Director of a nonprofit corporation declaring personal bankruptcy...

[brokenomore]

I am the director of a nonprofit corporation which currently has no money and no assets.

I will be involved in a project and will hopefully raise $15,000. Much of that amount will be put into equipment, and some will be in fees and other costs, so probably about $10,000 will remain as actual assets, though the resale vaule would very soon drop to half that amount.

I have a large judgement against me for medical debt, and my personal bank accounts could be garnished, but so far that has not happened in over a year. I don't have any income except for self employment.

My question and concern is whether a judgement against me could spill over into the nonprofit corporation, or whether filing a personal chapter 7 would affect any assets of the nonprofit corporation.

The money that I raise will be donated money, and the assets purchased would not be my own personal possessions.

My pending bankruptcy attorney said the trustee could seize my nonprofit corporation too, and I'm wondering if he's right about that. It doesn't make any sense to me that he could.

But if he could, would the minimum equipment allowances apply in reards to the corporation assets?

As a joint self-employed filer, I believe we could exempt $6,000 of business equipment, so most or all of my personal business equipment and the corporation equipment could be protected, if valued at quick-sale prices.

Any suggestions how to protect the donations I receive for the nonprofit?

If the nonprofit corp has little or no assets, would they still want to do something with it or force it to dissolve?

[frogger]

So you're saying that you are the actual owner of the non-profit?

[tobee43]

i have the same question as fogger...do you own the non-profit status corp.??

if so, how was the corp set up...are you the one that incorporated the company??

also usually non profits have boards or chairs that guide the company....if can be a confusing situation if you "own" this company...and i think it's stinky with someone donates money and gets a tax deduction and then the money goes to the bk court???

i cannot wait until maybe one of the atty's that frequent this site respond to this situation...very interesting!

[HHM]

If the non-profit is properly set up and maintained, there should be no issues. However, trustees love to investigate these arrangements to make sure you are on the up and up, if the non-profit is not a legitimate 501(c)(3) entity, then the trustee will take it. But, if the non-profit is legitimate and properly set up, there is NOTHING the trustee can do to the non-profit (if you transferred personal assets into the non-profit the trustee could sue the non-profit to get those assets back, but that is no different than any other fraudulent conveyance issue).

I think you need to find a more experienced BK attorney.

[tobee43]

If the non-profit is properly set up and maintained, there should be no issues. However, trustees love to investigate these arrangements to make sure you are on the up and up, if the non-profit is not a legitimate 501(c)(3) entity, then the trustee will take it. But, if the non-profit is legitimate and properly set up, there is NOTHING the trustee can do to the non-profit (if you transferred personally assets into the non-profit the trustee could sue the non-profit to get those assets back).

I think you need to find a more experienced BK attorney.

agreed...one would like a "seasoned" bk atty would be familar with this type of situation.