Personal chapter 7 but also some business debt. Confused

[dj007]

So i'm heading to chapter 7 but have some questions.

First i will be doing this pro se, already did my sister chapter 7 some months ago so feel somewhat confident i can get it done.

My my problem is that along with my personal finances i also have three inactive businesses that also went under ( two c corps and one llc)
i was the only member in all of them and they been inactive for more than two years and the state shows them as " Dissolution by Proclamation / Annulment of Authority" meaning that i failed to file taxes for the last two years on all of them.

I hear a corporation bankruptcy should be handled by an attorney but i would not have the resources to do so.Note that aside from my house this is a no asset case.

If i do a personal chapter 7 and list the names of the businesses, EIN numbers and creditors , wouldn't that discharge their debts????

I also read where a member of this forum was able to do a no asset chapter 7 on a c corp. Could i do a personal chapter 7 and at then same time or a week apart file for a business chapter 7???

[tobee43]

i had a sub chapter S. i filed two petitions. on by personal and i listed ALL the business debt. and then did a separate petition on the business. the thing here is there is a difference C corporations are subject to double taxation; that is, one tax at the corporate level on the corporation's net income, and another tax to the shareholders when the profits are distributed. S corporations have only one level of taxation. all of their income is allocated to the shareholders. so you may be dealing with different types of claims here like taxes unpaid. i don't know. i wouldn't go it alone on it. unless they were small businesses where you didn't owe much. are you tax liabilities on them paid?

[keepmine]

If there are no assets in the corp. I'd list their debts on my personal bk since odds ae you gave some sort of personal guarantee. List anyone who could conceivably have a claim.

Then, research what your state requires to dissolve a business. It may be as simple as notifying your Sec. of State's office that the business is no longer active.

[dj007]

Those businesses made some money in the first couple of years and filed taxes back them. for the last couple of years the two c corps have just been dormant with no income and no assets. debt on both is about 30K. The llc was set up to handle a couple of rentals....I sold the rentals and llc was in business until about six months ago. and that income was always reported in my personal taxes. The llc owes only about 3K.

All this debt comes from credit acquired without personal guaranty. and varies from Home depot to lowes , gas cards and a couple of bank credit cards.

tobee43 how long apart did you file both the personal and biz chapter seven???

[tobee43]

i filed them at the same dj007, we only had to attend one 341 that way. it costs much less atty fees for us. you should have filed taxes to show the losses tho.

i would file them at the same time to be certain. remember with a S corp one can become personally responsible for the debt, but with a c corp, owners are not personally responsible for debts and liabilities incurred by the company. however, i would still list everyone and their mother's mother on your personal just to cover anything that can crawl into your life later. you need to file both, again separately. they are separate entities so it's less confusion for the courts. you may be able to list all the companies on one petition, that would be my question here. you may have to file more than 2. one for you and one for each company. lets see if bchoen, jb or ladyinthered, and others that can see this thread get some more input, hopefully.

[LadyInTheRed]

All this debt comes from credit acquired without personal guaranty.

List them on your personal BK anyway. There are ways for creditors to go after officers/shareholders/members for the debts of a corporation/LLC. Google "piercing the corporate veil"

I suggest you consult with several BK attorneys about your situation before going it alone. Most BK attorneys give free consultations.

[dj007]

So despite many suggestions to go and see an attorney, i took the plunge and filed chapter 7 Pro Se......
Already got my 341 meeting date.....i have been contemplating bk for about two years but could not afford an attorney....I just could not take it anymore and knowing that it would be a complicated case, honestly i just don't care anymore ........They can take everything !!!!!I just want my peace and freedom back!!!!!!

My question right now: I had a bunch of business debt as stated above, lets say the court finds that i should off file business chapter 7 instead, will my chapter 7 be denied/ dismissed thrown out???

- I heard many times debt to government institutions are not dischargeable , but i listed some back property taxes anyways, will that be reason for dismissal or i still can get discharged minus those debts???

-I still have an existing business where inventory comes and goes.....will have have to keep all record handy of all the transactions????..and if at my meeting lets say i have business profits accumulated of $10K , will i have to turn that money over to the trustee ( i sell cheap used cars and i have some broken parts cars which i listed as inventory with a value of $2K, but if between now and the 341 meeting i flip those cars around i could get some $ 8-10K) ????

[LadyInTheRed]

So despite many suggestions to go and see an attorney, i took the plunge and filed chapter 7 Pro Se......

I think you missed the point of the suggestions that you see an attorney (or at least my suggestion). It wasn't an alternative to filing pro se, it was to allow you to ask a qualified professional questions about your particular situation to help prepare you to file pro se. It would have been better to have answers to all of your questions before filing. Water under the bridge. Onward....

My question right now: I had a bunch of business debt as stated above, lets say the court finds that i should off file business chapter 7 instead, will my chapter 7 be denied/ dismissed thrown out???

I don't think the court will not insist you file a business chap 7, because it is of no advantage to the bk estate or the creditors to do so. If you claimed your debt was primarily business debt, it would potentially make a Chap 7 easier because you would not have to pass the means test.

- I heard many times debt to government institutions are not dischargeable , but i listed some back property taxes anyways, will that be reason for dismissal or i still can get discharged minus those debts???

Sometimes government debt is dischargeable. Read section 523 of the bankruptcy code for a description of what is not dischargeable: http://www.law.cornell.edu/uscode/text/11/523 In many (most?) states, property taxes become liens against the property and you are not personally liable to pay them anyway. You are supposed to list all of your debts, even if not dischargeable. The fact that one or more debts are not dischargeable does not effect your overall discharge.

- -I still have an existing business where inventory comes and goes.....will have have to keep all record handy of all the transactions????..and if at my meeting lets say i have business profits accumulated of $10K , will i have to turn that money over to the trustee ( i sell cheap used cars and i have some broken parts cars which i listed as inventory with a value of $2K, but if between now and the 341 meeting i flip those cars around i could get some $ 8-10K) ????

What is important is your assets on the date you filed. If your customers owed you money on the date you filed, those receivables were assets. If you listed cars as being worth $2K but can sell them for $8-10K, then you undervalued the cars. The trustee may object to your exemptions and the valuations. If he feels you intentionally undervalued assets, he could object to your entire discharged based on fraud. Be prepared to support your values and provide detailed information about your business. Section 541 defines what are assets of the estate: http://www.law.cornell.edu/uscode/text/11/541

- honestly i just don't care anymore ........They can take everything !!!!!

I'm glad you feel that way. Because, if you undervalued your assets, the trustee very well may take them.

[dj007]

"LadyInTheRed" Thanks again for such detailed and informative answers.

I tried to consult two local attorneys and both prices were out of my reach and both tried to get me in to it asap, not many questions were answered........and even tho i really needed to take care of this i felt like too much pushing.....

Those cars i bought them cheap for parts cars.....to get them on the road they need many parts and re title.

Again thanks for all the good answers and will keep posting progress as well as any other question .

[LadyInTheRed]

If you think you will sell the cars before discharge, I suggest you keep detailed records of the work and parts you put into them, just in case it comes up.