My husband has been in business with one of his closest friends for a few years now. But now, his friend is going through some tough times, and he’s talking about filing for bankruptcy.
Of course, my husband wants what’s best for his friend, but he can’t help but be concerned about their business… I told him he should maybe speak with a professional who knows about bankruptcies and other debt solutions, and I think he will do it eventually, but for now he’s trying to convince his friend to find an alternative solution.
Does anyone know what would happen if his friend, and business partner, filed for bankruptcy? Would the business be in danger?at #245
I have no idea, sorry… But I do think that when an entrepreneur who owns a small business files for personal bankruptcy, their business assets will be included in their personal assets, so they have no choice but to go out of business, I guess…
I hope this situation will be ok for your husband and his friend!at #291
In a business partnership, if one of the partners files for bankruptcy, the other partner can buy their share of the business, so they can continue managing it on their own.
So I think there would be no danger for your husband’s business, as long as he is able to own it and operate it on his own. I guess he could also try to find a new partner to manage the business with him.at #293
Ok, so if his friend files for bankruptcy, my husband isn’t put into bankruptcy as well, right?
But what if he’s not able to buy the share of his partner?at #297
No, your husband will not be put into bankruptcy as well, no need to worry about that. If your husband is not able to buy the share of his partner, I’m not sure what would happen. I think the partnership can simply be dissolved, but I’m not sure how that works.at #299
Ok, thanks. Part of the problem is that they had a large business loan together, and it was fine, but if his friend files for bankruptcy and my husband is left to manage the business alone, I guess he’ll have to repay that business loan on his own, right? That might be more difficult.at #301
Yeah, he would still be responsible for paying back the loan. Maybe he would be able to modify the terms of the loan, though, it all depends on the lender.
You should show him the website of Harris & Partners Inc. They have a lot of information that could help him, and if he wants to speak with a licensed insolvency trustee, I recommend their services.
Maybe they could also help out his friend and business partner.at #303
Thank you. I think that will be helpful, indeed. My husband would not mind managing the business alone, but it’s mostly that business loan he’s worried about.
I’m sure everything will be fine eventually, but right now he’s asking himself a lot of questions.at #307
Sure, I don’t know the whole situation, but do you know if your husband’s friend considered another option before considering filing for bankruptcy?
If he’s struggling with his finances, maybe a consumer proposal would be a better option for him than a bankruptcy. Maybe it would allow him to keep his share of the business too, but I’m not sure about that one.at #309
I don’t know if he considered a consumer proposal… I think we’re gonna invite him over for supper and have a discussion about this. Hopefully, we’ll find out things are not as bad as they seem!
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