Legal Question in Bankruptcy in Florida

Corporation assets after Chapter 7 is discharged

when an individual files for chapter 7 and they happen to be the sole shareholder and that entity owns vehicles as an example, but the individual is owed shareholder loans what are the rights of the individual/trustee in this example?

The trustee takes ''ownership'' of the shares of stock and can decide whether to sell the shares. The trustee can also decide whether to sell the vehicles to pay off the loans, then use the payoff money to pay the debts of the person filing chapter 7, if the trustee decides that's best. In essence, the trustee decides what to do.

so what happens when the 7 is actually discharged from a tax perspective for the corporation? The entity is not filing it is the individual, so does the entity revert back to the individual and does the individual continue to file corporate tax returns and continue the pass thru etc.


Asked on 11/12/08, 10:03 am

1 Answer from Attorneys
Brent Rose The Orsini & Rose Law Firm

Re: Corporation assets after Chapter 7 is discharged

If the trustee does nothing with the shares, the shares revert to the original owner, who has full rights and responsibilities, just as though the bankruptcy were never filed.

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Answered on 11/12/08, 11:28 pm


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