How does BK work for a C Corp. What is the process to follow. Please advice.
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C Corp BK - How does it work?
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I am afraid that is too open ended a question.
The first question is, does the corporation actually have to file BK (most don't, you simply shut the doors, sell the assets, pay creditors from the sale, and file articles of dissolution with your secretary of state). Realize, when a business files chapter 7, the business is gone. It's not like a personal BK where the person continues on with their life after BK. When a corporation files BK, that kills the business.
However, the how and if of filing BK will depend on the size and complexity of the organization.
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Originally posted by HHM View PostI am afraid that is too open ended a question.
The first question is, does the corporation actually have to file BK (most don't, you simply shut the doors, sell the assets, pay creditors from the sale, and file articles of dissolution with your secretary of state). Realize, when a business files chapter 7, the business is gone. It's not like a personal BK where the person continues on with their life after BK. When a corporation files BK, that kills the business.
However, the how and if of filing BK will depend on the size and complexity of the organization.
I don't have any employees remaining now. Just me and the spouse. We have also put a lot of our own money and credit card debt to make it survive. The business has no chance of improving with our clients cutting down drastically. This economic downturn has hit us real hard. I have been paying all installments till today. Don't know if I can make the next installments.
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Why don't you file a personal Ch 7 - that will get rid of any personal guarantees you have made for the corp debt. You could just liquidate the remaining assets before you file (if you have any now) and just close the corporation if the business is not producing.
Look here: http://www.moranlaw.net/corporate7.htm and here http://www.moranlaw.net/struggling.htmFiled CH 7 9/30/2008
Discharged Jan 5, 2009! Closed Jan 18, 2009
I am not an attorney. None of my advice is legal advice in any way..
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Originally posted by StartingOver08 View PostWhy don't you file a personal Ch 7 - that will get rid of any personal guarantees you have made for the corp debt. You could just liquidate the remaining assets before you file (if you have any now) and just close the corporation if the business is not producing.
Look here: http://www.moranlaw.net/corporate7.htm and here http://www.moranlaw.net/struggling.htmOriginally posted by HHM View PostGenerally, when a small business fail, the owner will file a personal chapter 7 BK and discharge all personal debt and all debt with personal guarantees (which is pretty much all the debt of the business). The business simply dies.
Would corp BK help in anyway on my personal BK, when I show that the majority of debts are business related? Without Corp BK, wouldn't it look as if we have spend a ton of money on ourselves?
Corp debts have been spread over a few years. What would they look for in the corp related debts? Would we need to get them all bills, etc to show for that debt?Last edited by SMad; 05-08-2009, 01:50 PM.
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I had an S-Corp and not a C-Corp. When I filed, I filed a personal Ch 7 and the S-Corp was listed as an alias name right under my personal name. This was all advised by my attorney.
All my debt, personal and business was included in the bk.
All my documentation, personal and business was supplied to the attorney and subsequently to the Trustee.
I let the S-Corp die because the creditors can get a judgment against the corp for the debt owed and sieze any assets the corp has to satisfy the judgment. The corp has no assets. I closed the corp checking accts. Now operating as a sole prop.
Ask your attorney about something similar. Read those links I provided to you. You need an experienced BK attorney that knows about small business' too. Not all of the attorney's have that kind of experience. According to my attorney, if I had filed a corp BK it would run over $10,000 in fees instead of the $2700 total I paid including filing fees etc.Filed CH 7 9/30/2008
Discharged Jan 5, 2009! Closed Jan 18, 2009
I am not an attorney. None of my advice is legal advice in any way..
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^^Thanks. Will try to find an attorney that works on this.
What business documents would I need to supply the attorney? Would bank accounts, loan documents be enough or would I have to go through the financial/Tax documents for all the previous years?
Will the Corp Debtor (Bank) ask for a judgement even if the corp has pretty much no assets? What would they look for in a Judgement like this? Would that delay things if they go for that and find nothing.
The economy put us in this situation. If not for business debt, we would have surely made it out and payed the personal debt. So much for being an entrepreneur.
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