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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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The economic crash of 2008 effected my business (S corp) and

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The economic crash of 2008 effected my business (S corp) and I have only managed to stay afloat by loaning the company nearly $300K out of my own savings. At this point it does not look like it's going to survive so that $300K is gone... I still have $100K in my savings but also a lease with a personal guarantee for another 20 months @ $20K /month.

Is there a way for me to file bankruptcy and keep my last $100K in the savings?

Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 4 years ago.

Hi JACustomer,

1) Are you asking about a Bankrutpcy for yourself personally or for your business?

2) Do you own a home? If so, how much equity does the home have? (Equity = current market value minus the balance of the mortgage.)


Customer: replied 4 years ago.

I do not own a home. I assumed that I would have to dissolve the S corp and file personal bankruptcy. I have no credit card or other debt. The only issue is the personal guarantee that I have on the lease for the business.
Expert:  cfortunato replied 4 years ago.

A Bankruptcy filer is allowed to keep up to $23,250 in cash or from $75,000 - $175,000 equity in the home they live in (because of the homestead exemption).

You cannot protect the entire $100K if you keep the money in the bank, but you are allowed to convert that non-exempt asset into an exempt asset by purchasing a home.

That is the only way to protect that asset if you file a Bankruptcy.


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

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