S corp and personal chapter 7

[jtkz]

I incorporated six months ago. Squeeking buy on the business side, but dragging a lot of debt on the personal side. How is a chapter 7 handled if i own 100% of my corp? how is a value placed on it when its only asset is a work van valued at $5000.00. Could its value be protected with my wild card and the unused portion of my homestead exempting?

[frogger]

Could its value be protected with my wild card and the unused portion of my homestead exempting?

No. Your corp has no exemptions. The corporation, along with anything it owns, will be listed as an asset when you file. Any a/r that the corp has will also be a non exempt asset.

[jtkz]

I am not filling bk on the corp. I am thinking or filing personal bk. So I own a corp valued at 5k and file, the corp is a asset, it seems like it should be no different than any asset. lets say I owned 1% of a corp worth 500,000k value would be the same ,5k. What waould happen then? It seems to me it would be no different than owning $5000.00 worth of General motors stock ?

[jtkz]

Oh, you said it would be listed as a non exemt asset, So could its value be exempt if i did not have any other assets ?

[jtkz]

I guess what i am sayingi is the corp is not looking for an exemption, it only has value . Would its value be treated as any other asset? also what is a/r mean in your response?

[frogger]

a/r = accounts receiveable

And no, it is not treated as any other asset because you can not exempt it. You're most likely going to need to provide p/l statements, and you will be needing to provide banking information, so get everything together.


Perhaps you can buy it back from the trustee at a good price....

[StartingOver08]

Frogger is right. The corp is considered an asset of yours - a personal asset. It has a value and must be listed on your petition. Use a BK attorney that has specific experience with small businesses. Accounts Receivable outstanding as of the FILING date belong to the Trustee. Discuss this with your attorney.

Also, if you have debt incurred by the corp and personally guaranteed by you, your personal BK will discharge your personal liability for the debt but the corp will still owe it.

[carlsbadmike]

Chapter 7 & S Corp

I just filed CH 7 and own an S Corp that has been losing money for quite a while and had about $1500 in assets. My attorney advised me to include the debts in my personal BK so that they would be discharged against me personally. I also had to claim the assets of the S Corp in my personal BK and will have the option to buy them back after my 341 meeting with proper documentation. I am doing this so that I can keep my computers and cell phones. If your business income has brought on your BK filing you may want to go ahead and close down the business. It was hard for me initially to consider doing this but I didn't have a choice in the end. Good luck to you.