We Own A Subchapter S Corporation In Fl. If The Corp Is Forced To File Bankruptcy, How Will That Affect Us Personally?

[Omar]

Also, we have utilized personal credit cards to hold the company going up to now. Would these be regarded as part of the corporation debt when filing?

[Stanton]

You've been careless and may pay for it... Generally, only debts taken on by the corporation would be considered in bankruptcy proceedings.  So the fact that you used your credit cards to pay for the expenses of the coporation will not result in any debt relief to you personally.  Moreover, in your situation, the corporation's creditors can make a very strong case for "pucturing the corporate veil"(the legal term for going after you for the corporation's debts).  By using personal credit cards to pay business expenses, you have commingled business and personal expenses, which will basically show the bankruptcy judge that you have not treated the corporation as a separate legal entity as you were supposed to, so the judge may rule that your personal assets are fair game for the corporation's creditors... NC 63 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Geary]

Generally, only debts taken on by the corporation would be considered in bankruptcy proceedings.  So the fact that you used your credit cards to pay for the expenses of the coporation will not result in any debt relief to you personally.  Moreover, in your situation, the corporation's creditors can make a very strong case for "pucturing the corporate veil"(the legal term for going after you for the corporation's debts).  By using personal credit cards to pay business expenses, you have commingled business and personal expenses, which will basically show the bankruptcy judge that you have not treated the corporation as a separate legal entity as you were supposed to, so the judge may rule that your personal assets are fair game for the corporation's creditors...