Going out of Business: What Happens to Business Credit Cards?

You must close all your business credit cards when you go out of business. If you have low balances, you will only need to pay the balances and close the card. The challenge comes if you are in too much debt to credit card companies to overcome when you decide to close your doors. Then, you may need to resolve the debt in another manner.

Surrender Assets Voluntarily

If you have business assets that were used as collateral on your loans, you can surrender the assets to the lenders to resolve the debts. Since you are going out of business, this option is often painless. Many businesses choose to sell off all assets, from computers to filing cabinets to display cases, in order to repay debts before closing.

Declare Bankruptcy

If your business is legally incorporated, it can go bankrupt without harming your personal life. This option is still legally costly and can be very stressful. However, if your business does not have a large enough asset base to cover the debt it owes, this is one way to ensure you will not have to personally make payments on the business credit card debt left outstanding.

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