Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
I will be happy to assist you. As your stock in the S corporation is part of your assets, it would be included in your personal bankruptcy; If your ownersip interest has any market value it could be sold to pay your debts. You must list the ownership of the stock on Schedule B, however, the value of that stock is dependent on the value of the business.
Also, any other assets you own outright could be attached and sold to pay this secured creditor minus the exemptions for California. California has two options for using exemptions, and does not allow residents to use the Federal Exemptions.
You have to submit a Statment of Affairs with your filing. This is financial report showing assets and liabilities at expected liquidation values and stockholders' equity. If they did not believe your report they would investigate further, if you were proven to be providing false information they could dismiss your bankruptcy or worse perjury charges.
You should definitely see a bankruptcy attorney. It is illegal to move assets in preparation for bankruptcy, but there may be other scenarios or exemptions that they would be aware of.
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