Avoiding a BK?

[ravens9111]

Hello. I have been fortunate so far to avoid a BK from a failing business. I closed my business about a year and a half ago. I paid off most of the debt for the business except for the business credit cards. The creditors claim I have a personal guarantee on those accounts. I have disputed this since I never signed anything of the sort and had the company Tax I.D attached to the account. I met with a BK attorney and he told me a Chapter 7 would be the way to go. I did not want to go that route unless I had no other choice. I decided I would try and wait out the Statute of Limitations for the credit card debt. If the creditors decided to take any legal action in court, I would then file as I would have no other choice since I would not be able to pay any kind of judgment. The SOL has about another year and a half left and then I am home free.

Since I made this decision, I have been able to save up some money from working another job. I have thought about opening up another business. This is where my question may get complicated.

If I were to put the money I have saved up into a new LLC or S-Corp., would those assets be considered safe from these creditors? If they were to sue me personally for the original business accounts, could they levy the bank account of this new business? As a worst case scenario, would I still be able to file a Ch.7 BK and keep the assets of this new company since it is not associated with the prior company? Would the assets of this new company be considered in any new proceeding even if they are not in my name personally? Would it be best to wait out the 3 years SOL before starting the new business so there is no risk of any of this happening and to avoid complications?

If these questions are not clear, please let me know. I can clarify if needed. Thanks for the help.

[justbroke]

Hiding money in an LLC, S-Corp, or anywhere, for the sole purpose to delay, hinder or defraud creditors... will not protect it. Remember, that even in a single-member LLC, the creditors may be able to pierce the corporate veil based on how the company is structured.

If you are serious about asset protection, contact an asset protection attorney.

[ravens9111]

Hiding money in an LLC, S-Corp, or anywhere, for the sole purpose to delay, hinder or defraud creditors... will not protect it. Remember, that even in a single-member LLC, the creditors may be able to pierce the corporate veil based on how the company is structured.

If you are serious about asset protection, contact an asset protection attorney.

Thanks for the response. However, I am not trying to hide any money or defraud creditors. I don't believe I personally owe the credit card debt from the business. I have asked the creditors numerous times to send me documents showing that I personally gave a guarantee for the accounts. They have yet to provide me this information.

I am not trying to break the law or anything of the sort. I am only trying to find out if I am able to start a new company and not have to worry about the assets of the new company being seized if I were to start one and later had to do a BK if they decide to pursue a judgment. I am not an attorney, so I don't know what can or can't be done legally.

I appreciate the advice to seek an asset protection attorney.

[HHM]

Don't kid yourself, you have personally guaranteed the debt. For small businesses, there is no way to avoid it.

[mrskal]

I agree with HHM it is attatched to you personally. You either need to do the BK to get rid of it, or use the money you saved for the new business and pay it off. Maybe they will offer you to settle first. I have a business card, that is used my Tax ID for and my business vehicle as well that is a business acct, lawyer told me I have to include it in my BK. I dont know for sure, I am not a lawyer, but that is my opinion too.
I am interested to know what happens with it though, if you could do what your planning it would be great.