While the process for an assignment for the benefit of creditors (commonly referred to as "ABC") and a business bankruptcy are similar, corporate bankruptcy lawyers are quick to point out that there are some fundamental differences.
The Impact of Filing Bankruptcy on a Business
The self-employed are always concerned about the impact the filing for bankruptcy may have on their business. To answer the question, it first has to be determined if the business is a sole-proprietorship or its own entity- whether that be a corporation, partnership, or limited liability company. If the business is a sole-proprietorship, the assets of the business are also the assets of the individual. In that case, the assets will be protected only to the extent the individual has remaining exemptions to cover the value of the assets (exemptions are discussed in previous blog entries).