When you say that you have a partnership, is this a separate legal entity (LLP, LP, LLC), or just a handshake. And, if a handshake, how do you and Richard file your tax returns for this partnership?
Your issue may be significantly more complicated than you think. Partners are jointly liable for partnership debts -- so, if you have a handshake partnership, and Richard files for Chapter 7, then you may be on the hook for Richard's debts incurred in connection with your partnership.
Probably not what you wanted to read, but I'm not gonna sugar coat things.
Hope this helps.
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QUESTION: CAN WE DO THIS AND THEN RICHARD FILES BANKRUPCY AFTER THAT WITHOUT IT AFFECTING HIS BANKRUPCY.
A: If Richard moves assets or accounts into the new business, the bankrupcy trustee can avoid the transfer and dismiss the bankrupcy, leaving Richard at the mercy of his creditors. If Richard's contribution to the business is his labor only, then that would be okay.
QUESTION: CAN RICHARD STILL WORK AND THE CORPORATION RECEIVES THE INCOME WITHOUT IT AFFECTING HIS BANKRUPCY.
A: Yes. Earnings after filing Chapter 7 are the property of the debtor.QUESTION: CAN WE OPEN BANK ACCOUNTS IN THE NAME OF THE CORP BEFORE RICHARD FILES BANKRUPCY WITHOUT IT BECOMING A PART OF HIS BANKRUPCY.
A: Yes, as long as none of Richard's (or the partnership's) assets are deposited into the account.QUESTION: OR SHOULD HE FILE CHAPTER 11 FIRST?
A: I don't see this as an option, unless Richard's debts are greater than $1.4 million dollars.
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