Q: If i file bankruptcy on my corporation does that affect my personal credit negatively?
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A:
Filing bankruptcy for your corporation typically does not directly affect your personal credit, but there are some important considerations:
1. Corporate vs. personal bankruptcy: If you file bankruptcy for your corporation, it's generally separate from your personal finances. The bankruptcy will appear on the corporation's credit report, not your personal one.
2. Personal guarantees: If you've personally guaranteed any of the corporation's debts, you may still be liable for those debts even after the corporate bankruptcy. This could impact your personal credit if you can't repay them.
3. Credit checks: Some lenders may check both personal and business credit when making lending decisions. They might view the corporate bankruptcy negatively, even if it's not on your personal credit report.
4. Future business dealings: The corporate bankruptcy might make it more difficult to obtain credit or loans for future business ventures.
5. Piercing the corporate veil: In rare cases, if the court finds that you've commingled personal and business finances or committed fraud, they may "pierce the corporate veil" and hold you personally liable for the company's debts.
It's crucial to consult with a bankruptcy attorney or financial advisor for advice specific to your situation. They can help you understand the potential implications and protect your personal finances as much as possible.
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