What are the differences between personal and corporate bankruptcy?
What are the differences between personal and corporate bankruptcy? Min Austria Assistant at Ascent Law LLC Personal bankruptcy is a form of debt relief for individuals. But if you have a business, you may have to file a separate bankruptcy to get the same type of relief. Unlike personal bankruptcy, where you have to pass a means test, corporate bankruptcy does not. One of the major differences between personal and corporate bankruptcy is the effect on the business. A sole proprietor can file for personal bankruptcy, while an incorporated business cannot. The individual who files for bankruptcy gets a discharge of the debt, which normally includes the corporation's debts. As a result, a business owner can face criminal sanctions if he intentionally fails to buy back assets. There are a few exceptions. Some debts are not dischargeable in bankruptcy. These include home mortgages, alimony, child support, and certain taxes. Other non-dischargeable debts include benefit overpayments, fr...