Personal CH7-do I have to include business debts?

[TTINC]

I am filing a personal Chapter 7. I also have a business that is an S-Corp. I recently moved the business and basically had to start from the ground up so all equity in it is exempt.

I met with an attorney who said that I have to include all Corporate debt in my BK if I signed a personal guaranty for it even though it is in the businesses name. He also said that the automatic stay would not apply to this debt and that the Corp. would still be responsible for paying it. Is this correct? Is there any reason that this debt would have to be included in a personal BK since I am not filing on the business? I realize I signed for these loans as an officer of the business, but isn't the corporation a separate entity as far as the BK is concerned?

[HHM]

A corporation is a seperate entity, but there is a difference between signing as an Officer (the person authorized to sign for the corporation) and signing a personal gaurantee where you are agreeing to be personally liable for the debt in the event the business defaults on those debts.

You should probably listen to your attorney, but if the debts of the corporation for which you have signed a personal guarantee are all current, then I don't think you would need to list them because it hasn't become a personal liability. But the flip side is, if the corporation gets behind on those debts and you did not include them in the BK, they won't be dishcarged and because your donig a chapter 7, you won't be able to file on them for 6 years (8 years under the new law).

[TTINC]

If the BK is a no asset case then aren't all debts discharged regardless if they are listed or not?

[HHM]

No,
Creditors have to be put on notice of the BK in order to receive a discharge of their debt.

And strictly speaking, it probably won't be a no asset case, remember, your business IS A PERSONAL ASSET in so far as you are a shareholder. You have an equitable interest in business assets and that equitable interest becomes property of the BK estate.

[TTINC]

Thanks,
My case will be no asset because there is less than $5,000 equity in the business and it can be exempted under the wildcard since I am not using it on anything else. I don't have any other assets.

I know it probably appears that I am trying to have my cake & eat it too, but I am just scared that if I list a corporate debt like an equipment lease that I guaranteed that they will want to take back the equipment & I will need it to keep the business operational. I have no intention of closing the business or defaulting on these debts.

[BrokeCh7]

S-Corp

I just finished mine - Discharge this month.

The corp asets including reciveables, inventory and eqm. where listed when filed. Personal wild card work but i also listed my share in the corp as 0 value because the corp was in debt for taxes and basicaly worthless. Also included the DBAs in BK because my attorney said i needed to.

In getting the information togather for my attorney I did not understand that i needed to include all my venders including my CC proessing company etc. I thought that because all my venders where paid in full and did not have any out standing accounts (and belonged to the corp not me) that they would not be included. After i filed my attorney said i should have but because i did not owe them it would not be a big deal. The venders would not be included in the discharge and this was just fine with me.

The trustiee did rattle me in the 351 meeting. I ran my company as a DBA and them turned it into a S-Corp and he wanted to make sure i was not hidding my assets this way. It was a long 3 months until i was discharged it helped to watch my credit report and then pacer helped too. I just received my discharge on pacer and am still waiting for it in the mail.

Never want to go down this road again.

Good Luck

[buster92]

s-corp that has closed and filing seperate bk

since you just went through this maybe you can help me. i closed an s-corp 2 yrs ago and i have alot of debts from corporation. i am also getting ready to file a bk and was wondering if i can put my name and dba the corporation name? i heard that i m supposed to file 2 separate bks. one personal and one for the corporation???? do you know??

[BrokeCh7]

Buster

I filed a personal bk and wanted to keep my corp. This is the only way i could make any money. Without it i would be in the wellfare line with my hands out.

I do know that a business BK is diferent from a personal one. You would be best to consult someone (attoney) who knows. Also if you closed your s-corp and was personally responsiable for all debts then you just might be able to wash everything in your personal bk, but again i am just guessing.

Good Luck

[TTINC]

If you don't mind me asking, did the personal BK have any effect on your D&B report or any of your business credit lines?

Everything for my business is current and I am just terrified that my good business credit lines will be shut off if any of my vendors get wind of the BK.

[BrokeCh7]

D&B

If you don't mind me asking, did the personal BK have any effect on your D&B report or any of your business credit lines?

Everything for my business is current and I am just terrified that my good business credit lines will be shut off if any of my vendors get wind of the BK.

Don't freak out but as an owner of a business my D&B showed my personal bk and when i talked to them about this i was told it was going to stay on my D&B for 25 years.
@#$$% #$%$ @#4 2%&* Sorry this happens every time i think of this.

Even if you have a corp. it will be in the part of your D&B on the officers of the corp. ie: CEO: Jon Doe - personal bk in April 2005. So yes your crediters and you compatition will know and could use it.

Good luck and change the CEO to your dog or other pet. PS just kidding.

[buster92]

do you have to file a seperate ch 7 bk for the corporation???

[BrokeCh7]

Ch 7 Corp

You should contact a lawyer on your corp. Every case is different and what will work for one may not work for the other. I was able to wash all debt because it was all personal and none of it was tied to the business except where personal funds where spent on busniess needs. This debt was still personal and not part of the business as far as my attoorney said. I also did not own anything (divorce wiped me out) this made it very easy to exempt my business (California Wild Card - $17,000.00). I did work with a lawyer because for the $700.00 he charged i was able to ask alot of questions and made sure my business was mine in the end. The prosess did freak me out at times but now that it is almost over I can try to get on with it.

Signed
Still in business after BK