starting new corporation before filing personal BK and slowly dissolving current bus.

[staylor]

If I own a Carpet cleaning business and have debts to high to manage with personal guarantees on loans. Can I start a new corporation under different name, then file a personal BK and slowly dissolve the old corporation to get rid of all my debt?

It seems if it is a new LLC or S corp they couldn't attach the old business to it. Just as if I own 5 bussiness under different corp names. They couldn't go after all for the failure of one of them.... correct?

[justbroke]

If you're creating a new corporation solely to hinder, delay or defraud creditors... then no. The "new" corporation would have to buy the assets of the old corporation as you couldn't just "transfer" them. Be careful when it comes to closely held corporations (LLC's and S-Corps). Since they are closely held, it is sometimes easier for a creditor to pierce the corporate veil.

This is where a great attorney who specializes in business-owner bankruptcies is important. How you dissolve Corporation A will be important, especially if you intend to use Corporation A's assets in Corporation B. The problem with a business that has debt is that the debt is never discharged. I know that people play this shell game all the time, and the debts may be so low that it's of inconsequential value to chase Corporation B. However, since you're filing bankruptcy, you may as well do it cleanly.

[staylor]

The new corporation would be formed to get on with life because the current corp is not working. It would be in a different town and using none of the old assets. Since I haven't filed Personal BK yet because of the personal guarantor, I could still get money to start the new corporation. When you say "closely held" does that mean of the same profession?

Thanks Again