclude or “leave out” debts that you owe, contrary to popular belief. Anyone that you owe money to must be listed in your bankruptcy petition schedules. Anyone listed will receive a notice of the bankruptcy.