If I owe debt under my C Corporation can they come after my personal assets?

Our company is a startup, about 3 months into operation, but are already swimming in about $22,000 of debit ( $10,000 loan, and $12,000 credit card ), the problem being we made a few costly mistakes in the beginning, and thus here we are today.





My main full time job, is cutting payroll by almost 50%, so instead of making $1400 - 1500 a month, now its less than $900. I cannot pay my current debts off. I'm already enrolled into a personal debt collection management program.





*** Here is my question ***


1. As a C-Corporation am I personally protected from the business debt? Meaning if say the business owes X amount of dollars, they cannot harass me or try to take my car or house or w/e to pay off the funds.





2. How do I go about explaining to them? Should I file for chapter 11 bankruptcy.. but at the same time I'd like to save the company somehow, I just can't pay off this debt.





Any help would be very much appreciated.





Thank you!

If I owe debt under my C Corporation can they come after my personal assets?
Im sure your corporate paperwork says that you are only responsible for the money you placed into stock. Say 500 dollars.





They would have to break your corporate veil. Meaning the creditor can show that you never paid the 500 for your stock. Or that you didnt have your required meetings. That you didnt keep minutes. Or worse you used the business accounts for any personal items.





If you did it above board you are fine. If you use your business checking account or credit card to take out 100 bucks for personal use. You are screwed. It depends on how you did it. If you used your business account for a personal lunch or night on the town and didnt properly expense it. I would be worried. If you didnt, then you are protected. If you didnt follow all your state laws the viel can and most likely be broken. Meaning you used the company as a personal account. Therefore they can go after anything personal of yours.





I hope you took minutes I hope you kept record of where all the money went. Because if you cant prove it. They could very easly pierce the corprate veil.





And anything you personally own they can go after.
Reply:to the first answerer - a C-Corp is a standard corporation -has nothing to do with the Sched C on a 1040 tax return.





So long as any debts thru the corporation were not personally guaranteed by you as an individual, you should be protected
Reply:If you incorporated (you used the word corporation), that releases you from personal liability against debts of the corporation. You don't need to explain "this" to them. Did you take out this debt using your SSN or your company TIN?





It sounds like you are not truly incorporated. Schedule C is used by individuals to file taxes for a personal business. Corporations will file their own income taxes wholly separate from individuals. It sounds as though you never incorporated (this typically costs $1000 or more and often requires legal assistance). I have never heard of such a beast as a C-Corporation.

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