Here is a recent story I read about bankruptcy fraud. Unfortunately, this happened to former big league star, Lenny Dykstra.  He is being accused of selling off his personal assets that were under control of his bankruptcy estate, monitored by the trustee.   This includes selling off of some sports memorabilia, and even the kitchen sink!! It’s a good read, but an unfortunate story.  This leads me to the moral of the story, if you are starting a business, use a lawyer.  Obtain some type of corporate protection, whether it’s an LLC, an S-Corp. or something similar.  This insulates your personal assets from the business, should things not work out as hoped.    Also, try to avoid personal guarantees, they will survive a closed business, and the only way to get rid of them is to pay them off, or file a personal bankruptcy, such as Mr. Dykstra filed.   Always seek the advice of your bankruptcy lawyer as well.