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AlexiaEsq.
AlexiaEsq., Managing Attorney
Category: Consumer Protection Law
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Experience:  19+ Years of Legal Practice in Consumer Protection.
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I just recently, less than a week, had a student loan judgement

Customer Question

I just recently, less than a week, had a student loan judgement against me and want to get some knowlegde and advise on what asset(s) they can attempt to take and the limits.

For example Personnel bank account rather than business bank account (even though I own the business). Your personal automobile versus your business automobile. Currently I don't own a home, but I live in Florda and I believe in Florida they can not come after your home.

Thank you
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  AlexiaEsq. replied 1 year ago.
Hi, my name is XXXXX XXXXX I thank you for your inquiry. I have been practicing Consumer Protection law for 19 years and look forward to assisting you.

I just recently, less than a week, had a student loan judgement against me Ouch, so sorry. I understand the excessive burden of high school loan balances and the struggle.

and want to get some knowlegde and advise on what asset(s) they can attempt to take and the limits. We are not permitted to provide legal advice, since I am not your lawyer. I may provide general legal information, however. As such, you provide a specific legal question, and I will provide legal information to answer that question.

For example Personnel bank account rather than business bank account (even though I own the business). Yes, a personal account can be levied...... A business account if owned by you can also be levied, regardless of whether you use it for business. If it were owned by a corporation, not by you, then it may have correlating protections.

Your personal automobile versus your business automobile. Again, if it is owned by YOU, it is attachable. If it is not owned by you, but by the business, it is generally not attachable. If it is you "DBA" or doing business as, which is not the same as a separate legal entity of a business, it is generally attachable. But remember that if you own the business, your interest in the business can be levied... which can then lead to the car. But for practical reasons, the lender may realize that to take your business from you means that the business FAILS (the type of business so personal to you that it can not run without you), that will likely not be a measure it would choose to take UNLESS the assets of that business more than pay for the debt owed.

Currently I don't own a home, but I live in Florda and I believe in Florida they can not come after your home.Yes, that is typically so although there are exceptions, such as pre-existing liens on the property, so in theory, if your judgment creditor gets a lien right after you buy your home, before you register your exemption, which I would do immediately upon purchase/residence.

Helpful link
(http://www.floridabar.org/tfb/TFBConsum.nsf/0a92a6dc28e76ae58525700a005d0d53/f1bc20015cfdb2e985257408005290ed!OpenDocument)

Your statute

(http://www.flsenate.gov/Laws/Statutes/2012/Chapter222/All)


I hope this helps! My goal is to provide you with excellent and accurate service – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions. Kindly rate me "excellent" when you are done. I look forward to assisting you in the future, should you have legal questions.

Sincerely,

Alexia Esq.

AlexiaEsq., Managing Attorney
Satisfied Customers: 11826
Experience: 19+ Years of Legal Practice in Consumer Protection.
AlexiaEsq. and 12 other Consumer Protection Law Specialists are ready to help you
Customer: replied 1 year ago.

I researched that in Florida you have a combine personal property exemption of 5k. That is, you can exempt both your car and personal bank account if they combined are under 5 k.

 

It also mentioned that usually they leave your car alone...unless it's a 30 k, etc. does that sound correct to you?

 

However, you have to file with the Court for these exemptions, correct?

 

I also researched that if you set up a LLC, I have my own business, and make yourself a signor on the account, it is basically attachment proof, correct:

 

If we have an LLC, wouldn't the assets of the business also be garnishment proof ?

 

Thank you very much!

 

 

Customer: replied 1 year ago.

Yes the business was (for a long time) incorporated, and I paln to incorparte again.


 


1. What is the best structure (LLC, S-corp, etc.) for legal protection against any type of personal judgement?


 


2. Is there more protection against attachment if the corporation has two or more owners, or is it just as safe if only one owner? Or does that even come into play?


 


3. Here's the situation with the home...my dad recently passed and it was willed to the siblings. however, i am in position to buy it from the other siblings. however the home does have a 2nd mortgage on it for 35K, the home is worth @ 250.000. Thoughts?


 


Thank you LOTS!!!

Expert:  AlexiaEsq. replied 1 year ago.

I researched that in Florida you have a combine personal property exemption of 5k. That is, you can exempt both your car and personal bank account if they combined are under 5 k. That is the combined $1k and $4k, yes. And, remember that if there is a car loan, that car is security, so that part is off limits as well.

 

It also mentioned that usually they leave your car alone...unless it's a 30 k, etc. does that sound correct to you? Yes, particular if it won't come near satisfying the debt.

 

However, you have to file with the Court for these exemptions, correct? Yes. And likely the Sheriff as well should receive your affidavit if exemption.

 

I also researched that if you set up a LLC, I have my own business, and make yourself a signor on the account, it is basically attachment proof, correct: LLC law changed in 2013, so you will want to review those changes (I have not, in any depth, yet). But generally, LLC, as a corporation, is a useful asset protection tool if a multi-member LLC (as of 2010), but a single member LLC does not get the same benefit. Also, remember, that if you are an owner of the LLC, your interest in it is still able to be levied, since it is your property. Here is a great article that show you where your protections lie, and where they do not.

 

If we have an LLC, wouldn't the assets of the business also be garnishment proof ? If properly drafted, yes, those assets can be protected in a multi-member LLC. But, YOUR interest/share of that LLC can still be levied. And charging liens can arise, although as you can see in the narrative linked above, there can be disadvantages to the creditor as well.

 

Thank you very much! You are welcome :)

AlexiaEsq., Managing Attorney
Satisfied Customers: 11826
Experience: 19+ Years of Legal Practice in Consumer Protection.
AlexiaEsq. and 12 other Consumer Protection Law Specialists are ready to help you
Customer: replied 1 year ago.

GOT IT.


Which business structure...LLC, S-corp, or others are the "best" to protect the business assets from attachment/attack from creditors?


 


I am planning to apply to form an LLC today online. then I plan on retaining attorneys & accountants to structure the corporation as they advise. If the business is set up as an LLC and later we are instructed to change to another structure - that can be done , correct?


 


Thank you

Expert:  AlexiaEsq. replied 1 year ago.
I understand (and you willl want to discuss this with an asset protection specialist) that an LLC and S-Corp provide the same level of protection - the S election has to do with tax treatment, not differing protection. This article may help you consider which type of structure you want. Also note that you may be able to have an LLC that is taxed like an S-corp, and if your set it up that way, you may not need to restructure it at all.

And yes, generally you can change from one to another.

Good luck.

And please feel free to direct any new question transactions to me by including in your header statement "To Alexia Esq. ONLY".

Have a terrific week!

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19+ Years of Legal Practice in Consumer Protection.