Hi. My husband and I started a company 8 yrs ago, and we are now a S-Corp. In the past two yrs we have fallen on hard times, along with the rest of the world.
Back in '03 we took out a buines loan, we were starting a new project and awaiting payment on a current project that we never ended up getting paid for. It was $80,000... the company said we broke the non compete, after they let us go... forfieting all money owed. Then the company practically disappeared... I contacted several lawyers, and law officials, collection agencies, etc. They all said there was nothing we could do. So we went on and struggled, but we made it through that. Still paying on the loan, and other financial obligations instead of filing bankruptcy.
When we changed from SP to an S-Corp, we changed all documents with the bank, and renewed the loan under the corp, but still having to personnally guantee the loan.
Now, to present day after several projects have drained us and not been profitable, struggling, loaning our company personal money, borring from family members... we just can't meet financial requirements at this time. We feel behind on 2 bank payments, and they went after the company we now do work for, they only have old ones listed on the UCC filing. While they got leagal advice weather to pay us or the bank our money from invoices, it held things up 6 weeks which got us further behind. At the same time one of the other companies we had a contract broke the contract because we kept calling asking when we could expect payment for invoices due. (That is another question all in it's self)
So the company decided to pay us, and we talked to the bank asking them to work with us, and they refused demanding the balance owed in full. We got an attourny, and he said since this company wasn't listed they had no grounds to go after our money from them. Now, the bank sent a letter stating they are sueing the both of us. Thus, upsetting the company we work for and they are terminating our contract. That leaves us with absolutely no work. That's not just our income, but the income for several families.
Personnaly we have drained all of our savings trying to keep the company afloat... borring money from my mother-in-law, which took out a note at the bank for us, for the company. We are so behind on everything, and just can't go on as a company, and most personal debt is a mess. We have decided to file personal bankruptcy, and now want to close our company... and start a new one.
Can we do that leagally, who's name do we register it in, can the bank come after the new company, who gets the money we get paid from the company we work for, if they don't pay us, and pay the bank... what can we do. The original loan was $50,000 now we only owe $18,000. This has really put us in a huge bind and don't know what options we have... anyone out there that can help-give any insight to the situation?
Thanks!

I am not an attorney but me my business partner had found ourselves in the similar situation couple years ago. However we did not have any loans taken out in the company name (it was S-Corp. as well in state of IL) but we got sued by the Union for 6 digit number. Since that point on, we basically couldn't found any more work, all the contracts we had either stopped paying us because Unions called them or they just wouldn't hire us because they were afraid of the Union, as almost all the companies here around Chicago. Union never helped us to get work or prosper better, they were only making our lives miserable for several years. But I will get to the point:
After the lawsuit has been filed they put garnishments on all of our company accounts. All the money we had there was confiscated by the union even before court hearing. Advise from our attorney was to close the company and open a new one in a few months when everything gets straight. So we closed the old one. When we went to the court we just just showed them that we had no more money at the accounts, and no assets in the company. If you were incorporated they can not go after your presonal assets. That is only if you did not secure the company loan with your personal property. My advice would be to talk to a lawyer. But to make it more clear:
They can take all the assets that company owes if they take you to court.
That means that if the car you own is in a company name, than they would be able to take it. And also any equipment owned by the company.
But if the stuff you own is in your name they can not take it. They can not go personaly after you for companies debt, but again, that being said if you secured the loan with your personal credit your personal credit rating will get destroyed and you might not be able to get another loan for quite some time.

I hope this helps.

Can we do that leagally, who's name do we register it in, can the bank come after the new company, who gets the money we get paid from the company we work for, if they don't pay us, and pay the bank...what can we do. The original loan was $50,000 now we only owe $18,000. This has really put us in a huge bind and don't know what options we have...anyone out there that can help-give any insight to the situation?Hello a:

Your questions cannot be answered until you clean up the mess. You need a lawyer.

But, DON'T go to the one who told you that you couldn't collect on the $80,000 that started this whole thing headed downhill. I couldn't get passed THAT boondogle, and I can't imagine why you didn't go after them... Really.

excon