Your business credit card statement arrives, and the balance makes your stomach drop. Maybe your company hit rough waters, or perhaps a client never paid that big invoice. Now those business expenses you charged months ago feel like an anchor dragging you down. Can bankruptcy help you break free from business credit card debt in Florida?
The short answer is yes. Business credit card debt can often be discharged through bankruptcy in Florida, but whether you can eliminate this debt depends on how the card was set up, what you purchased, and when those purchases happened.
Business Credit Card Debt in Florida
When you applied for that business credit card, you almost certainly signed a personal guarantee. This means you promised the credit card company that if your business cannot pay the debt, you will pay it from your personal assets. Even though you’re using the card for business expenses, you are personally on the hook for the balance.
This matters because most business structures like LLCs and corporations normally protect your personal assets from business debts. However, when you sign a personal guarantee, you voluntarily give up that protection for that specific debt. The credit card company can pursue you personally regardless of how your business is structured.
Discharging Business Credit Card Debt Through Florida Bankruptcy
Business credit card debt with a personal guarantee can be discharged through personal bankruptcy in Florida. Because you signed that personal guarantee, the debt became your personal obligation. When you file for personal bankruptcy under Chapter 7 or Chapter 13, you can include this business credit card debt just like any other personal unsecured debt.
This works even if your business is still operating. Filing personal bankruptcy discharges your personal liability for the debt. If your business files for bankruptcy but you personally guaranteed the debt, you still owe the money. Business bankruptcy and personal bankruptcy are separate. To eliminate your personal obligation on a business credit card, you must file for personal bankruptcy.
Chapter 7 Bankruptcy and Business Credit Cards
Chapter 7 bankruptcy can eliminate business credit card debt in roughly four to six months. When you file Chapter 7 in Florida, an automatic stay immediately stops creditor collection efforts. This means credit card companies must halt lawsuits, garnishments, and other attempts to collect while your case is active.
A court-appointed trustee will review your assets to determine whether any nonexempt property can be sold to repay creditors. Florida provides strong bankruptcy exemptions under Florida Statutes Chapter 222, which protect many types of property. While many filers are able to keep most or all of their exempt assets, the outcome depends on the specific facts of your case.
Business credit card debt is typically unsecured debt, meaning it is not backed by collateral. Once you receive your discharge order, you are no longer personally obligated to pay those balances.
If more than half of your total debt was incurred for business or non-consumer purposes, you may qualify as a “non-consumer debtor.” In that case, the Chapter 7 means test, which normally determines eligibility for Chapter 7, does not apply.
Chapter 13 Bankruptcy as an Alternative
Chapter 13 bankruptcy requires you to propose a repayment plan lasting three to five years. You make monthly payments to a trustee who distributes the money to your creditors according to the plan. Unlike Chapter 7, Chapter 13 does not liquidate your assets.
Your business credit card debt would be classified as unsecured nonpriority debt in a Chapter 13 plan. These debts typically receive only a percentage of what’s owed, or sometimes nothing at all. After you complete all plan payments, any remaining balance on dischargeable debts including business credit cards gets wiped out.
When Business Credit Card Debt Cannot Be Discharged
Not all business credit card debt can be discharged in bankruptcy. Under federal law, 11 U.S.C. § 523(a)(2)(C) lists certain debts that are presumed nondischargeable if incurred through recent luxury purchases or cash advances. These presumptions exist to prevent abuse and are based on the timing and nature of your charges.
As of April 1, 2025, if you purchased luxury goods or services totaling more than $900 from a single creditor within 90 days before filing bankruptcy, that debt is presumed nondischargeable. Likewise, cash advances totaling more than $1,250 within 70 days before filing are also presumed nondischargeable. These dollar limits are adjusted every three years to reflect inflation.
You can overcome these presumptions by proving the charges were not fraudulent or that you intended to repay them, but the burden of proof falls on you. In practice, most credit card companies do not pursue adversary proceedings because they are costly and require evidence. However, if you made significant or unusual charges shortly before filing, expect the trustee or creditor to scrutinize those transactions closely.
To avoid potential fraud allegations, stop using your credit cards once you’ve spoken with a bankruptcy attorney or decided to file. Any charges made after you know you plan to file could be treated as fraudulent and may not be discharged.
Special Considerations for Sole Proprietors
If you operate as a sole proprietorship, you and your business are one and the same for legal purposes. When a sole proprietor files bankruptcy in Florida, all your business debts and personal debts get included together. After receiving a bankruptcy discharge, you can continue operating your sole proprietorship. The discharge eliminates your obligation to pay the old debts but doesn’t shut down your business operations.
What Happens to Your Business After Filing
You can continue operating your business after filing personal bankruptcy in Florida. When you file personal bankruptcy and discharge business credit card debt, you eliminate your personal liability. The credit card company will likely close your business credit card account when they learn about your bankruptcy filing. However, after your bankruptcy case closes, you can apply for new credit.
Protecting Your Property Under Florida Exemptions
Florida offers some of the most protective exemption laws in the country. These exemptions allow you to keep property even when filing Chapter 7 bankruptcy. Florida’s exemptions are found primarily in Chapter 222 of the Florida Statutes.
The most significant is Florida’s homestead exemption, which protects your primary residence with no dollar limit as long as the property meets size requirements. The homestead exemption requires 1,215 days of continuous property ownership before filing to receive unlimited protection. Other important Florida exemptions include retirement accounts, life insurance cash value, and disability income. To use Florida exemptions, you must have lived in Florida for at least 730 days before filing bankruptcy.
Key Takeaways
- Business credit card debt can typically be discharged through personal bankruptcy in Florida if you signed a personal guarantee.
- Personal guarantees make you individually liable for business credit card debt regardless of your business structure. Business bankruptcy alone will not eliminate your personal obligation.
- Chapter 7 bankruptcy can discharge business credit card debt in about four months, while Chapter 13 allows you to repay a portion over three to five years.
- Purchases over $900 within 90 days before filing or cash advances over $1,250 within 70 days before filing are presumed fraudulent under federal law. These amounts are subject to periodic adjustment.
- Filing personal bankruptcy does not require you to close your business.
Frequently Asked Questions
Will filing bankruptcy hurt my business credit?
Filing personal bankruptcy affects your personal credit, not your business credit directly. Your business can rebuild its credit separately after bankruptcy.
Can I keep some credit cards when filing bankruptcy?
You must list all credit cards when filing bankruptcy. You cannot pick and choose which debts to include.
How long after bankruptcy can I get a new business credit card?
You can apply for new credit immediately after receiving your bankruptcy discharge, though you’ll face higher interest rates initially.
What if my business partner also signed the business credit card?
If someone else co-signed, they remain liable for the debt even if you file bankruptcy. Your discharge only eliminates your personal obligation.
Can the credit card company take my business equipment?
Business credit cards are unsecured debt. The credit card company cannot repossess your business equipment or inventory.
Do I need to include business credit card debt if my business has closed?
Yes. If you signed a personal guarantee, you must include business credit card debt in your bankruptcy filing regardless of whether your business is still operating.
Contact The Golden Law Group Today
Facing overwhelming business credit card debt doesn’t mean your financial future is hopeless. At The Golden Law Group, we help Brandon business owners and individuals throughout Florida find real solutions to debt problems through bankruptcy.
Our team will review your specific situation to determine whether bankruptcy makes sense for you. We’ll explain how business credit card debt can be discharged through Chapter 7 or Chapter 13 bankruptcy. We’ll discuss timing strategies to avoid fraud presumptions and identify all available exemptions under Florida law to protect your property.
Stop losing sleep over business credit card statements. Take action today to reclaim your financial future. Reach out to The Golden Law Group now to schedule a free consultation and learn how bankruptcy can help you eliminate business credit card debt in Florida. Your fresh start is within reach.
