If one files for personal Ch 7 bankruptcy, do the past capital contributions to an LLC or S Corp get affected? Capital Accts? Owner's equity, etc?
I'm aware their units or shares may be affected. But I'm curious if capital accounts or owner's equity is an asset they can try and claw back from the business (even with multiple shareholders)
The short answer is it depends if it is real capital or an entry on a balance sheet. But, it can be affected, and when closely held business is involved a personal chapter 7 needs to be documented carefully.
