bankruptcy question

[Drock409]

i'm not 100% positive.. but i think i remember some of these points
from former readings

anything you do within a year of declaring bankruptcy will have to be repaid ..so you have to plan puttin stuff in corp's , other peoples, names, etc 1 year before declaring


depending on the state..if you are in a multi member LLC, you may be get a judgement against you, but unless you make a distribution you do not need to pay out your creditors and if they do get a judgement...even if they collect nothing they need to book and pay taxes on the entire amount of the judgement

 

[TraderZones]

Quote from oraclewizard77:

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.

this is not particularly true. People sue the officers of the corporation all the time.

Whether or not they are liable (either legal or civil) depends on the charge/allegations. If someone broke the law, or if someone personally guarantees a debt, or if the corporation was decided to be illegitimate, or if their actions were basically malpractice, then the veil is piercable.

"Slip and fall" is a lot different than "partner in a law firm - LLP withheld evidence" or "accountant advised clients to overstate their deductions."

As the UBS whistleblower is learning the hard way.

 

[jem]

corporations which are properly funded, maintained and insured can insulate owners of the corp from creditors of the corp. if properly maintained. The assets of the corp would be answerable to the creditors. Once those assets are depleted the owners assets should not be on the line. if you have intellectual property it is frequently wise to set up a series of entities with one entity maintain control of the valuable property and the corp licensing it. As long as the corp was funded, maintained and insured properly the strategy should work.

Creditors try to get around the corporate veil by claiming the act was done by the officer or individual not the corp. That is why it is important for the officer to sign and make contracts as the the officer on behalf of the corp.

as an individual looking to bankruptcy law for protection from the individuals creditors... If the individuals owns shares of a corp those assets will be in reach of the creditor. (in theory) . pre bankruptcy transfers can be reached if they were done within certain time frames and certain intents. They can be seen as fraudulent transfers.

 

[TraderZones]

Quote from jem:

That is why it is important for the officer to sign and make contracts as the the officer on behalf of the corp.

This is a screamingly obvious statement known to all corp officers, but it does not change the reality of what I said above. There is no protection to someone who cosigns personally, commits some form of malpractice, fraud, criminal act, etc. He is completely liable in such cases, according to courts.

To the average small business, corporate protection is often useless, as many businesses do not have liability exposure (such as someone running a trading advisory or trading for themselves).

For example, if you own an S Corp, and you allow someone without a license to drive company vehicles, you are on the hook.

That is why many corporations still wind up purchasing all sorts of insurance anyway.

 

[indexer]

You would be better off checking this out in a forum that specializes in bankruptcy.

 

[jem]

Quote from TraderZones:

This is a screamingly obvious statement known to all corp officers, but it does not change the reality of what I said above. There is no protection to someone who cosigns personally, commits some form of malpractice, fraud, criminal act, etc. He is completely liable in such cases, according to courts.

To the average small business, corporate protection is often useless, as many businesses do not have liability exposure (such as someone running a trading advisory or trading for themselves).

For example, if you own an S Corp, and you allow someone without a license to drive company vehicles, you are on the hook.

That is why many corporations still wind up purchasing all sorts of insurance anyway.

If your s corp was properly maintained and insured and your commission to check for a valid license was negligent.... in fla and ca imlo - your corp would stand up.

Corps are supposed to protect the shareholder from negligent acts. that is why they buy insurance. So that the creditor can be sent after the insurance.

 

[volente_00]

Trustee works for the govt. They have access to everything to follow the paper trail. Unless you deal strictly in cash and deposit in accounts not tied to you or the corp you will more than likely get caught.

 

[crgarcia]

Quote from 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?

I'm not a lawyer (I'm a decent person)
But I think the JUDGE can get access to everything you own.

 

[TraderTactics]

Quote from 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?

Seek the advice of a lawyer. There are types of bankruptcies you can file depending on your or your business' situation.

 

[Vinny1]

Quote from TraderZones:

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.

You don't think that there are many people out there that keep money in a safe for years to hide it from creditors?

Also, if you file for bankruptcy, do you get to keep your home and car? Do you get to keep your clothes, furniture, electronics, and other personal items, or do you have to get rid of every single piece of item that you own and only be left with 1 pair of pants, 1 shirt, 1 pair of socks, 1 underwear, and 1 pair of shoes and nothing else?