If a corporation files for bankruptcy, creditors may try to get control of the personal assets of the owners of the company to collect on their debts.

Question

Quizplus · Accepted Answer

In most cases, the personal assets of the owners of a corporation are protected from creditors during a bankruptcy process, as the corporation is considered a separate legal entity. Personal guarantees or co-mingling of personal and business assets may impact this protection. However, the primary focus of the bankruptcy process is to liquidate or restructure the assets and operations of the corporation itself to pay off its debts.

If a Corporation Files for Bankruptcy, Creditors May Try to Get