S-Corp considering bankruptcy

[crst28]

What is the name of your state (only U.S. law)? IL

My wife and I started a business 2 1/2 years ago. I work a job full time that is independant from the S-Corp.

To date we have a total of about $50,000 debt from the corp. We have also never taken an income from the business. Our debt repayments far exceed what we have been able to generate for income. We are at a point where we will be in financial trouble prsonally.

Is bankruptcy an option?
Will it destroy my personal credit?

Thanks!

 

[Ronin]

Although you setup as an S-Corp you may find out you are personally on the hook for a lot more of the debt than you think. If any loans were obtained based upon your personal credit and are in your name rather than the corporation then you are personally liable. Any bankruptcy actions that eliminate such debts would reflect on your credit. Chapter 7 is not as simple as it used to be since the recent bankruptcy law changes, and a working person may not be able to discharge all the debt.