QUESTION
Can a California S Corporation File for Bankruptcy to clear debts and still continue to do business?
Asked on Mar 16th, 2015 on Bankruptcy - California
More details to this question:
We want to file Bankruptcy but we do not want to lose our domain names as they are #1 ranked sites and still bring in good revenues. We simply got spend happy and took on too much debt. We know we can get out of this but want to make sure we are left alone or clear the debt through BK and continue to remain in business. If we file chapter 7 will we have to give up our domain names?
2 ANSWERS
Bankruptcy Attorney serving Menlo Park, CA
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Law Offices of Stephen Benda
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After bankruptcy the corporation considered defunct. However you can still buy or transfer your domain names to a new entity. If you file Chapter 7, all the assets, including the domain names belong to the trustee, and you would have make arrangements with the trustee.
Answered on Mar 16th, 2015 at 12:53 PM
Bankruptcy Attorney serving Burbank, CA
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Law Office of Mark J. Markus
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Corporations do not receive discharges of debts in a Chapter 7 case.
Moreover, you cannot continue operating a business in a Chapter 7.
And yes, you would risk losing your domain names and any other assets the corporation has in a Chapter 7 case if someone bids on them and the Trustee decides to sell them.
If you want to deal with your debts in bankruptcy, it would need to be a Chapter 11 case.
Please see my page on business bankruptcy information for more details.
Mark Markus has been practicing exclusively bankruptcy law in California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by martindale.com, and A+ rated by the Better Business Bureau. CONTACT MARK for more information or to schedule an appointment.
Answered on Mar 16th, 2015 at 12:21 PM