Legal Question in Bankruptcy in Illinois

Thank you for your question. I think it is best addressed with two answers.

First, if the judgment is against the business, you may not have any liability. What is the nature of the judgment? Was it for a debt that you also personally guaranteed in addition to the Corporation? My guess is that this a judgment for damages, and as such, only the Corp would be liable. Thus, a personal bankruptcy would not really be necessary nor would it help you.

Next, there are two types of business bankruptcy. First, there is a Chapter 7, which is akin to a liquidation. Under a Chapter 7, the businesses ceases activity and its assets are sold to pay off creditors. There is also a Chapter 11. This is a business "reorganization" whereby a business is able to repay some fraction of its debts over the course of typically 5 years. The business continues operations as normal in a Chapter 11.

Depending on the nature of you business, either a Chapter 7 or 11 could be most useful for you. Generally speaking, trades businesses can complete a Chapter 7, wipe out its debts, and start over very easily. This is ideal in an owner/operator situation.

There are multiple moving parts here. I would be more than willing to discuss this further should you so desire. My email is: [email protected]

Thanks

Adam S. Tracy, Esq