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cfortunato
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Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Hello, As an S-corp in California, if I had to file for

Customer Question

Hello,

As an S-corp in California, if I had to file for business and personal BK, can I still run my company? Am I able to hold on to my company name and some of my company assets so to keep it going after BK? I am not sure if there was a specific amount that might be exempt.

Thanks,

Mike
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 3 years ago.

Hi JACustomer,

There are 2 types of business Bankruptcy - reorganization and liquidation. If you want to continue running the business, you would want to file the reorganization. With a reorganization, your creditors have to agree to a accept less than what is owed, and this amount is paid to them over a period of time (usually less than one year).

With a reorganization, you would be able to keep your company name and assets.

 

I think this is what you wanted to know. If not, please let me know.
Thank you!

Customer: replied 3 years ago.
Thank you for explaining that. How is the reduced debt calculated? Does the court decide how much it needs to be reduced?

Is bankruptcy still an option even after a reorganization?
Expert:  cfortunato replied 3 years ago.

With a re-organization, you would make a proposal of an amount that you are willing and able to pay your creditors. The creditors - not the Bankruptcy court - are the ones who have to accept the proposed amount.

Whether and how much they will accept will very much depend on the total market value of the S-Corp's assets, because this is the amount they can get if there is no agreement.

Customer: replied 3 years ago.
Thanks for your time. Final question.

I have being taking from Peter to my Paul to stay on top of these bills and my credit llines are maxed. They seem to not want to work with me on lowering interest rates, settling down, etc., as long as I am current. Experiencing right now that pressure is coming from all angles to pay these bills and many others, it is begining to affect all my business bills, because I have to ensure paying myself so that my personal bills and mortgage are priority.

Should I consider stop paying on these higher interest business credit cards and loan bills to get there attention? Maybe then they would reconsider before reorganizing. Everyday its looking more and more that this direction will be my fate.

Lastly, what should I expect the costs to be to reorganize?

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