Can S-CORP continue business post discharge

[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

[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.

[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

[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]

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?

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

[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]

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!

[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.

[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]

imran93: just an FYI - we also received a 1099C for a company credit card, but the 1099 was in our personal name only - not the company name. The company was still a potential target for collections so we dissolved our old corporation and started a new one. Best of luck to you.

[imran93]

Thanks just role for reply. I did get the 1099-c with bk box checked and saying business debt and person was liable for debt. I think I did had the personal guarantee on loan

[justbroke]

Justbroke, thanks for the input. Did you got a1099-c also for the debt they called you about. Does 1099-c changes anything

They can't send "me" a 1099-C since it's not my debt. It was a debt of the defunct corporation. There was no personal guarantee.

[imran93]

Justbroke, thanks for the input. Did you got a1099-c also for the debt they called you about. Does 1099-c changes anything