Question for a firiend: Personal BK and an S Corp

[tyson24]

My friend has an S corp and is planning on filing personal BK. One of the few personally guaranteed debts for the S corp that she has is an SBA loan for equipment. Will the creditor of the SBA loan want that equipment back? It is a loan for $25,000.

My next question is, will a trustee want to dig into her business financials along with her personal BK? She will be dissolving the business 3 weeks before filing.

Thanks in advance.

[tobee43]

the only example i have is a friend who had a s corp....she filed BOTH personal and business for the s corp.

she listed all s corp debts on her personal as well as the business bk....it worked out fine for her. but she had to file two separate bk's.

[tyson24]

I was kind of thinking that the closing of her business and the filing of the BK might be too close together. Her busy season is spring (tanning) and June 1st would be her close date. I was thinking that the more time she could put between her file date and close date would be the best.

[tobee43]

I was kind of thinking that the closing of her business and the filing of the BK might be too close together. Her busy season is spring (tanning) and June 1st would be her close date. I was thinking that the more time she could put between her file date and close date would be the best.

well i know my friend did it simultaneously... and besides just because she's in bk does not mean she has the close her business the day she files....

[frogger]

The S-Corp is an asset of the owner and has no exemptions.

The trustee will need complete tax returns, profit/loss statements, and all supporting documentation for the S-Corp. The trustee will examine the S-Corp to see if it has any value, and if so, will sell the corporations assets. The current owner of the S-Corp can probably negotiate a good deal to buy those assets back if they so choose.

As to the equipment? It is a very good possibility that the lender will want the equipment back.

As to the dissolving of the corporation 3 weeks before filing bk? BAD IDEA It is a very good possibility that you are going to run into problems by doing this. Let the trustee dissolve the corporation for you. It will save you a lot of grief.

You can not separate your corporate business from your personal business!