Legal Question in Credit and Debt Law in California

How the heck can I, or any lawyer, advise you on whether or not to file BK based on such limited information. You could well be a candidate for a Chapter 13. But I won't help you defraud the bankruptcy court or anybody else, which is what it sounds like you are proposing when you say "run the company under my wife's name." The feds won't be amused, nor fooled that easily.

Bankruptcy may be the best way to go. Ch. 7 or 13, in large part, would depend on your income.

My colleague's comment about defrauding the Court stems from your comment about running the business under another's name. When you're in bankruptcy, you must fully disclose each and every asset you own or have an interest in. If you transfer title to property, accounts, business interests, etc. prior to bankruptcy - they will find out about it. And then you will lose all credibility in addition to legal consequences including fines, losing your assets - even criminal penalties.

The absolute best thing to do is disclose everything - it may be that the Trustee abandons all assets and you can get permisson to keep the ecommerce site. That is a far better way to go than to have your bankruptcy dismissed...

This answer is provided for informational purposes only. Actual legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction, with experience in the area of law in which your concern lies.

From what you describe, you sound like a classic case for bankruptcy of both the s-corp and you personally. It also SOUNDS like you don't need to play any games that could land you in more litigation, risk your discharge in bankruptcy, and possibly make you a "guest" of the feds. A properly structured bankruptcy plan that leaves the profitable business intact and in your hands, with payments to creditors on balances that have been drastically cut by the bankruptcy court so that they are affordable by the business and you, is exactly the kind of thing that reorganization bankruptcies are for. Obviously I can't advise you whether this would work in your case, since I know almost nothing about it, not even wether the few facts you give are accurate. But you definitely describe a situation that should be discussed with a good bankruptcy lawyer.