S corp owes me money

[howtoplan]

I own a failing S corp, however we do generate a profit during the next 5mos. Can I repay myself a portion of the 400K, I loaned the company, even if I'm not paying the bank?

[HHM]

That is too general a question to answer with any sort of certainty.

Is the bank a secured creditor; what sort of business are we talking about; what are your goals with business (keep operating, or wrapping up); are you going to be filign BK? etc etc.

[StartingOver08]

I read your post in the Ch 7 forum as well. You have some complications. The S-Corp is considered an asset of yours, even if it is losing money.

As you know, corp BK filings are very expensive and generally for small failing concerns are not worth the extra cost. Most people will elect to either close the S-corp before filing or after filing, but will include all the business debt with a PG on the personal Ch 7 filing.

I think if you were to suddenly take repayments from a loan that you previously made to the S Corp it may be considered a preferencial payment. I am assuming that you have not had regular repayment from the S Corp to you since the inception of the loan. If you have had regular repayment, that might be a different thing - but this is my opinion and not legal advise. Your attorney may be able to guide you. The two areas of concern are preferencial payment and insider payment. You would natually be an insider as you own the S Corp. The lookback period is one year. HOWEVER, in general the Trustee will want to see a longer record for you anyway. I had to provide 4 yrs tax returns, 10 yrs real estate transx (mtgs and purchases & sales), 2 yrs bank statments, cc statements etc.

Keep in mind, the trustee is looking for assets - they are looking to see if you moved non-exempt assets to exempted assets prior to filing.

I know that you will have to provide the bank statements both personal and corp for your filing of a personal Ch 7. So any transfers you make will be clearly visable. YOu may have to be looking at a longer filing horizen if you choose to pay yourself now. You may need to wait out the time from payment for at least 12 months - maybe even longer. But then, that is why you are here . To appropriately gauage the planning of your finiancials including whether filing BK is best for you at this time,