If you own an LLC or a corporation, and are thinking about filing for bankruptcy, you may have some questions or concerns regarding whether your business debt will be discharged in a Chapter 7 bankruptcy. By owning an LLC or a corporation, you probably have business debt and personal debt. Business debt is debt that arises from the operation of your business. It is money that you owe from running your business. It is debt that is owed by the business entity, which is separate from the debt owed by you as the owner of the business. Personal debts from running a business can come in the form of taking out loans and incurring credit card debt to pay business expenses. It can also come about when you as the business owner, agree to “personally guarantee” a business loan, which means that you as the owner, agree to be personally responsible for repaying the business loan, in the event the business is unable to pay the loan itself.
