How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask MShore Law Your Own Question
MShore Law
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
17924466
Type Your Business Law Question Here...
MShore Law is online now
A new question is answered every 9 seconds

I have a company now that will never be able to pay the taxes

This answer was rated:

I have a company now that will never be able to pay the taxes and back debt it has. It is hard to get new work because of it. I would like to start another company and start fresh
and either close, dissolve or file bankruptcy but do not want creditors to be to come after new company. Any advise.?
Thank you for the post, I am happy to assist you by answering your questions. Is the structure of your company a single member LLC or Inc?
Customer: replied 4 years ago.

C corp

Thank you Peter, did you personally guarantee any of the debts?
Customer: replied 4 years ago.

Unfortunately yes.

Thank you, XXXXX XXXXX create a new company would you require credit approval to do so? Also, how much do you value you personal credit? I ask because you could file corporate and personal bankruptcy seeking to discharge the private debts (you cannot always discharge tax debt in bankruptcy, we can discuss this further).
Customer: replied 4 years ago.

My personal credit is ruined now. I only care about keeping my house which the mortgage is under water anyways. The only asset the existing company would have is myself and some tools . I do not believe at this point it would be worth anybody coming after either one. The IRS would agree that I would not be able to pay the back taxes in my lifetime.


If I dissolve the company would that still make me liable for the debts personaly?


 


I need to work but whatever I make goes to pay back debts. I will never be able to catch up at this point without makeing changes.

Thank you Peter, and know that I really sympathize with your situation. If you dissolve the company, the company's creditors would have to pursue you personally for the debts, but if you file bankruptcy to discharge such debts, that would give you the fresh start I believe you are looking for, from your description you would consider chapter 7 or chapter 13 (the latter if you would like to save your home). Chapter 7 offers the most complete discharge and in turn the clean slate allowing your to start over however. Please let me know if you have any follow up questions.
Customer: replied 4 years ago.

I have liens filed on my home from creditors. My mortgage is $100,000.00 more than the appraised value of my house so i don't know for sure how it works but it would worthless for any to foreclose on the liens. Would my best bet be to open another company so I can work and make some money and then try to negoiate the back debt. I would imagine creditors would have to find it and that could take a while.


Your opion or advise would be appreciated.


 


Thank you,

You are correct that creditors would have to first locate the new company to pursue it for debts attached to the current company, and even if they find the new company because the two are technically separate entities they could not readily attach the assets of the second company. Particularly difficult would be it be for creditors if you created the new company in a state that allows for anonymity with respect to the business ownership. Three states that allow this are DE, WY, and NM. Please let me know if you have any follow up questions.
MShore Law and other Business Law Specialists are ready to help you

Related Business Law Questions