Can you bankrupt your own corporation to get out of a bad debt?

I've asked this question before as I'm going through hell with the phone company and some BAD yellow page advertising debt that is now over $10,000. So far they have just been hounding me with a collection agency. As this account is strictly in the name of my business corporation, my credit has not been harmed ... yet.

I have a case against the phone company for errors they made and even changing my phone number. However, their high priced attorneys might try to beat me in court so I'm just wondering if there is any other way out of this mess? Please don't say contact an attorney. I know I can do that, and will have to soon! I'm looking for advice based on experience here. Anything. Thanks!

You can file for bankruptcy, but your debt needs to exceed your assets and ability to repay.

Normally yellow page advertising is tied to the phone number so it may also require you to get rid of the phone number the ad is attached to (see your billing). Also check the contract and make sure that you did not sign a guarantee otherwise YOU are on the hook.

Normally they will have you sign off on a proff before publishing. If you signed the proof, you are in trouble also.

Bottom line, bankruptcy for a $10,000 debt may be much more hassle and expense than dealing with the problem head on.

you can bankrupt your business without hurting your credit. I suggest you do it before it makes it was to your personal finances

Your lawyer can state bankruptcy and there is no way they can collect from you when thee is no money left and your Corporation has folded up.

By changing your phone number, you pretty much negated any use the yellow page advertising would have been. They will use that argument.

If you bankrupt your corporation, they will go after your assets. This will include anything used in the business (including computers, vehicles, furniture). If you have employees, they will lose out.

You do need an attorney for better advice.

The problem with any of us here offering advice, even if one of us happens to be an attorney, is that your situation is very complex and if your were to sit down with someone and tell enough of the story so that competent advice could be given, it would take hours for you to do it, in addition to the need to produce applicable documents to 'see' what's been happening to you also. This isn't what you want to hear, but I believe it to be quite accurate. Business troubles like the one you have are tough - and there are no easy answers, even (at times) for an attorney.

Are you referring to a chapter 7 or 11 bankruptcy. Chapter 7 is a straight liquidation where everything is sold to satisfy all creditors proportionately. Chapter 11 is just a reorganization of your debts which could result in a reduction to the amount owed or an extension of the time to repay.

Assuming ch. 7, the short answer is, yes, you can discharge this liability in a bankruptcy. Assuming ch. 11, could go either way. You may be able to reduce the amount or you may have to pay the entire balance. Kind of depends on the circumstances.

It hardly seems worth bankrupting your company for $10,000. There are other considerations. 1) do you plan to continue the business post-bankruptcy? 2) if you keep the business, do you plan to have telephone service or use the yellow pages advertising in the future? If you do, they may require you to pay the past bill before reconnecting service and restarting the ad. 3) you may be able to negotiate with them, especially if there is a dispute, and have the debt reduced to something more reasonable. Hope this helps.

Based soley on what you have stated, I can't think of any reason why I would recommend bankruptcy for your business.

If you are an incorporated business and have been operating as one (all your paperwork is good and your "corporate veil can't be pierced", then you are probably safe from incurring any personal liability.

If your reasons for not paying the bills are legitimate and well grounded, then fight the fight. Don't kill your business which may otherwise be going great.

If you were thinking about getting out of your business, then do so legitimately. Don't bankrupt your business to cancel debt. Once your business is terminated (and assuming, again that you are an incorporated business), the debtors will be left with little recourse for recouping their money and none against you personally. If your business is not a corporation but a sole proprietorship, bankrupting your business is not going to be of much help to you since you would be personally liable for the debts of the business in general.