An S-Corp business has run out of work, has personally guaranteed bank loans, consultant debt and back rent owed. Two of the three partners want out of the business and are looking at bankruptcy. Remaining partner wants to reorganize the business, keep it going, pay the consultants, pay his share of the bank and rent debt and maintain good credit.
How does the business debt get divided, without filing bankruptcy on behalf of the corp? Must the 2 partners file personal bankruptcy?
In the event the 2 file bankruptcy, are those partners absolved of the bank and rent debt? Does the remaining partner gets stuck with the entire debt? Bank loan has such a clause for collection. Does the bankruptcy collect from the individuals property, new wages, etc. to pay back their share? Thanks.