Bankruptcy in Brief

Separating the shareholders from the business

An essential exercise for the officers, directors and shareholders of a struggling business is to understand just who is legally liable for each debt.

Examine each business bill or agreement and enter it in one of these columns:

By doing so, you will get a handle on who is exposed if the bill isn't paid:  the corporation or the individuals or both. The discharge of one entity won't eliminate the liability of any other entity.

A debtor whose debt is primarily business and/or tax debt is not subject to the means test

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