Legal Question in Bankruptcy in California

Re: Chapter 7 or 13.?

To file a chapter 7, as opposed to a 13, you will have to satisfy the means testing that was put into place by Congress. The corporation is a separate legal entity (if you have followed all the rules that go with corporate governance), and as such, it is not necessarily required to file with you, and can remain a separate, functioning operation. You will likely, however, encounter a problem with the value of your interest in the corporation if the corporation has any legal value. Any ownership interest you have in the corporation is very likely attachable by creditors, and therefore available to the Trustee in your bankruptcy proceeding to satisfy creditors. Consult with a local Bankruptcy Attorney to determine your eligibility.

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