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Maverick
Maverick, Attorney
Category: Bankruptcy Law
Satisfied Customers: 3431
Experience:  Bankruptcy Law With An Accounting Degree - 13 + years as civil lawyer
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I have a 3 year old incorporation that I originally bought

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I have a 3 year old incorporation that I originally bought the inventory with personal credit cards. I no longer can afford the credit card payments and also my condo that is upside down. I stopped paying all credit cards and the condo, is my corporate invenoty of product protected if filing personal bankrupcy. I use to buy the product from my personal account before incorporating 3 years ago but since them bought it through the corportation. Please tell me any possible things that will be a problem. I just want to be sure my business is safe and seperate from my personal which I am almost possitive it is
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Maverick replied 5 years ago.
If you file personal BK, the shares you own in your corporation will become part of the BK estate and the trustee will become the holder of those shares. If you file a BK, he can then sell shares in the corporation or make a decision decision to liquidate it and take the proceeds to pay your creditors. So the corporate inventory may be protected but your interest in the corporation will be transferred to the trustee.

Please click accept so that I may get credit for my time. I would be happy to answer a couple of follow up questions at no additional charge. Thank you.
Customer: replied 5 years ago.
I am the president and have full ownership of everything. what will happen and can I do anything to protect the business? I have a partner that works for me but under his own corporation so he isnt an employee to save on some taxes for both of us. He is an accountant and knows a lot of this but want a second opinion. Can I transfer my shares to him or something. I want to do whats right but protect the business if legally i can. please let me know any advice. He says the business will be fine and I forgot what he planned to do but do you know maybe?
Expert:  Maverick replied 5 years ago.
You could transfer your shares to him, but if that happens with in 90 days before you file BK, the trustee or the creditors could challenge that as a fraudulent transfer and ultimately force a reveresal of the share transfer. (The 90 day rule is a general rule, in some cases they can go back an challenge transfer made with in 2 yrs of filing)

If the trustee or the court believes that the transfer was made with the intent to avoid paying the creditors, the court could deny you the right to file BK all together.

You may want to consider filing a chapter 13 reorganization plan where you pay back secured debts fully but pay back unsecured debts at cents on the dollar and then you can keep your assets and the the corporation. In order to do this you will have to have sufficient monthly income to cover all of the payments on secured debts, cover your basic living expenses, and a little bit more to pay unsecured creditors through the plan.

You can locate a BK lawyer in your area by going to www.lawyers.com

Customer: replied 5 years ago.
We don't have any secured debts just credit cards , business LOC in my personal ssn, condo that's upside down. We do have an income from
it that should be enough but not enough to afford all tge debt. Is it okay to wait or will it be to late if I don't do something now?
Expert:  Maverick replied 5 years ago.
The condo is your secured debt. If you file chapter 13 now, you can keep the condo provided that you have income to pay for it and your basic needs and a little more to pay towards the CC debts. If you are going to file, it would be better to file sooner than later because you will get some breathing room through an automatic stay.
Customer: replied 5 years ago.
I don't want tge condo it's worth $200,000 less than it's we owe and we don't even live there. Any other advice?
Expert:  Maverick replied 4 years ago.
Unfortuntately, there is nothing here that is going to be ideal. If you file chapeter 7 you give up control of the shares in the corporation. If you do not want that to happen then you file chapter 13, but then you have to pay back the condo loan to keep the control of the shares of the corporation. If you do not file bankruptcy, then they foreclose on the condo that you do not care about, but then they sue you for the negativ balance on the condo and the credit cards sue you yu and convert the debts into judgments and eventually they will attach those to your assets which include the shares in the corporation. If you transfer the shares to a friend or family member now, and if by chance the creditors drag there feet for over two years then they may not be able to challenge the transfer as fraudulent.
Customer: replied 4 years ago.
Okay, thanks for your time. In conclusion to all this, is there anything comforting you can tell me? or any possible loophole to look into? I would assume being my company I would have all the shares but I really don't know much about this, all I know if my accountant has been saying it will be protected and hes the one who created the corporation. I don't remember the terms he was using and it was a bit over my head but wanted to see if you might maybe know what he could be thinking? Thanks :)
Expert:  Maverick replied 4 years ago.
Not sure what your accountant could be thinking of. In any case, I would not rely on an accountant's advice for legal matters. Because bankruptyc has been around for so long and many people have tried novel was to try to protect there assets over the years, the courts and congress has gotten wise and made many regulations to curtail the loopholes. Sorry.
Maverick, Attorney
Category: Bankruptcy Law
Satisfied Customers: 3431
Experience: Bankruptcy Law With An Accounting Degree - 13 + years as civil lawyer
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