Should You File Bankruptcy If Your Business Failed but Your Personal Credit Is Still Good?

It’s a common situation I see after more than 20 years as a Texas bankruptcy attorney: someone starts a business, it doesn’t work out, and even though their personal credit is still great, they’re left with lingering business debts — loans, leases, or unpaid balances that just sit out there.

At first, it might seem harmless. You haven’t heard from creditors or even your old landlord in months, maybe a year. But here’s the truth — those debts don’t just disappear. Eventually, creditors will come calling, and it’s rare for business lenders or landlords to simply write off what’s owed.

For example, if you took out an SBA loan, the government can pursue that debt for up to six years — and even garnish wages down the road. You might receive a notice of garnishment years after the business closed.

That’s why it’s critical to act early. Don’t wait until the debt resurfaces or until your financial situation changes. If you’re earning less now or your business has already shut down, this could be the ideal time to explore bankruptcy. Waiting could mean missing your best opportunity to discharge those debts — especially if your income increases later, making it harder to qualify.

At Shuster Law Firm, we’ve helped countless Texans protect their finances and move forward with confidence after a business closure. The sooner you get advice, the more options you’ll have.

📞 Call today at 972-315-6222 for a free consultation. We handle bankruptcy cases throughout Texas.