S-Corp 50k credit card debt wants to file for bankruptcy. Will we be responsible to pay the credit card debt and does this affect our personal credit
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S-Corp 50k credit card debt wants to file for bankruptcy. Will we be responsible to pay the credit card debt and does this affect our personal credit
My business partner and I have an S-Corp (real estate appraisal company) and business is basically no longer and we have $50,000 in business credit card debt. We have been holdiing on for about 2 years hoping things will get better but its only getting worse. We have no assets and no future clients. If we file for bankruptcy are we responsible for this credit card debt and will this affect are personal credit? Also if we start a new company in the future will this come back to bite us?
Asked on June 23, 2009 under Bankruptcy Law, California
Answers:
J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
I am a lawyer in CT and practice in this area. The issue is whether or not you personally guaranteed the credit cards. If you did not personally guarantee the cards, then the creditors cannot come after you as corporations have separate legal capacity. if you did sign, then the creditors can sue you and your credit will be affected. If you were not personally on the cards, then you can start up a new corp without worrying about this.
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