bankruptcy question

Discussion in 'Economics' started by riddler, Jan 12, 2010.

  1. riddler


    if someone filed for personal bankruptcy;i.e credit card bills ect..

    1)could the credit card company or collection angency gain access to your business checking account if it is a corporation?
    2)can they gain access to business checking that is sole proprietor?
  2. You need to speak with a lawyer who specializes in bankruptcy law in your state, not an internet forum of wannabe traders.
  3. Not sure what the meaning of the question is. The whole point of filing for bankruptcy is to stop creditors and collections from harrassing you or trying to place liens on your accounts. Now that doesn't mean the BK trustee cannot decide where the money in those accounts will go, but it does mean the creditors cannot mess with them.
  4. Is it wise to hide your money in a safe before you file for bankruptcy? What about just keeping money in a safe for years in case you have to one day file for bankruptcy?
  5. Perhaps you should ask your bank. If you do, please let us know the answer.
  6. Not being a lawyer, but being fairly well read. I think it comes done to them taking you to court and get a judgment against you for commingling funds. If they get that you are probably done. Look up fraudulent conveyance also.
  7. pspr


    You will need to include sole prorietorship accounts in your reporting tothe bankruptcy judge. Possibly also a corporations accounts depending upon who controls the corporation and your ownership position. You don't want to hide money from the court.

    Best bet is to seek legal advice.
  8. It seems to me that there are two issues being mixed here. If you declare bankruptcy, you are required to disclose all your assets and liabilities, whether held personally, as a sole proprietor or in your corporation.

    In a situation, other than bankruptcy, a creditor could sue and perhaps get a judgment against you. They would then make a claim against all the accounts in your name at all the banks that they find out about when they question you. This would include your personal accounts and your sole proprietorship.

    Further, I have been told that creditors can make claim to any bank account on which you are an authorized signature. If you happened to sign on someone else’s bank account, say your employer, a court hearing would be needed to determine who the owner of the money is.

    Btw, credit card companies frequently sue hoping that the creditor won’t answer and that they will then get a default judgment. If the creditor answers the lawsuit, the credit card company doesn’t go to court because they aren’t willing to pay the additional legal fees. There would then be no judgment. This obviously depends on the amount of money involved.

    I agree with the person would said that you need to speak to a bankruptcy attorney for a definitive answer.
  9. Put it this way. If you commit fraud (such as hiding assets this way), they can undo your entire bankruptcy. And worse.

    And better not tell anyone. It is amazing some of the ways that people are reported or found out.
  10. oraclewizard77

    oraclewizard77 Moderator

    A corporation is a legal entity. That is one of the points of creating one. This is how the rich protect themselves. For example, lets say your corporation or LLC owns an apartment, and someone falls and hurts themselves in that apartment. They can sue the corporation but not personally sue you.

    This was also how Oliver was able to steal money from his traders, since they could only sue the corporation not him.
    #10     Jan 12, 2010