Legal Question in Bankruptcy in Wisconsin

Sole Proprietorship and Bankruptcy

3 years ago I began publishing a monthly magazine which is mailed thru the US Post Office. After an unwise business transaction resulted in a large bounced check, and with rising publishing costs, I can no longer afford to keep publishing. I feel I need to file Bankruptcy, however I have been operating as a sole proprietorship. Can I file bankruptcy for the business, or will this be a personal bankruptcy?

An angry reader threatened that if I do not fulfill all my subscriptions, I would be guilty of mail fraud which would be prosecuted by the Post Office Inspectors - is there any truth in this? Can my outstanding subscriptions be included in debt discharge or am I forced to refund them?


Asked on 2/28/98, 10:12 pm

1 Answer from Attorneys
JAY Nixon nixon law offices

Bankruptcy Law and Mail Fraud

You ask whether you can file a banktuptcy for your sole proprietorship only. The answer is no. There is no legal distinction between you and your business. You also ask if mail fraud prosecution is possible if you fail to meet obligations to subscribers after a business banktuptcy. Criminal prosecutions are always a possibility, even when there is insufficient evidence to convict. Prosecutors are often inexperienced and are sometimes prone to a "rush to judgement". In order for you to be convicted, however, they would have to prove more that a failure to meet your obligations, since such failures occur in every banktuptcy. What the government would have to prove is that you intended to defraud. This would be difficult unless you have obviously raided the business account to access. Call me at 414-633-3090 if you wish to discuss further. Thanks, Jay K. Nixon

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Answered on 4/09/98, 5:00 pm


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