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Can we file bankruptcy on an S corp.?
Anonymous9 views3 answers
We had a business, it went under in 10 months. Its an S corporation. Its been 2 years since we've done any business. The financer is now requesting payment from the loans and rent...Thousands of dollars....we cant afford. We live paycheck to paycheck. If we file bankruptcy, will that get us out of this debt. We signed leases and contracts.
You can file for the S corp but there is rarely any need to. More than likely you are looking at having to file a personal bankruptcy to discharge any of the personal guarantees that you signed for the corporate debts. You need to talk with a bankruptcy attorney.
Corporations are not entitled to discharge, so unless there are assets to liquidate bankruptcy is unnecessary. If you guaranteed the corporation's debt, they you may need to file a personal bankruptcy. If not, you are under no personal obligation to pay the corporation's debt. There may be some personal liability for unpaid corporation taxes however.
I agree with both answers. Typically not necessary to file on an S Corp that is no longer in business. Make sure you've disolved the Corp properly. Only need to consider filing Bankruptcy if you personally guaranteed any of the loans and leases. You should speak with a bankruptcy attorney in your area to determine whether or not it is in your best interest to file.
