filing because of lawsuit, no unpaid debt. Help

[graniteguy79]

Long story short, I am personally being sued because I worked for a construction company 5 years ago that built a home in a subdivision and now the entire subdivision is under litigation because soil engineers did faulty testing and the homes are all moving. Anyhow, I didn't do anything wrong but since I signed a closing doc, I'm being sued as well as the land developer, contractors, and soil engineer. I have spent over $22,000 fighting this but my attorney suggests that it will be another $50,000 to $75,000 in legal fees when it goes to trial. I can't afford this.

I don't have savings accounts, have a mortgage on my home relative to it's value. I do own a profitable business with assets BUT has a SBA loan against it but probably not large enough to cover all assets. Also own 2 vehicles. One is my wifes car worth about $8,000 which she needs for our 3 kids and her job. I have a truck that I use for work daily worth about $25,000. My business corp. is not being sued and owns 3 trucks, lots of equipment, and has a fairly large bank account used to run and maintain. I honestly don't want to include credit cards, medical bills, or even my unpaid legal fees which I make monthly payments on. I just want to avoid any more legal fees and any judgment that may be placed on me. I can probably go a year without having to file unless I can do it now even though there is no judgment placed against me, yet.

I feel like I've been shafted here. I've been honest and a hard worker and now I'm being kicked while I'm down here. I am considering selling my wife's car, using it to buy "groceries, etc." and taking a loan out against my truck and buying her a new car? I would buy a car that still maintained a loan hoping that creditors wouldn't take 2 cars with loans. Any strategic plans on doing this or should I sell now and convert the cash into non assets now and just get a car later? Either way, I lose in this situation. Perfect credit, young family, all down the drain because of an unfair legal system.

[graniteguy79]

My business is also a huge concern but it's in a corporation so I've been told it's protected? I could probably hold out a year before filing, this lawsuit will take that long very easily. I don't even know if I could file before there is a judgment? My wife does not plan on filing, any way to transfer items into her name? If my business is taken, it will ruin me. I would even file a divorce and remarry after a few years if it meant keeping my business, home and what I work hard for every day.

[frogger]

My business corp. is not being sued and owns 3 trucks, lots of equipment, and has a fairly large bank account used to run and maintain. I honestly don't want to include credit cards, medical bills, or even my unpaid legal fees which I make monthly payments on.

You can't do what you want to do. With a profitable corp and lots of equipment and money, the trustee is going to enjoy this bk, for there's lots of profit to be had.

Your corp is an asset and can not be exempted.

That 50-75K may be cheap in comparison........

[frogger]

My business is also a huge concern but it's in a corporation so I've been told it's protected? I could probably hold out a year before filing, this lawsuit will take that long very easily. I don't even know if I could file before there is a judgment? My wife does not plan on filing, any way to transfer items into her name? If my business is taken, it will ruin me. I would even file a divorce and remarry after a few years if it meant keeping my business, home and what I work hard for every day.

No, No, No, No.

Don't do any of this. You need to seek bk counsel before you even think these thoughts.

Ask away here with questions, but don't do any actions that you'll prove to regret.

[graniteguy79]

The problem, my corp requires around cash to maintain the slow and busy times. Without myself as the manager and laborer, the company is worthless. Luckily I believe that the depreciation of my equipment and tooling is worth about the same as my sba amount and I will be transferring my stock shares of the business to my wife. Like I said, I should have a year at least before I would need to file. If none of this is possible, I will probably cash out my business now, sell it and hide the cash. that way a year down the road I can show that I'm working for someone for a wage and there would be nothing to take. Why would I work 50 hour weeks just to turn over what I have to a non deserving individual? Wouldn't it be better to cash out now? And the 50 to 75k that attorney fees will cost me would destroy my business, destroy it and cause a forced bankruptcy anyhow AND there is a slight chance I could be held liable for a portion of this suit which could cost an additional 100k. It's a frustrating situation really but I'm not willing to just throw it all away, I've worked way too hard and done nothing unethical, fraudulent, or deceiving. Just a victim of a broken system. Thanks again for your help and suggestions. I will be contacting a BK attorney tomorrow morning to help pre-plan and I will keep everyone posted.

[newbie2]

The problem, my corp requires around cash to maintain the slow and busy times. Without myself as the manager and laborer, the company is worthless. Luckily I believe that the depreciation of my equipment and tooling is worth about the same as my sba amount and I will be transferring my stock shares of the business to my wife. Like I said, I should have a year at least before I would need to file. [I]If none of this is possible, I will probably cash out my business now, sell it and hide the cash. [/I]that way a year down the road I can show that I'm working for someone for a wage and there would be nothing to take. Why would I work 50 hour weeks just to turn over what I have to a non deserving individual? Wouldn't it be better to cash out now? And the 50 to 75k that attorney fees will cost me would destroy my business, destroy it and cause a forced bankruptcy anyhow AND there is a slight chance I could be held liable for a portion of this suit which could cost an additional 100k. It's a frustrating situation really but I'm not willing to just throw it all away, I've worked way too hard and done nothing unethical, fraudulent, or deceiving. Just a victim of a broken system. Thanks again for your help and suggestions. I will be contacting a BK attorney tomorrow morning to help pre-plan and I will keep everyone posted.

Please please PLEASE talk to an attorney before you do anything.

Also, I take it from your name (graniteguy) that you are in no way responsible for the foundation issues that are the makeup of this lawsuit. Have you hired an attorney yet to have you dropped from the suit? Most lawsuits begin by pulling everyone in to it in the beginning with the result being that many people are dropped from it.

[AngelinaCatHub]

All of your pre planning is illegal. You cannot just change assets, even a planned divorce could be over ruled as attempt to hide assets.

I went from well off to poor due to an enemy who peckered me with law suits civil and attempt at criminal for nine years. Cost me about 190K in legal fees and nothing ever went to Court.

Have your lawyer send a settlement agreement for $10. Yes $10 dollars. This is a ploy were you can get all your fees back in the event they lose the case. It is an insult settlement but causes the Court to allow loser pays.

I would drop the lawyer completely. Let them take you to Court and tell the truth, let the chips fall where they may. Check the local law on garnishment and even if you by chance get a levy, and you are one of many, they may only be able to take less than what you are being robbed by your lawyer.

The trouble with Tort is anyone can sue for anything, but it still costs the Defendant money even if the Defendant is unjustly sued. Not quite fair but until we get Tort reform (hold your breath) it is the way it is. Tort is not a tool, it is a weapon. 'Hub

[keepmine]

Nothing wrong with bk preplanning but, stop throwing around the phrase hiding cash/assets and instead start thinking in terms of, turning nonexempt assets into exempt assets.
I'd suggest you start speaking with some asset protection lawyers.
Just as an ex. Hiding cash and filing bk is fraud. But, taking the cash and purcasing a tax deferred annuity or similar insurance product or, putting funds in an IRA may be considered good tax/estate/retirement planning.
Get some legal advice from someone that has expertise in this field.

[frogger]

The problem, my corp requires around cash to maintain the slow and busy times. Without myself as the manager and laborer, the company is worthless. Luckily I believe that the depreciation of my equipment and tooling is worth about the same as my sba amount and I will be transferring my stock shares of the business to my wife. Like I said, I should have a year at least before I would need to file. If none of this is possible, I will probably cash out my business now, sell it and hide the cash. that way a year down the road I can show that I'm working for someone for a wage and there would be nothing to take. Why would I work 50 hour weeks just to turn over what I have to a non deserving individual? Wouldn't it be better to cash out now? And the 50 to 75k that attorney fees will cost me would destroy my business, destroy it and cause a forced bankruptcy anyhow AND there is a slight chance I could be held liable for a portion of this suit which could cost an additional 100k. It's a frustrating situation really but I'm not willing to just throw it all away, I've worked way too hard and done nothing unethical, fraudulent, or deceiving. Just a victim of a broken system. Thanks again for your help and suggestions. I will be contacting a BK attorney tomorrow morning to help pre-plan and I will keep everyone posted.

Wow. That's all I'm going to say.