Can S-CORP continue business post discharge

[imran93]

Thanks freeatlast, I got the same kind of 1099-c. Just curious, did u ever got a call or a letter from some collection company trying to collect from your company

[freeatlast09]

did u ever got a call or a letter from some collection company trying to collect from your company

No, but again we did dissolve it so it's a dead end if anyone looks for it. Some people advise just abandoning the corporation and the state will administratively dissolve it for you (which can work), but for a small filing fee (free in some states) you can do it properly. It's just peace of mind knowing that you won't be haunted later. As justbroke mentioned - there were creditors trying to find money/assets after the bankruptcy - so it can happen. Best of luck to you.

[NewStart2012]

Hi! So, is it ok to just file a final for the corp but not dissolve it? When we're released of personal liability from a 7, and don't have assets, and don't use the corp anymore, can the creditors still come after us? TIA!

[HHM]

Hi! So, is it ok to just file a final for the corp but not dissolve it? When we're released of personal liability from a 7, and don't have assets, and don't use the corp anymore, can the creditors still come after us? TIA!

Can they come after the business, yes. Will they, not likely.

Even dissolved or defunct corporations can still be sued. Basically, if the business is dead, most people will file the final tax return, and simply let their annual state secretary of state filing lapse.

[NewStart2012]

Thank you for the quick reply! Yes, we believe we'll do the same - file final and let lapse. Thanks again!

[justbroke]

I have actual experience with what HHM is writing about. About once every 3 months, I get collection calls for my dissolved defunct corporation. After telling one that my personal guarantee was discharged in the bankruptcy he still made it a point to tell me that they'd need to think about whether to still pursue the business. Makes me laugh, but it was probably a Junk Debt Buyer (JDB).

[NewStart2012]

Thank you justbroke for chiming in. Really? But, can they "really" do anything other than bug you? What exactly is a junk debt buyer? Are they investors who buy other people's debts?

[LadyInTheRed]

What exactly is a junk debt buyer? Are they investors who buy other people's debts?

Yes. They pay pennies on the dollar for debts that the original creditor decided are not worth the trouble to try to collect.

[NewStart2012]

Hi LITR! Thanks for clarifying. So, can they keep bugging you even after ch7 discharge? We're not there yet; but hopefully w/in next couple months

[justbroke]

Well, they shouldn't bug "you" since "you" have discharged the debt. However, I kept my business phone number so they keep calling that number. I hardly ever answer it and they tend to leave voice mail. I call back and ask what they are calling about and they mention my old business.

In fact, one was for my DBA (not my Corporation). The creditor (JDB) told me that it was a business and they could pursue the debt. In this particular case, not the Corp debt, I told him that it was a DBA and that it was actually listed on the petition. He said he call back after he verified that it was (on the petition). I haven't heard from them in months!

Actually I threatened the creditor that if one more person called about the debt, I would re-open the case and have them appear before the judge about it. Maybe that's why they haven't called back.

[lillymarlene]

I have actual experience with what HHM is writing about. About once every 3 months, I get collection calls for my dissolved defunct corporation. After telling one that my personal guarantee was discharged in the bankruptcy he still made it a point to tell me that they'd need to think about whether to still pursue the business. Makes me laugh, but it was probably a Junk Debt Buyer (JDB).

I don't even have and never had a corporation, but these debt collectors are relentless, I have experience with this too. My Dad operated our "family business" for years, as a sole proprietorship, with a lot under his name, and a few joint accounts with my brother or myself and a few other items under our individual names. He passed away in 2006, leaving behind about $750K in debt, quite a lot of it unsecured. Then in 2009 and 2010 with the advice of our accountant, we separated what was left of this business into 2 separate entities, obtaining new tax id numbers, and changing the names slightly.

My brother and I still get occasional calls from a couple of banks and junk debt buyers, that will say something like: But you answered the phone as XYZ Company! We usually reply: No this is now XYZ Company of Anytown, that was my father's company; he's deceased...

No, that's good advice from HHM and others. Just change your name to something your customers will recognize, but different enough for those stubborn bill collectors

[jst4f]

We had LLCs pre-BK with CC with some of them. We got calls from the CC reminding us that the CC debt is still owed by the LLC. We reminded them that the LLCs had no assets. They never called back. In the mean time we have closed out the LLCs.

[NewStart2012]

Ahhh...good to keep in mind re: threatening them to reopen your case Good tip! Thanks for all the info.

[NewStart2012]

Jst4f, thank you for sharing your experience. Did you dissolve the LLC or just close them? Is there a big difference between LLC and S Corps when it comes to bk related issues?

[HHM]

Is there a big difference between LLC and S Corps when it comes to bk related issues?

No difference, a separate corporate entity is a separate corporate entity, regardless of what form it takes (e.g. LLC, LLP, Corp...note, S vs C corp is merely a "tax designation," under your state law in which you incorporate, you are simply a for profit corporation, the S and C designation is only for IRS purposes, but a S and C corp, are not, in essence different types of entities).