Legal Question in Bankruptcy in California

Corporations do not receive a discharge in bankruptcy. A bankruptcy for a corporation is like an expensive funeral. The bankruptcy has the effect of liquidating and dissolving the corporation, but does not discharge any debts. The corporation ceases to exist, and therefore creditors (unless they have grounds to do otherwise) are left with nobody to sue or pursue for unpaid debts.

The problem is, however, that EDD is particularly nasty, and they are going to take the position that you owe the penalties personally if the corporation does not pay them. I cannot find the authority for this without doing some research, but I can tell you that a corporate bankruptcy is not going to get you off the hook. I would suggest that you buy some time to meet with an attorney who has specific experience with corporate bankruptcies, and see if there is even a need to file on your part.

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