How Does a Personal Bankruptcy Affect a Corporation

| Category: Bankruptcy in Ontario
Category: Bankruptcy in Ontario

Question: I’m from Ontario,

I have $70,000 in personal debt and looking to file for personal bankruptcy. I own my own corporation that is Incorporated. How will a Personal Bankruptcy affect my Corporation?

Answer: Your personal bankruptcy does not directly impact your corporation, since it’s a separate legal entity. If your corporation has no value, the trustee would not seize it in your bankruptcy. However, if the corporation has value, you would be required to pay that value to your trustee or surrender the assets of the corporation.

In addition, you are not permitted to be the director of a corporation while bankrupt.

Bankruptcy where corporations are involved are complicated, so you should consult a trustee or lawyer for more information.