Chap 7 - Want to Defer 2nd Job Income - LLC, S Corp or C Corp

[gman]

I have not yet filed for a Chapter 7 because my current income is too high over the past 6 months. I may or may not qualify in the future.

I am thinking about taking on some moonlighting work (nights and weekends) as a consultant/programmer. This "2nd job" would not be as an employee of the company I am working for today, nor would it be for any company that I would moonlight for in this role.

Of course, I could simply be a sole proprietor and receive 1099 income statements in my name. These would be visible on a means test.

I was considering forming an LLC, S Corp or C Corp to shelter and possibly DEFER this income for a substantial period of time. As long as I do not take money OUT of the corporation (or if I only take a little) - I figure I can keep the money made within the corporation and pull it out 2-3 or even 5-10 years from now - after I file for a Chap 7.

I realize this is "playing the game" - but I also realize I did not make up the new rules in 2005.

Since an LLC, S Corp or C Corp can remain somewhat anonymous, what are the pros and cons to this strategy????

[frogger]

I was considering forming an LLC, S Corp or C Corp to shelter and possibly DEFER this income for a substantial period of time.

Then it should be in your corporate A/R which is going to become the property of the trustee.

As long as I do not take money OUT of the corporation (or if I only take a little) - I figure I can keep the money made within the corporation and pull it out 2-3 or even 5-10 years from now - after I file for a Chap 7.

Wrong.

I realize this is "playing the game" - but I also realize I did not make up the new rules in 2005.

There is a difference between playing the game and hiding assets. Do you have a particular prison that you would prefer over another?

Since an LLC, S Corp or C Corp can remain somewhat anonymous, what are the pros and cons to this strategy????

Anonymous? ABSOLUTELY NOTHING IS ANONYMOUS

What you're thinking of is going to create a world of grief for you. Do what you will, for you will be the one reaping the rewards or consequences for your actions.

Don't mean to sound harsh, but that's just my opinion.

[Meatstick]

I have to agree with Frogger, what you proposing smells of trying to hide assets.

[StartingOver08]

The very first thing the Trustee will do is check your states corp records. At least mine checked the corp records. These are public records and easily available online. If you are a LLC or any type of corp, it will show up. If you don't mention it in your petition, then you will be in hot water.

Any A/R you have accrued in the corp name will belong to the Trustee - even if you file personally. You can keep funds earned after filing. But not funds earned prior to filing (unless they are exempted).

[mtbc]

I concur with the above. Even if it's a C corporation, who owns it? If you, its funds increase its value as an asset on your schedules.