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What kind of debt are you attempting to settle?
I have been working to settle my credit card debts. At the time I began this process, I had very low income. I am an Acupuncturist. I have worked these past 2-1/2 years to increase my practice and my income. A recent court document came to me from one of my creditors. It asks for income information such as pay stubs, tax returns, etc. This is when the problem arises. I have my own personal account, my business account, and I am a co-signer for my father's account. What do I report? I want to be able to settle my debt as soon as possible. I don't want to have any issues with my Dad's account if at all possible. I am not sure how to report my income. Do I give them a P&L statement or Balance Sheet? It's very confusing and scary. Doris
OK. First things first. Is your business incorporated under Washington law?
As you have received a court document, I am assuming you are aware that one of your creditors has sued you.
Is it only a single credit card company that has filed suit, or is it more than one?
Only one. FIA Card Services.
OK. And is this particular account a personal credit card, or was the credit card opened up under your business?
Personal Credit Card, under my name.
The document sent to you is requesting that you produce financial information. Since the credit card is your personal account, you only need to provide information which is pertinent to you personally.
This means that there is no need to provide your business information.
Do you pay yourself a salary?
Yes, I just recently began paying myself a salary. About $925.00 per week. I save 15% for the tax man.
How wide is the date range for which they are requesting that you produce documents?
2 tax returns, which I have. last two pay stubs. last 2 months' back statements.
Can you type out for me the exact request that they are asking?
1. Information as to employment including copies of your last two (2) paystubs. (This also applies to any second or part-time employment in which you are presently engaged).2. A list of all bank accounts on which you are a signer including copies of the last two (2) bank statements for each account.3. Copies of your last two (2) tax returns.4. A list of all property in which you have any interest including houses, vacant lots, business lots, farms or any other real property.5. Information at to any transfer or sale of any real or personal property since the judgment was entered (09/22/11).6. The make, model, year, serial number and license plate number of every vehicle and vessel you have an interest in and the names and addresses of any lien holders thereon.7. A complete list of all assets that you own . . .
Ok. I'm going to go through these one at a time withyou
1. Since you have been paying pay stubs,
produce those. You need to type out a document and it will read like this:
Actually...before I start that.
Can you tell me the name of the document?
Is it entitled "Requests for Production"?
No. Documents and Information You Must Bring to Supplemental Proceedings.
Ok...that changes things
So, for No. 1, bring your pay stubs
For No. 2, list your personal account and your business account, but not your father's account.
You will have to disclose that you own a business, so the court will understand that there is a business account
However, because you are incorporated, this won't be subject to the judgment.
But the court can still know abou it.
Even if my company is a LLC?
It's asking for bank accounts on which you are a signor. The court may "discover" (ie have you tell them about it), but this does not make that account liable to pay a debt you owe personally
Are you the sole member of the LLC?
Ok, that means that the court will want that information. However, you need to be sure that when the business bank account comes up, you explain to the court that this is a business account belonging to the LLC to which you are a signatory, and it is used for business purposes only.
No. 3, you said you had the tax returns, so go ahead and bring those.
No. 4, simply list out the property. So if you own a house or any real estate, list that.
If you own a car, you need to list that (only if you actually have the title to it)
And if you own any other substantial piece of property (mobile homes, RVs, tractors, pianos, etc), then you need to list those.
No. 5 - have you made any transfers to which this might apply?
That would mean selling a piece of property or changing the title to a piece of property.
Is there anything that No. 5 would apply to?
Not really. I don't have much in liquid assets other than my business furniture. Most of that I find on the cheap, i.e. less than $50.00. I cashed out my retirement fund before I began this process. I think it was 2008.
Ok...Nos. 4-7 do not apply to any assets which your business owns.
So if you have a car that the business bought, this is not an asset that you technically have an interest in. The LLC would have the interest in it, and you have an interest in the LLC.
Same for the furniture and other office equipment
So you don't have to list those
I do have 2 Japanese-style swords, one modern and one antique. Together they are worth about $3,500. Would I list those?
No. 6 is a catch all. So, if you have any other substantial asset, such as a big diamond or something like that, then you should list that there. I would list the swords under this section.
Okay. So now I am pretty sure what I have to gather and have ready. Is there anything else I should know?
Just remember to stress that the business assets are not your personal assets. You should probably bring your LLC documents with you to establish that the business is in existence and is a separate entity.
Other than that, it sounds like you are set. Is there anything else I can do for you today?
I just want to make sure that I don't have to bring any reports about the business such as P&L or Balance Sheet. Although I can certainly have them ready, it may not be to my advantage.
The list does not say that you are required to do that. I would not bring those. I would tell the court that you pay yourself a salary and that is all the money you are entitled to out of the business. If you bring the P&L statements, etc., you are divulging more than you should and may open a can of worms.
If the court later orders you to bring that information, you can do so then. However, in these types of proceedings, the court will likely not do that.
Sounds good. Thank you so much for all your help.
Thank you and good luck. If you are satisfied with my answer, please click "Accept".