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Bankruptcy and life insurance

Asked Jul 18, 2006, 10:24 PM — 5 Answers
I know it is a weird combo. But if you claim corporate bankruptcy and you die can they go after your personal estate? If you have signed a personal guaranty? I heard they have to leave you(if not deceased) or your estate your house and a vehicle(in fla) is this true? Last question. Can they take your life insurance from your family when you die?

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aqua@home's Avatar
aqua@home Posts: 604, Reputation: 542
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#2

Jul 18, 2006, 11:22 PM
I am not a lawyer but I am under the impression that one of the main point or perks to having a corporation is so if the corporation goes down it doesn't take anyone with it. That's how it is here in Canada. A corporation is on it's own and the owners are untouchable. The same would go for anyone left living after you die. The corporation has things repoted, seized, goes bankrupt, etc. Not personal. I hope this helps.
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ScottGem's Avatar
ScottGem Posts: 58,018, Reputation: 28115
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#3

Jul 19, 2006, 06:18 AM


What aqua said about a corporation is true. However you mentioned signing a personal guaranty. That means that you, personally, have guaranteed the debt you signed for. So they could go after at least some of your assets. However, generally, life insurance proceeds and personal homes are outside the assets liable for such debts.

Haven't you consulted your attorney on this?
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steveg's Avatar
steveg Posts: 4, Reputation: 1
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#4

Jul 19, 2006, 08:23 AM
Scottgem and aqua,thanks for the input .I have not as yet contacted a lawyer ,I am just putting it out there in case that avenue has to come about. Never go into the restaurant business under capitalized. It could literally,destroy your well being.
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Fr_Chuck's Avatar
Fr_Chuck Posts: 72,597, Reputation: 37026
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#5

Jul 19, 2006, 06:28 PM


Yes, once you sign a personal guarntee you loose almost all of the benefits you got as protection of personal assets. So if you have a corp it is always best not to do this. Next of course the personal guaranty is only for the specific loans you used it for.

Coporation bankruptcy is a very complicated situation, so I would always use an attorney for any discussion on this
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steveg's Avatar
steveg Posts: 4, Reputation: 1
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#6

Jul 19, 2006, 08:32 PM
Thanks,Fr_ chuck,I appreciate the input. Steve G
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