Legal Question in Bankruptcy in California

Business Bankrupcy

I am the only shareholder of a california corporation. The company has struggled, so i took out a home equity line of credit on my home to put into the company to pay operating expenses. We are now considering bankrupcy for the business. The question is can the business bankrupcy eliminate the line of credit secured by my home since all of the money went into the company.


Asked on 10/03/08, 6:53 pm

1 Answer from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

Re: Business Bankrupcy

Corporations do not receive a discharge in Chapter 7. Also, an individual cannot use Chapter 7 to remove a voluntary lien from their house. If your house is worth less than the balance on your first mortgage, you MIGHT be eligible to remove the lien from your home in a Chapter 13 bankruptcy. For more information, contact the National Association of Consumer Bankruptcy Attorneys to search for an experienced attorney in your area.

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Answered on 10/03/08, 7:06 pm


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