Our client, a small business owner in Salem, MA, was the sole shareholder of a corporation. The corporation owed substantial trade debt as well as tax liabilities to the Massachusetts Department of Revenue for unpaid taxes for which the client had been determined to be individually responsible. The business, a restaurant, had only one significant remaining asset, a liquor license, which was about to be revoked by the City in which the restaurant was located. We filed a Chapter 7 Bankruptcy for the Corporation in order to allow the liquor license to be auctioned by the corporation’s Chapter 7 Trustee. This in turn generated funds which, by operation of the priority scheme of the Bankruptcy Code, were paid by the Trustee to the Massachusetts Department of Revenue ahead of the corporation’s other creditors. This payment in turn reduced the Client’s personal liability for these “trustee” taxes, which he was then able to manage in a subsequent personal Chapter 13 case filed by our office on his behalf.

RESULT : The Client was able to obtain a fresh start by eliminating all business debt personal liability, credit card debt and tax liabilities to the Massachusetts Department of Revenue by a combination of a Chapter 7 bankruptcy for his small business and an individual Chapter 13 bankruptcy filing.

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