Josh: Okay, so if I’m a small business owner and personally I have good credit but my business is going under, how do I go about filing for bankruptcy?

Samira: It depends. The key issue there is whether you personally guaranteed some of the loans that have been granted to your business. If you did, then you’re personally liable for them, so you may have to do a chapter seven bankruptcy. As far as to a business bankruptcy, most small businesses don’t need to do a business bankruptcy. What they need to do is close the books, and close them officially maybe with an accountant and make sure they don’t have any troubles with the IRS. But the reality is is that some companies are in debt and need to negotiate their debt or renegotiate their debt. It’s all something that, again, depends on what is your financial circumstances, and those are unique.
Other people like to go to bankruptcy and they file a chapter seven and they want to keep their business. Is that possible? Yes. It depends on the type of business. If you’re a large store with lots of merchandise than the inventory is considered an asset and that may not be a good choice for you to do a chapter seven. Not everybody qualifies for a chapter seven. Some businesses are just not good businesses to go through a chapter seven with. Other businesses, for example, an electrician who has a toolbox basically and buys the materials for the repairs, and he’s a small business electrician that comes to your house regularly, not a big contractor or anything like that, and that person is able to do a chapter seven and keep his business.