S Corp and Ch 7 Question

[Overmihead]

I was just reading some other posts and came away with a new question....
will filing a (personal/consumer) Ch 7 have any impact on the business (partnership in an S Corp)? It is a service company, struggling quite a bit over the past year (hence our reduced salary/personal financial situation getting to the point of bankruptcy). We are hoping it will be business as usual and there won't be any terrible impact on the company because of the BK. ??
Of course we will be asking an attorney about this, but are not able to retain one until after tax refund time, so would like to have an idea of whether or not this is something to worry about it.

[StartingOver08]

When you file a personal Ch 7, the S-Corp is considered an asset of yours in the BK.
You will have to provide all the detailed financials of the business to the Trustee too.
Your A/R as of the filing date belong to the Trustee. Money earned after the filing date does not. Because you have a partner, this complicates the whole thing.

Read some of the threads in the Small Business section to get an idea of some of the challenges you might face. Make sure your attorney is experienced with filing BK's and the small business complication.

[bkpain]

Overmihead your not alone in this S-corp mess. I too have a service business and have been trying to learn more. Unfortunately, I don't have the answers you want but I want them too!

[Overmihead]

Thank you, StartingOver & bkpain. I started reading the small business thread but haven't found our particular situation yet (filing personal Ch 7, partnership in S Corp that we need to remain intact & functioning...it is our sole source of income right now). There are more pages on that thread I haven't gotten to, so I'll keep looking. And I'll be sure to look for an attorney familiar with this situation. Makes me think we need to get in to one, at least for the free consult, asap, so that we know how to proceed in the business as well.
bkpain, if you learn anything else about this situation, please post or PM me!

[SleeplessMI]

I'm filing personal Chapter 7 and am sole shareholder in two C-corps. My atty wants the corps' tax returns for 2007, 2008, and 2009, and detailed monthly profit & loss statements and monthly bank statements for 2009 for both businesses. This is because your personal creditors want to know that you're not using the business to hide money from them.

The hardest part for me was that many of my customers are on a nonnegotiable payment schedule that deposits 30-60 days after they buy from me. I've actually had to stop doing business while I prepare the bankruptcy to ensure that I'll have $0 in receivables on filing day. If you have any leverage with your customers, you might consider getting all of them to pay up before you file and then spending that money on legitimate expenses for the business before you file your BK.