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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12957
Experience:  B.A.; M.B.A.; J.D.
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I had a business in NY. I now live in NC. My business is being

Customer Question

I had a business in NY. I now live in NC. My business is being sued from a bonded job. If I end up losing this case, how does bankruptcy work in NC?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 1 year ago.
Thank you for giving me the opportunity to assist you. Kindly use CONTINUE or REPLY button to ask for clarification or follow-up questions.

Could you please clarify?

You said that you "had a business." Is the business dissolved with the New York Secretary of State's Office?
Customer: replied 1 year ago.

Sorry. Im wasnt clear with my statement. I have a business still on the books. Im no longer taking on new work. I had to relocate to NC due to my wifes health. I now work fulltime in NC as an Operations Manager. My business in NY is still open because I still am collecting money owed from jobs and this lawsuit. It was a 650k job thst was public works so it was bonded. The bond company went belly up after the lawsuit started. Not NYS Surety insurance fund involved. If the suit goes to court I cant afford to fight it. The NYS Surety Fund is going to want me to indemnify them. This is the only reason I would need bankruptcy protection. Is this better? Thanks

Expert:  Phillips Esq. replied 1 year ago.

Thank you for the information:



Sorry. Im wasnt clear with my statement. I have a business still on the books. Im no longer taking on new work. I had to relocate to NC due to my wifes health. I now work fulltime in NC as an Operations Manager. My business in NY is still open because I still am collecting money owed from jobs and this lawsuit. It was a 650k job thst was public works so it was bonded. The bond company went belly up after the lawsuit started. Not NYS Surety insurance fund involved. If the suit goes to court I cant afford to fight it. The NYS Surety Fund is going to want me to indemnify them. This is the only reason I would need bankruptcy protection. Is this better? Thanks


Response: Bankruptcy would be helpful if you have finished collecting all the money due to the business and you now want to file for Chapter 7 to liquidate the business and then once the bankruptcy case is concluded to file for dissolution of the company with New York Secretary of State's Office. However, if it is not possible at this time to close the business because you still have payments coming in, then you may consider filing Chapter 11. However, Chapter 11 is a reorganization Chapter and not a liquidation Chapter. So, you are still going to have to come up with a plan to pay for your debts including the 650k Judgment. If the plan is not feasible you would be forced to liquidate your business and force to convert to Chapter 7. Otherwise, your Chapter 11 would be dismissed.

Customer: replied 1 year ago.

Ok. Having said that. I would have to file chapter 7 for personal because my bond is attached to me personally. What does the state leave me with in the event that this lawsuit leaves holding this debt? Would this bankruptcy be in NC or NY?

Expert:  Phillips Esq. replied 1 year ago.

Ok. Having said that. I would have to file chapter 7 for personal because my bond is attached to me personally. What does the state leave me with in the event that this lawsuit leaves holding this debt? Would this bankruptcy be in NC or NY?



Response: Bankruptcy would be in North Carolina where you are currently residing. Click on the link below to see North Carolina Exemptions:


http://www.nolo.com/legal-encyclopedia/north-carolina-bankruptcy-exemptions.html

Customer: replied 1 year ago.

Last question. Is it possible, because there no possible way to collect, that NYS Surety would not seek damages from me if I do not have assets even a fraction of what they seek? Between money and assets I would only have basically 50k. Im in new territory in this matter. Would there be a way possible for me to avoid bankruptcy like that, I realize it would be out of my control.

Expert:  Phillips Esq. replied 1 year ago.
Last question. Is it possible, because there no possible way to collect, that NYS Surety would not seek damages from me if I do not have assets even a fraction of what they seek?


Response 1: Regrettably, no. If your personal obligation on the debt has not been discharged in bankruptcy, the Surety would still attempt to recover the debt.

Between money and assets I would only have basically 50k. Im in new territory in this matter. Would there be a way possible for me to avoid bankruptcy like that, I realize it would be out of my control.



Response 2
: I do not see a way for you to come out of this without seeking bankruptcy protection, unfortunately.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12957
Experience: B.A.; M.B.A.; J.D.
Phillips Esq. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.

Well its not what I wanted to hear, but thank you for your honesty. Hopefully it doesnt come to that. Have a great day.

Expert:  Phillips Esq. replied 1 year ago.
You are quite Welcome!


All the best

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