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Can I Just Walk Away From My S Corp Debt? – Christinia

i have about 17,000 of company debt. i’ve closed down my s corp company as of september 2011 but my company accumulated credit card debt under the company name that is now assumed under my name.

is there any way I can just call my debt a loss and not have it impact my credit personally? i understand to a degree company entities are completely separate from personal ones. i need more information on how this works. thanks.

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Can I Just Walk Away From My S Corp Debt? - Christinia by

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  • http://www.businesscreditsuccess.com/ Erik Salmon

     Christina,

    Trying
    to just walk away from this much debt is a bad idea for many reasons. Debt
    collectors who collect business debts are not covered by the federal Fair Debt
    Collection Practices Act and, therefore, their collection tactics may be a lot
    more aggressive than those of other debt collectors. In addition, there’s a good
    chance you agreed to personal liability for some – if not all – of these debts.
    That means you could be sued. Even if you do manage to work something out and
    settle them, you may be on the hook for taxes due to cancelled debt. (That could
    also be true if you simply don’t pay. A tax advisor can give you more
    details.)Consult a bankruptcy attorney as soon as possible to decide how
    to handle this. You may have to file corporate and/or personal bankruptcy to put
    this behind you, but it may be worth it when you compare it to the alternative
    of dealing with debt collectors and possible lawsuits for years to come.

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