Do I need a business bankruptcy or a personal bankruptcy?

Question: I have a business and it's losing money and I need to file bankruptcy. The business just isn't making money. It never really has made money and I've been doing it for over 2 years. The business has locations in Alpharetta and in Forsyth County.

I put a lot of the business debt on my credit cards, and every month when I needed to pay bills I'd use a credit card. So now my credit card debt is super high and I owe over $85,000 on the cards. I got a couple of loans for the business and I know that I can't pay them back.

I tried borrowing some more money from a bank to try and use those funds to keep open the business, but no bank would loan me the money when I provide the documents they asked for. They could see that I wasn't making money with the business. I even tried to borrow from some of my relatives, but my mom, cousin and sister said no. And I couldn't get any investors interested in it, although a college roommate said he'd think about it.

I know that I need to file bankruptcy to get out of all this debt and I plan on getting a job. What should I do about the debt that I personally guaranteed and what should I do about my business debts? I am going to have to file a business bankruptcy? Or can I just file a personal bankruptcy?

J.S. in Woodstock, GA

Answer: By filing personal bankruptcy, either a Chapter 7 or a Chapter 13, any debts that you have a personal guarantee on through the business will be included. This means that any of those business creditors would only be able pursue the business assets and not come after you personally after your case is filed.

If there are no assets of the business, then generally there would not be anything from which to collect. This would mean that even with a judgment from a court against the business, there would be nothing for a creditor to seize or garnish.

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