Personally Guaranteed business debt? Don’t Worry – Discharge it in a Personal Chapter 7 Bankruptcy

12/01/2013

We consulted with a single woman who rented her home, and owned personal property valued at $2,186.41.

Our client’s debt totaled $288,179.42, all of which was unsecured. The majority of the debt was comprised of business credit card debt and personal guarantees that she had incurred while owning a business that had recently stopped operating.

Our client was employed. Her monthly expenses ($2,810.67) exceeded her monthly income ($2,206.97) by $603.70. We filed a Chapter 7 bankruptcy case.

Our client owned non-exempt personal property worth $2,186.41, and, since she was entitled to personal property exemptions totaling $5,000.00, all of her personal property was exempt.

Our client was relieved when the trustee filed a report of no distribution. She got to keep 100% of her assets and discharged 100% of her debt !

This case was a good example of filing a personal Chapter 7 case to discharge business-related debt.

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