Personal Injury Lawyer
Owning a business comes with a host of financial risks you may not have experienced otherwise. If you’re worried because your business isn’t doing too well, you might be concerned about your personal finances. Is there a chance you would need to file for personal bankruptcy if your business has no money to pay off debt? It can get tricky, but there are some ways to protect your personal property.
The Legal Structure of Your Business
When determining the legal structure of your business, you should think about protection for your family and personal property. While a sole proprietorship might be a great option for someone just starting up a business, your personal property is in jeopardy if you have to file bankruptcy.
Setting up an LLC or a partnership is a better way to keep your personal assets and business assets separate. Creditors shouldn’t be able to seek personal assets if you run under these two structures.
Separating Business and Pleasure
The system isn’t airtight, and some creditors may try to rig it so they can go after your personal assets. The way to avoid this is by separating your business and personal lives completely. If you need a business loan, never put your personal vehicle up as collateral. Never sign a personal guarantee for a business loan. You should also have separate bank accounts. Your can pay yourself from your business account, but all your personal spending money should be kept separate.
Purchasing Property Separately
If you are married, you can purchase property separately from your spouse. Your name could be on everything associated with the business. Your spouse’s name could be on everything associated with your personal lives. Of course, the home would still technically belong to both of you, and you would be an insured driver on your vehicle, but to keep the finances separate and your personal property safe, this might be a good solution. The only trick to this is if there’s a divorce, your spouse could take the car, the home and any other large assets, but if you feel your marriage is secure, this could be a great course to take.
Calling a Bankruptcy Lawyer
As a business owner who also has a personal life, you want to do everything possible to keep your personal possessions safe from bankruptcy if your business faces financial trouble. To learn more about what you can do, call a bankruptcy lawyer, today.