New to Forum

Hello, I'm new to the forum and have a few questions.

My husband and I own an S Corp. Our main asset is a tractor trailer which he drives and I do the books and other office stuff.

We are planning on filing C7 in about 6 months and we have already consulted with an attorney. However, that was a few months ago and the situation has changed a little. At the time, we were still making payments on the truck/trailer and the attorney said we had nothing to worry about.

Now, we have paid off the truck and are planning on paying off the trailer as well. This truck/business is our only source of income and we don't have any plans to dissolve it or cease operations. One of my questions is, now that the truck is paid off and becomes a free and clear asset, can the trustee take it? Our only other business assets are the computer equipment, cell phones and office desk.

My other question is regarding business credit cards and SBA line of credit. At the time we spoke with the attorney we did not owe much on the business credit cards but we do now. Do they get included in the C7 or do we have to dissolve the business to make them go away? How about the SBA line of credit?

Again, we do not want to dissolve the business or cease operations.

Thank you.

The S-Corp is an asset of yours.

The tractor trailer becomes an asset of the BK estate. To keep it, it has to fit within your exemptions. Look up your allowed exemptions here:

www.legalconsumer.com

Yes the business credit cards can be included in the petition - they are most likely personally guaranteed anyway. The SBA loan, look to the loan note to see if you have a personal guarantee - most likely you do.

The business is tricky - as it is considered an asset of the BK estate. You need an experienced BK attorney to walk you through the process.

Thank you, I cheched the link but i couldn't find anything specific for our situation. I have used that site before to do the means test.
We are going to consult another attorney on Wednesday.
I don't get how can they take away your only source of income? There has to be an exemption for that. I guess we will find out on Wednesday.
Thank you very much.

We checked with 2 attorneys and one said the business was a separate entity and nothing would happen to the assets. We did not think he was right.

The other attorney did say that the tractor trailer was an asset but not to worry about it right now since it is not worth much an we can use the trade tools exemption or even the automobile exemptions.

He also told us not to default on the business cc and SBA line of credit if we are keeping the business open because we would no longer be personally liable but the business would and the creditors can come after the business assets.

Do the credit card companies really come after the business? What if we change the business name? I have read on other post that you just don't pay the personally guarateed business cards and that's the end of it? Is that the case if the business continues to operate?

If you have an S-Corp and you continue to do business in that name, when you file a personal Ch 7, your personal liability for that debt is discharged when your Ch 7 is discharged.

However, the cc company can get a judgment against the business for the amount of the cc debt if you stop paying on the debt. They can then take funds out of your business account to satisfy the judgment. They still have to go thru the process to sieze the funds. That is why many S-corps just close. Yes, they can go after any other assets of the business too, not just bank accounts.

Did you read the article here? http://www.moranlaw.net/struggling.htm

I don't think you can just change the name of the S-corp, but you would need to ask an attorney. You may need to open a new S-Corp. That is why you need an attorney to walk you thru the process.

Thank you for the link. Very helpfull information.