I made an unsecured business loan to an individual. This person is now filing a no-asset chapter 7 bankruptcy. Will the business loan be considered dischargeable, or can I dispute it since it was not a personal loan.
Sole-proprietor businesses have their assets and liabilities tied together with the individual, so I would say the loan is not exempt from chp 7. If the person has a separate account for the business, however, you can discover whether there are any assets in that account during proceedings.
In chapter 7, all debts combined personal & business are discharged. This is not selective bankruptcy. However, the filing party may elect to execute reaffirmation agreements.
