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Emeritus23, Attorney
Category: Bankruptcy Law
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My husbands C-Corporation is filing bankruptcy,

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My husband''s C-Corporation is filing bankruptcy, we are being advised that because my husband(the president of the corporation) has signed so many personal guarantees, he should also file personal bankruptcy--even though his personal credit is in excelent condition. Is this good advice? I thought a corporation was seperate from an individual.

His personal credit may still be good because the corporation has not yet defaulted on these debts he has personally guaranteed.

The way this works is that, although he is not liable, as an owner of the corporation, for the debts of the corporation, he is jointly liable with the corporation for those debts he has personally guaranteed. If the corporation seeks bankruptcy protection from these creditors, they will look to him individually for payment.

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