Legal Question in Bankruptcy in District of Columbia
Discharge of a corporate credit card
Can the amount on a corporate credit card be discharged via bankruptcy if unable to pay the balance. Would filing bankruptcy stop litigation against the holder
2 Answers from Attorneys
Re: Discharge of a corporate credit card
A corporation cannot obtain a Chapter 7 discharge. An individual responsible for the card can, and the discharge would cover liability on the card account (provided no exception to discharge, suc as fraud, would apply).
Re: Discharge of a corporate credit card
If there is a personal guarantee on the credit card, and that individual files a bankruptcy petition, then yes, it can be discharged. And yes, it would stop litigation against that person. A corporate bankruptcy would absolve the corporation of the liability, as well, but it would not make sense to file a corporate bankruptcy unless absolutely necessary.