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Old 06-03-2011, 02:19 PM
calicorp calicorp is offline
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Join Date: Jun 2011
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Default Corp vs. Personal BR

Hi, I have an S corp in California; I am the sole stockholder, and pay myself less than minimum wage. There were two main bank creditors of about $50k each, which were in my personal (not corp) name. In summer of 2010 I filed for a personal bankruptcy, using an attorney, which received its discharge last month (May 2011). I also sold my car (use a bicycle), sleep in the office, and got 3 sub-lease people to help pay the rent. If I were to have been paying myself a reasonable amount, there would be no money in the corp account at all; and if I started paying myself now, the corp account would be gone in a month or two. The bankruptcy idea was that since I funded the corp using my two personal bank credit sources, a personal bankruptcy would elimiate the debt so I could afterwards close the corp and re-form the business in my personal name. However, one of the creditors has a UCC that says they own everything in the corp, which is about $2,500 in furniture and old computers. So now my attorney says they may be able to sue or obtain the corp money (about $35k) that has been put into the bank since then. Our sales have just about stopped, so the $35k is needed to just keep the office open. Question: What options do you see? Thanks, Tim
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Old 08-03-2011, 04:34 AM
Fredy Atwater Fredy Atwater is offline
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Join Date: Aug 2011
Posts: 516
Exclamation Re: Corp vs. Personal BR

Hi Tim :

I admire your desire to own your corporation at any cost. It sounds like your'e isolated and without money.

Why are you doing this to yourself ?

You've got to survive first . Do whatever it takes. Don't beat your self down. You can handle complexity. Maybe you need to simplify your business.

Organize yourself . If you have to declare bankruptcy it will not be the end of you. Once you start making income your credit score will bounce back. Don't let fear mug you. I admire your desire to be a corporate man.

Move on Timmy
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Old 08-03-2011, 11:42 AM
calicorp calicorp is offline
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Join Date: Jun 2011
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Default Re: Corp vs. Personal BR

Well what we've done since then is to start paying me a salary, and start making payments to the one creditor that had a UCC. This will deplete the corp bank account by the end of the year. Also, I'll be buying back the desks, computers, etc, from the corp to me personally. And I already pay the rent and utilities personally. Then my corp attorney will dissolve the corp, and I'll just continue on personally.
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