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Can I repay myself?

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    Can I repay myself?

    I have a company that has a business loan for 1million dollars that the bank has chosen not to renew in June. I can't pay it off, so we will be filing Chapter 7 due to the fact that our total debt load will be around 2million.

    We are current on everything, but we are wondering if we can repay a small portion of the loan we made to the company in excess of 400K and not pay the bank? The amount might be 10K-50K.

    #2
    You need a good business bankruptcy lawyer. Part will be determined by what the organization of the company is (LLC, S-Corp, Sole Prop, etc). I would venture to guess that the Trustee would see it as a preferential payment and sue to get it back from you, unless the type of business entity is really an extension of yourself (S-Corp, Sole Prop, partnership, etc).
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

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      #3
      How do you find a good "business" bankruptcy lawyer?

      Comment


        #4
        Originally posted by spearmint View Post
        How do you find a good "business" bankruptcy lawyer?
        Word of mouth. I would look to lawyers who could handle a Chapter 11. Then check the local bar to see if there are complaints.

        I say check to see if they do Chapter 11s, because those are used more for business restructuring.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog

        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

        Comment


          #5
          Well it is a S corp...what do you think?

          We don't want to restructure and the costs of Chapter 11 are outrageous, if they prove to be successful.

          Comment


            #6
            Originally posted by justbroke View Post
            Word of mouth. I would look to lawyers who could handle a Chapter 11. Then check the local bar to see if there are complaints.

            I say check to see if they do Chapter 11s, because those are used more for business restructuring.
            If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

            Comment


              #7
              Originally posted by howtoplan View Post
              We don't want to restructure and the costs of Chapter 11 are outrageous, if they prove to be successful.
              I didn't mean to imply that you should file Chapter 11. I was just making an observation that a lawyer who can handle a business Chapter 11, could certainly handle a business liquidation under Chapter 7 too. But, they'd make less money on the Chapter 7.

              I just wouldn't go with an ordinary consumer Chapter 7 firm.

              Plus, you mentioned that it's an S-Corp. As my bud 'Hub wrote, my comments should be measured by where they are coming from... an anonymous person sitting at a keyboard at 11PM on a Thursday night... who doesn't know you from Adam.

              Having wrote that, S-Corps and bankruptcy can be particularly challenging (I had one, but I let it dissolve first). Are you personally filing? Is the corporation filing? Is this closely held (one one or two people)?

              See... so many questions, and I can't really tell you what one would do over the other because there may be consequences that I haven't experienced.
              Last edited by justbroke; 03-12-2009, 07:49 PM.
              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog

              Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

              Comment


                #8
                I wouldn't do it without as the others saying consulting a lawyer first. My gut tells me that you shouldn't do it. It would be considered and insider trade. However a lawyer in your district familiar with how the trustees there operate would be a better person to gauge the situation.
                May 31st, 2007: Petition Filed by my lawyer
                July 2nd, 2007: 341 Meeting Held
                September 4th, 2007: Discharged and Closed.

                Comment


                  #9
                  Thanks everyone...

                  This is a nightmare obviously and stressed beyond belief. I'm just looking for a bit of opinion. We are confident in our attorney, he handles businesses debt all the time. chapter 7 has been what two attorneys have recommended, which we consulted with very good references. We have already endured a 2.5 year civil case for the chapter S corp and are mentally exhausted trying to save a losing business. I just want to be able to recoup a bit of what invested. The other company is a C corp, which provides our living.

                  I do appreciate the past replies

                  Comment

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