Legal Question in Bankruptcy in California

Can an irrevocable business trust go bankrupt? The only asset this trust has is a bank account with a few thousand dollars in it, and the liability is an out of state judgment against the trust for about 7 times what's actually in the bank account.


Asked on 4/04/13, 8:36 pm

1 Answer from Attorneys
Scott Jordan Jordan Law Office

It can file bankruptcy but it will not obtain a discharge. Only individuals can obtain a discharge and a trust is not an individual. There should be mechanisms in the trust to terminate. You can terminate the trust and if any money is available, the money can be used to pay off creditor's proportionately.

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Answered on 4/05/13, 9:24 am


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