Can a CEO that is named personally in a lawsuit be added onto the corporate bankruptcy filing?
Also, if the CEO files for personal bankruptcy, how does that effect a rental property that he has but still has a mortgage on it?
3 attorney answers
One has to file a personal or individual (consumer) bankruptcy in order to address ones personal liability such as a personal guarantee on a business debt. A business bankruptcy and a consumer bankruptcy are two different bankruptcy cases and two different entities/persons.
Depending on the type of bankruptcy filed and depending on the financial circumstances of the individual or consumer their rental property may or may not be protected. However, a certain type of bankruptcy case can protect rental property. It would be best for you to schedule a consultation with an experienced bankruptcy lawyer.
Please note: I am a licensed attorney in California. This response is intended only as general commentary. This response is not legal advice and does not create an attorney client relationship.
No, you cannot “add-on” any individual for any reason, regardless of their title/capacity, to a corporate bankruptcy filing. A corporation is an entirely separate legal entity and different rules apply to a corporate chapter 7 bankruptcy from an individual chapter 7 bankruptcy.
Be sure to talk with and possibly retain a bankruptcy lawyer to help you navigate the territory—- filing for bankruptcy protection & relief can create a mine field of technical problems if you’re not careful.
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A corporate bankruptcy will not protect you in your individual capacity. A personal bankruptcy would protect you in your individual capacity. Consider whether the plaintiff has a basis to sue you individually? You'll need a lawyer.
Law Office of Michael J. Primus We are a debt relief agency and help people file for bankruptcy under the bankruptcy laws. We have offices in California only.