Question What Happens To My "s" Corp, Llc Before And After Chaper7??

[mustang]

Please help me,

I am filing Chapter7, a personal bankrupcy.
I also have a "S" Corp, LLC attaching to my name.

The "S" Corp, LLC is worthless, has no assets and 100% is mine.
The "S' Corp has also many judgement and debts.

How do I get rid of "S" Corp?

What should I do before and after my Chapter7 bankrupt to get rid of the "S" Corp, LLC?

What differences between: personal bankruptcy, consumer bankruptcy and business bankruptcy?

Thank you very much!

Mustang

[HHM]

Nothing really happens to your LLC vis-a-vis your personal BK.

How does your S-Corp filing taxes, 1120-S, 1065 or 1040 w/ Schedule C?

[mustang]

Thanks for your response to my post.

In the past my CPA filed tax using 1120-S.
Please give me your further thoughts of yours.

Thanks again.

Mustang

[HHM]

Well, if the S-Corp has no assets and only debt, it is not a factor in your Bk.

You would list it as an asset but with a zero value. You will probably have to provide some additional information to the trustee so he can evaluate the situation, but otherwise no big deal.

To be on the safe side, you probably want to list ALL corp. debtors in your BK to assure discharge of the debt as to you personally.

What was the purpose of this S-corp?

[mustang]

Thank you, HHM, for your response.

The "S" corp, that the shareholder report income and loss on
their own individual incom tax returns level, tax are paid as
individual tax level.

I created the "S" corp as a corporation to buy a business
in which I am the owner 100% of "S" corp shareholder.

My question is...besides the personal bankruptcy
Chapter 7, what else should I do to discharge the
debts and judgement against "S" Corporation under my name.

When filing Chaper7, "S" Corp 's debts and judgments are discharged, too?

I do not intent to use this "S" corp any more.
There is no assets, but debts and judgements. In the future
if I want to do business will create a new corporation and take
a different name.



Please give me you thoughts.

[HHM]

I just wanted to make sure of the filing status (sounds like you do 1120-S with a K-1)...since the corp. structure is an LLC, and I presume a single member LLC, the IRS may treat it as a sole-prop, but it sounds like you properly did your S-Corp election, so no problem there.

The S-Corp sounds like it is a dead duck simply floating in the water. Thus, your only concern is to ensure that you discharge any personal liability for corporate debt, thus, you need to list all corp. creditors in your BK. (However, you want to list the debt as disputed, so you do not needlessly admit to personal liability).

The S-Corp debts will perpetually exist against the S-Corp until the statute of limitations expire or the S-Corp files BK (but there is no reason for the S-Corp to do so since it has no assets), but assuming your personal BK receives a discharge, any debt that can be discharged as to you personally, will be discharged.

The only possible future head ache is that if you start a new business and that business does the same thing as this old LLC, the creditors could argue "alter ego" and attach their debt to the new business.