Personal Bk and Business BK

[Dst1]

When I started my business I was given some rather bad advice (or so it seems in hindsight) and rather than running it as a sole prop I incorporated. [In my state a single individual can incorporate.] The reality is, however, that I essentially operate as a sole prop anyway only now I have the headache of filing seperate tax returns and other fees and paperwork involved in running the corp. Worse, if I do find in the future that BK is the route that I must go, there is the additional headache of filing not one but two BKs.

I do know that it is possible in my state to dissolve the corporation and go back to running strictly as a sole prop. But that is a lengthy headache too. But maybe I'm better off in the long run by doing so. I don't know.

I'm just curious if anyone has any insight on this situation.

[uptomyears]

I got the same thing. Don't know what to do. Are you an S Corp? I just closed the doors on my business. After my taxes are filed, I am resolving to dissolve the corp. and do just that. I'm in PA where are you?

[Dst1]

I got the same thing. Don't know what to do. Are you an S Corp? I just closed the doors on my business. After my taxes are filed, I am resolving to dissolve the corp. and do just that. I'm in PA where are you?

No, I just have a plain old Inc. I'm in NM. One issue that complicates my decision is that I'm an on-going concern and all my business credit is in the name on the business (some with PG). I've been told by a reputable source that I can switch to a sole prop without redoing the loans, but I'm worried. Especially in todays climate it seems like they will do anything to get out. And I don't really want to put that debt on my personal cards and shoot my utility all to hell.

[HHM]

You are far better off simply dissolving the business under your state's rules. It really isn't that big of headache, it usually requires some sort of notice be sent to your creditors, waiting a period of time, and then filing the Articles of Dissolution with the secretary of state.

For these types of small, incorporated businesses, there is usually no legal or practical need to actually file a "business" BK.

[myid4u2c]

I find this subject to be very interesting. However there is not enough information for me to know if I was in a similar situation.

First, we had a small business with about 650K in revenue per year, the company went broke, we were able to sell off most of the assets and pay all the secured creditors. The unsecured creditors were left holding in excess of 300K, most had PG’s back to one or more of the share holders. We each filed C7 and the debt was discharged. The business never filed, we also have not dissolved the corporation. While our state (GA) has a procedure for dissolving the corporation I have been advised to simply stop paying the annual renewal fee and at some point in the future the corporation we be dissolved by the state.

Over a year later not one creditor has even contacted us regarding the debt. The corporation has nothing and it would not be worth their time. You do however need to be completely ethical in how you distribute any funds as if a creditor finds out you made payments to an insider the can do a involuntary BK on the company and it will open up a can of worms.

My attorney told me that the debt of a business debt is never discharged. The case is just closed. I basically said filing on my corporation did not make sense. I hope this helps.

[HHM]

That is pretty much text book how do deal with a fialed business.