Legal Question in Bankruptcy in California

Re: Closing s-corp with personal guarantee debt

Whether you have to file a personal bankruptcy depends on a number of factors, including whether you can afford to pay the personal obligations that you guaranteed. It is an option you should explore so you can make an informed decision.

Re: Closing s-corp with personal guarantee debt

If you file for bankruptcy and receive a discharge, that should eliminate the possibility that the corporation's creditors would come after you to enforce the personal guarantee. However, whether or not you SHOULD file for bankruptcy is a completely different story.

The decision to file for bankruptcy and which type of bankruptcy to file should only be made after a detailed review of your financial situation with a qualified attorney. Filing bankruptcy prematurely or filing the wrong chapter could have unintended consequences that are very dire.

Re: Closing s-corp with personal guarantee debt

As you personally guaranteed the debt, you are personally responsible to pay the debt out of your personal assets. If you do not have any assets and/or cannot satisfy the debt, you should consult a bankruptcy attorney for advice and be sure to give them all info relative to your finances.