Walker & Walker Law Offices, PLLC Logo
Call Or Text Us Today: 612-824-4357
VIDEOS Free Book Free Case evaluation
Menu
Call / Text
Walker & Walker Law Offices, PLLC
Free Book Free Case evaluation VIDEOS
612-824-4357
  • Home+Expand
  • Attorneys+Expand
    • Curtis K. Walker+Expand
    • Andrew C. Walker+Expand
    • Ethan Mustonen+Expand
    • Rick P. Lee+Expand
    • Andrew T. Johnson+Expand
    • Christopher Anderson+Expand
    • Jackson Wiese+Expand
    • Peter Lawin+Expand
  • Chapter 7+Expand
    • 8 Steps to Filing Bankruptcy+Expand
    • Qualifying for Chapter 7 Bankruptcy+Expand
    • Means Test+Expand
    • 341 Meeting+Expand
    • Advantages and Disadvantages+Expand
  • Chapter 13+Expand
    • 9 Steps to Filing Bankruptcy+Expand
    • Qualifying for Chapter 13+Expand
    • Means Test+Expand
    • 341 Meeting+Expand
    • Advantages and Disadvantages+Expand
    • Modification to Bankruptcy Plan+Expand
  • $0 Down Bankruptcy+Expand
  • Bankruptcy Learning Center+Expand
    • 50 FAQ+Expand
    • Bankruptcy Basics+Expand
    • Before Bankruptcy+Expand
    • After Bankruptcy+Expand
    • Benefits of Bankruptcy+Expand
    • Credit Report+Expand
    • Debt Collection+Expand
    • Legal Updates+Expand
    • Student Loans+Expand
    • Definitions+Expand
    • Debt Options Calculator+Expand
    • ARE MY STUDENT LOANS DISCHARGEABLE?+Expand
  • Testimonials+Expand
  • Blog+Expand
  • Make A Payment+Expand
  • Contact Us+Expand
    • Minneapolis Bankruptcy Attorneys Office+Expand
    • St Paul Bankrutptcy Attorneys Office+Expand
    • Blaine Bankruptcy Attorneys Office+Expand
    • Brooklyn Park Bankruptcy Attorneys Office+Expand
    • Rochester Bankruptcy Attorneys Office+Expand
    • Mankato Bankruptcy Attorneys Office+Expand
    • Duluth Bankruptcy Attorneys Office+Expand
    • Leave Us A Google Review+Expand

How Do You Know When to File Personal vs. Business Bankruptcy?

Twin Cities Bankruptcy Lawyers Fighting For You

People don’t like the idea of bankruptcy. It is something that many people fear having to claim, especially if they have a small business, own their own home, etc. Owning a small business and needing to file bankruptcy is a scary situation.

In reality, filing bankruptcy usually fixes the problems that come from a business that isn’t making money.  It allows you to either restructure the debts to make the business profitable, or to exit the business completely with much of your savings (and your sanity!) intact. Bankruptcy is a legal process created by Congress to help people get a financial fresh start.  It allows a new beginning when a business is not making money.

One of the main questions people want to be answered when they contact Walker & Walker Law Offices is whether they should file for personal or business bankruptcy.

How Do You Know When to File Personal Vs. Business Bankruptcy?

This is not a question that is easily answered. There are several variables involved with it and everyone has to decide for themselves when it may be time to file. For instance:

  • Are you in debt because of personal expenses or business expenses?
  • Is your personal debt causing your new business to suffer?
  • If you subtract start-up bills from the equation, is your business making at least some money for your future?

Your best option, before you make any final decisions is to speak with your lawyer. They will be able to help you decide whether personal or business bankruptcy is best for your situation. In many cases, it is better to file for personal as a way to protect your business.

How Personal Bankruptcy Protects You

When you file personal, you have the option to list your business as an asset and make it so that it is exempt from future collection attempts. This includes giving you the ability to keep:

  • Computers
  • Equipment
  • Websites
  • Farm Animals (if necessary for business or income)
  • Any Tools-of-Trade You Require to Run Your Business

These types of things are protected in bankruptcy. By filing a personal claim, you are saying you have nothing for bill collectors to take, and they will be forced to leave you alone regarding the debts you currently owe.

In short, by filing for personal bankruptcy, your business debts are erased, you owe nothing toward your debts, and your business is protected because you claimed it as exempt. You are free to rebuild using the income from your business and move forward with your life.

Why Business Bankruptcy Could be a Bad Choice

One of the biggest reasons you should avoid choosing to file a business bankruptcy is that most likely you signed a “personal guarantee” with the lending agent. This means if your business files bankruptcy, you are still going to be held accountable for the debts that you owe. They will expect you to pay 100% of the money if for some reason your business fails.

Failure to pay could mean that the creditors are able to levy your bank account or wages to try and satisfy the debt. This could put you further in the hole than when you opted to file bankruptcy.

When Business Bankruptcy May Be Best

If you started your business without signing a personal guarantee, then you are not responsible for the debt. Creditors would simply be unable to collect unless the business starts making money again.

The only time you may want to consider filing business bankruptcy is if the business itself is losing so much money that it is pushing you further into debt. By filing bankruptcy on it, admitting it is insolvent, you are giving up the business. When you do this, that business will no longer be yours to run.

Discuss Your Options with a Lawyer

The government protects small business owners and entrepreneurs. Bankruptcy protects you with an automatic stay.  To take advantage of it, if you are suffering through financial troubles, you have to understand which laws will protect you the most.

You can be free of all personal liability for the debts that you are owed, and still protect your financial future. In Minnesota, you do not ever have to feel that you have no options.

Walker & Walker Law Offices specializes in all types of personal or business bankruptcy claims. If you are ready to take control of your situation, contact us. We are here for you and never charge for first time consultations.


Related Posts

#WinWednesday: $150,000 in Debt Gone — Including $100K in Student Loans and $50K in Medical & Personal Debt#WinWednesday: How We Wiped Out $150,000 in Student Loans and Personal Debt Through Bankruptcy#WinWednesday: Minnesota Bankruptcy Attorney Discharges $190,000 in Debt — Including $165,000 in Student LoansBankruptcy vs. Debt Settlement: What’s the Better Choice for Your Financial Future?

Request A Free Consultation

Help Me Get A Fresh Start

  • By signing up via text, you agree to receive recurring automated messages at the phone number provided. Consent is not a condition of purchase. Reply STOP to unsubscribe. Message frequency varies. Msg & data rates may apply. Your privacy is our priority. Your information will not be shared.

  • Should be Empty:

By signing up via text, you agree to receive recurring automated messages at the phone number provided. Consent is not a condition of purchase. Reply STOP to unsubscribe. Message frequency varies. Msg & data rates may apply. Your privacy is our priority. Your information will not be shared.

Client Reviews

Walker Law Logo

Monday – Thursday: 8:00am – 5:30pm

Friday: 8:00am – 4:30pm

Hours vary by location

Evening Appointments Available

Minneapolis

4356 Nicollet Ave.
Minneapolis, MN 55409

612-824-4357 Get Directions

Brooklyn Park

7240 Brooklyn Boulevard Suite #210
Brooklyn Park, MN 55443

763-444-4357 Get Directions

St. Paul

1112 Rice Street,
St. Paul, MN 55117

651-731-4357 Get Directions

Blaine

607 County Rd. 10 NE Suite #204
Blaine, MN 55434

763-780-4357 Get Directions

Mankato

100 Warren St, Suite 300-119,
Mankato, MN 56001

507-497-9179 Get Directions

Rochester

4229 W Frontage Rd Ste 5B
Rochester, MN 55901

507-738-1100 Get Directions

Duluth

4202 E Superior St, Suite 102,
Duluth, MN 55804

218-979-4220 Get Directions

Walker & Walker Law Offices, PLLC, designated a debt relief agency by an Act of Congress and the President of the United States, has proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 40 years.

This website is for informational purposes only. The information contained should not be interpreted as legal advice. Only a local attorney with actual knowledge of your personal situation can give you legal advice. Viewing this site website does not create an attorney/client relationship.

Facebook Twitter Google

© 2025 by Walker & Walker Law Offices, PLLC. All rights reserved.

Minneapolis Web Design | Privacy Policy | Terms and Conditions | Locations | Back to Top