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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17080
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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I want to file Chapter 7 personally but I dont want to disturb

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I want to file Chapter 7 personally but I don't want to disturb my sub Chapter S Corporation. Is this possible?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 7 years ago.
YOUR CHAPTER 7 WILL ONLY BE APPLICABLE TO PERSONAL DEBTS, HOWEVER YOU WILL HAVE TO DISCLOSE OWNERSHIP IN A BUSINESS THE CORP MAY QUALIFY AND THE COURT MAY WANT TO SEE IF YOU ARE HIDING PERSONAL ASSETS IN THEIR TO DEFRAUD THE CREDITORS, HOWEVER IF THEIR IS NO ISSUE TO THAT IT SHOULD BE FINE,

the S-Corp designation is meaningless in the Bankruptcy Context...structurally, a corporation is a corporation and is organized under "state law". The S-Corp and C-Corp designations are IRS designation that determine the tax status of the corporation. In an S-Corp, if you meet the criteria, the corporation does not pay Corporate income tax, instead the profits are distributed to shareholders who pay tax on the profits at their individual tax rates. Whereas, a C-Corp pays federal corporate income tax on corporate profits and the shareholders will pay personal income tax on their share of the profits at their applicable individual tax rate (or the dividend tax rate).
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