Recently, a well-dressed, well-spoken person came to my office to discuss filing for bankruptcy. A quick review of claims by creditors revealed several lawsuits and an assortment of credit card debt. There were two mortgages and two car loans. Even though both husband and wife were working, the total monthly income was barely enough to cover the monthly expense. The house and the cars had no equity in them, the bank accounts were empty, retirement funds were dry. No assets and little income and total unsecured debt of about $150,000. It would seem to be an easy Chapter 7 bankruptcy case, right?Wrong.
This individual was self-employed. When I asked what the business was worth, the response was "Why? Its a corporation, no one can touch that - it's incorporated." "How much of the corporation do you own?" The answer, "50%". "What would the corporation be worth if you sold it?" The answer, "about 1.5 million dollars, but no one can touch it 'cause it's incorporated." "Really,........"