Re: Personal Bankruptcy of S corp officer

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Off the top of my head. One thing you don't do in any corporation is
cross funds, corporate, with personal. Could be a Fedral problem if it
happens.

On 8/24/05, Curmudgeon wrote:
> The mere fact that a stockholder of an S corporation filed
> bankruptcy will not endanger the corporation or the other
> stockholder. However, in most such small business, if you read
> the fine-print on all the documents, you may find that there were
> personal guarantees of corporate debts and cross-
> collateralization. At best, you're looking at a headache.
>
> On 8/24/05, 00 wrote:
>> Sorry, it sounded like a homework question. We get them from
>> time to time.
>>
>> On 8/24/05, E Ryan wrote:
>>> Homework????? It is a construction business.
>>>
>>> Or do you mean is this a homework question? No it is my
>>> husband and I am concerned he(we) will pay for his partner's
>>> debt. The partner takes weekly draws in addition to a salary
>>> and cannot make it through the week without borrowing more.
>>>
>>> On 8/24/05, 00 wrote:
>>>> Homework?
>>>>
>>>> On 8/24/05, E ryan wrote:
>>>>> The s corp has two officers each own 50&37; of the stock.
>>>> One
>>>>> officer has excessive personal debt not related to the
>>>>> business. If this officer files for personal bankruptcy
>>>> or
>>>>> creditors begin to take collection action is the S corp
>>>>> cash in danger. For example if there is $60,000 in cash
>>>> in
>>>>> the S corp bank account (both officers can write checks)
>>>>> would any, all of this money be required to pay off
>>>>> personal debts of the one officer?