Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
*Due to rules of your state bar or mine, nothing herein is intended as legal advice, only intended as general information to better help yourself.*
Unfortunately a chapter 11 bankruptcy does not include a codebtor stay. Therefore although a Chapter 11 bankruptcy could prevent the lender from taking action against the s-corp, you would not prevent the lender from taking action against the principals personally or foreclosing on their homes
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So a chapter 11 filing would do nothing for protecting my personal assets/home. Would negotiating with the lender for more favorable terms be something that is common? I believe with the housing downturn, our personal homes are not worth what they once were, therefore the personal gauranty on the properties come up short of total owed. Any other suggestions would be greatly appreciated.
You may want to consider filing a personal Chapter 11 in addition to the corporate Chapter 11. This could give you an opportunity to reorganize the debt