Partial Business Owner.. Cause for Concern?

[Bman408]

Hello to all. My question stems from being a 10% owner of an S-Corp that is filing for BK. There is a combination of tax debt and vendor debt that is the reason for the BK. I know the tax debt can not be rid of through the BK but the vendor and credit card debt in the name of the other owner is overwhelming. Do i need to take precautionary measures to protect myself from being effected by the BK, or will I not even have to worry? How is something like this handled or what should I do if I do need to protect myself as I am such a minority owner? I look forward to you responses and thank you all in advance.

[Boscoe]

Wow. S Corp. I'd definitely speak to a couple of bk attorneys. My vague recollection of S corps is that the income flows to the individual.

There may be exposure here for you, but then again, maybe now, which is why a good bk attorney is necessary!

[lrprn]

We have several former S corp members who hang out here in the forums. I'm betting they'll be jumping in with suggestions when they see this thread.

Combined business and personal debt is always an uneasy mix in bankruptcy. As Boscoe said, you need experienced legal representation for this one.

Start by making 3-4 free consultation appointments with experienced bankruptcy lawyers in your area. Martindale.com is a good place to get an initial list of names. Even better if you know reliable local lawyers who can give you a strong referral to a bk lawyer more experienced on the business side of things.

Put your cards on the table and see what they advise. This is the best way to find out where you really stand and what's going to protect you best over the long run. It also gives you a chance to see who you think you can work with best.

Hang out here with us and keep asking questions. We'll help you sort out things as much as we can.