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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2832
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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My company, an S corporation, owns commercial real estate.

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My company, an S corporation, owns commercial real estate. To secure a personal loan from an individual I granted a trust deed on this real estate making the note holder a beneficiary. I am contemplating personal bankruptcy.
If I took bankruptcy before the sale of this commercial real estate what is the status of the beneficiary
if I were granted protection under the bankruptcy laws, very likely a chapter 7?

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

So, the beneficiary issue should not even come into play, since the S-corp owned the property and was conducting business.

Terry L. :

The value of the S-corp is the asset in your bankruptcy estate.

Terry L. :

So, if you received value for your deed, then there is no issue there.

Terry L. :

You indicated it was a personal loan though, the court may be interested in what you did with the proceeds, unless it was a loan to the business and not you.

Terry L. :

If the business has value, that is the asset in the chapter 7.

Terry L. :

The trustee can liquidate the asset, so if your business has value, that can be a problem with a personal chapter 7

Terry L. :

Then you may want to consider chapter 13, to pay back debts, enough to protect assets.

Terry L. :

There is much to sort out here if you are filing, so it would be advisable to meet with a local bankruptcy lawyer.

Terry L. :

Do you have questions?

Customer:

Your answer was quite sufficient to make my next move, talk further with my attorney.

Customer:

Thank you.

Terry L. and 2 other Bankruptcy Law Specialists are ready to help you