How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2815
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
Type Your Bankruptcy Law Question Here...
Terry L. is online now
A new question is answered every 9 seconds

I may have to file personal Chap 7 in a year or so. Also I

Resolved Question:

I may have to file personal Chap 7 in a year or so. Also I have S Corp where wife and I are only shareholders. Should I change the S to a C Corp now in order to better protect corp assets in the future?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
The nature of the corporation will not change the value of assets. The court will look at the value of your shares when you file the case. Now, unless there are expensive assets, in most cases, the value of the shares is nominal at best when it is a closely hold corporation. If there is value, then you may want to consider chapter 13, payback enough debt to protect the value. Unfortunately, if you sell/transfer shares, you have to disclose your interest in the biz for up to 6 years on the statement of intentions on the bankruptcy petition, so you wouldn't gain any advantage by doing that either. Talk to a local bankruptcy attorney to help you design the best case, with your allowable state exemptions to protect the assets you have.
Customer: replied 7 years ago.
I guess I really need to know if C corp assets offer any better protection than S corp in a personal Chap 7 where all stock is personally owned.
Expert:  Terry L. replied 7 years ago.
There is no difference. in the chapter 7, you have to disclose the ownership interest in the stock. The stock's value would be the same if it is S-corp or C-corp.
Terry L. and 2 other Bankruptcy Law Specialists are ready to help you