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JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
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Experience:  Attorney in the practice of Bankruptcy Law since 1996
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I have a trucking company that is an S corp. I am close to

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I have a trucking company that is an S corp. I am close to closing the doors. My income has dropped so low that I can barely make payroll. The debt is about 350,000. The income is about 650.000 of which 80 percent goes to drivers. I personally guarnteed the loans. So do I need to file bankruptcy on the corp and personally? I have rental property that all have mortgages except for two. If you can give me some insight as to what to do, I would greatly appreciate it.
Submitted: 7 years ago via ExpertHub.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 7 years ago.
Hi taxlady:

I'm sorry to hear about your situation.

Of course you will need to see an attorney in your area since corporate bankruptcies can get very complicated, but my guess is you will need to file a personal bankruptcy to discharge your personal guarantees for the corporate debt. The corporation may or may not need to file bankruptcy, depending on whether the creditors will let the corporation dissolve and pay them whatever it can or if they start filing lawsuits.

You are only allowed to retain a certain amount of property in bankruptcy, so the rental properties will likely be taken by the court, sold, and the proceeds will go to creditors. You can see what property you are allowed to keep in a bankruptcy filed in Iowa by going HERE. Any amount still owed after the creditors are paid will likely be discharged and wiped out.

Good luck, and if I didn't answer your question or if you have any more questions, please let me know.
Joe

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) Joseph Ross. All rights reserved.



Either way, you will hopefully be out of debt and have a fresh start.
Customer: replied 7 years ago.
If a corporation files bankruptcy, does it have to go out of business?
Expert:  JoeLawyer replied 7 years ago.
Generally it does if it is filing Chapter 7. This is not to say you couldn't start a new corporatioin and continue operations though.

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) Joseph Ross. All rights reserved.

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