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 Zachary Your Own Question

Zachary
Zachary, Attorney
Category: Legal
Satisfied Customers: 3838
Experience:  Lead trial/International commercial attorney licensed 11 yrs
Type Your Legal Question Here...
Zachary is online now
A new question is answered every 9 seconds

I was the 100 % shareholder of 2 indiana corps in 2010 when

Resolved Question:

I was the 100 % shareholder of 2 indiana corps in 2010 when i received a judgement against me for their attorney fees of 50000 . In 2011 i awarded my wife 100 % shares of one of the companys & 99 shares on the other corp. I am not trying to hide this transaction ! The judgement is in my sole name only . So were the corperations at the time of the judgement . Can the corperations become liabily for this dept now ? Is there anyway that my wife can protect these corperations now ?
Submitted: 1 year ago.
Category: Legal
Expert:  Zachary replied 1 year ago.
Hi,

Thank you for your question.

When you transfer assets after a money judgment has been issued against you, it can trigger a law called the Fraudulent Transfer Act. The main provision at play here is:

IC 32-18-2-14
Transfers fraudulent as to present and future creditors
Sec. 14. A transfer made or an obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(B) intended to incur or believed or reasonably should have believed that the debtor would incur debts beyond the debtor's ability to pay as the debts became due.

If you are not going to pay the money judgment against you personally and you did not receive an adequate amount of compensation for the exchange of stock to your wife, then the transaction could be reversed.

Whether the company itself could become liable is probably not at play here. However, any transfer of assets to the company which violates the above-referenced section could also be reversed if discovered by the judgment creditor.

That being said, the transfer has to be discovered to be acted on. If you either settle the judgment or enter into a payment plan on it, you could protect your self against this ever becoming an issue.

Please let me know if you need further information.

-ZDN
Zachary, Attorney
Category: Legal
Satisfied Customers: 3838
Experience: Lead trial/International commercial attorney licensed 11 yrs
Zachary and 15 other Legal Specialists are ready to help you
Customer: replied 1 year ago.


so minus well say the 2 indiana corps are in my name only at this point as well as the judgement is in my name only . but i have to disclose all joint tax returns ? all joint bank accounts ? all joint properties owed ?that because these business 's are in my name only that any assets they have can be taken ?

Expert:  Zachary replied 1 year ago.
Because the judgment is against you personally, anything in which you have an interest in is subject except the following:

(1) Real estate or personal property constituting the personal or family residence of the debtor or a dependent of the debtor, or estates or rights in that real estate or personal property, of not more than fifteen thousand dollars ($15,000). The exemption under this subdivision is individually available to joint debtors concerning property held by them as tenants by the entireties.
(2) Other real estate or tangible personal property of eight thousand dollars ($8,000).
(3) Intangible personal property, including choses in action, deposit accounts, and cash (but excluding debts owing and income owing), of three hundred dollars ($300).
(4) Professionally prescribed health aids for the debtor or a dependent of the debtor.
(5) Any interest that the debtor has in real estate held as a tenant by the entireties. The exemption under this subdivision does not apply to a debt for which the debtor and the debtor's spouse are jointly liable.
(6) An interest, whether vested or not, that the debtor has in a retirement plan or fund to the extent of:

(A) contributions, or portions of contributions, that were made to the retirement plan or fund by or on behalf of the debtor or the debtor's spouse:
(i) which were not subject to federal income taxation to the debtor at the time of the contribution; or
(ii) which are made to an individual retirement account in the manner prescribed by Section 408A of the Internal Revenue Code of 1986;
(B) earnings on contributions made under clause (A) that are not subject to federal income taxation at the time of the levy; and
(C) roll-overs of contributions made under clause (A) that are not subject to federal income taxation at the time of the levy.
(7) Money that is in a medical care savings account established under IC 6-8-11.
(8) Money that is in a health savings account established under Section 223 of the Internal Revenue Code of 1986.
(9) Any interest the debtor has in a qualified tuition program, as defined in Section 529(b) of the Internal Revenue Code of 1986, but only to the extent funds in the program are not attributable to:
(A) excess contributions, as described in Section 529(b)(6) of the Internal Revenue Code of 1986, and earnings on the excess contributions;
(B) contributions made by the debtor within one (1) year before the date of the levy or the date a bankruptcy petition is filed by or against the debtor, and earnings on the contributions; or
(C) the excess over five thousand dollars ($5,000) of aggregate contributions made by the debtor for all programs under this subdivision and education savings accounts under subdivision (10) having the same designated beneficiary:
(i) not later than one (1) year before; and
(ii) not earlier than two (2) years before;
the date of the levy or the date a bankruptcy petition is filed by or against the debtor, and earnings on the aggregate contributions.
(10) Any interest the debtor has in an education savings account, as defined in Section 530(b) of the Internal Revenue Code of 1986, but only to the extent funds in the account are not attributable to:
(A) excess contributions, as described in Section 4973(e) of the Internal Revenue Code of 1986, and earnings on the excess contributions;
(B) contributions made by the debtor within one (1) year before the date of the levy or the date a bankruptcy petition is filed by or against the debtor, and earnings on the contributions; or
(C) the excess over five thousand dollars ($5,000) of
aggregate contributions made by the debtor for all accounts under this subdivision and qualified tuition programs under subdivision (9) having the same designated beneficiary:
(i) not later than one (1) year before; and
(ii) not earlier than two (2) years before;
the date of the levy or the date a bankruptcy petition is filed by or against the debtor, and earnings on the excess contributions.
(11) The debtor's interest in a refund or a credit received or to be received under the following:
(A) Section 32 of the Internal Revenue Code of 1986 (the federal earned income tax credit).
(B) IC 6-3.1-21-6 (the Indiana earned income tax credit).
(12) A disability benefit awarded to a veteran for a service connected disability under 38 U.S.C. 1101 et seq. This subdivision does not apply to a service connected disability benefit that is subject to child and spousal support enforcement under 42 U.S.C. 659(h)(1)(A)(ii)(V).
(13) Compensation distributed from the supplemental state fair relief fund under IC 34-13-8 to an eligible person (as defined in IC 34-13-8-1) for an occurrence (as defined in IC 34-13-8-2). This subdivision applies even if a debtor is not domiciled in Indiana.


In regard to any tax refund, if it is joint and it is also owed to your wife, then you must make sure that you have it deposited into your wife's independent bank account.

Now, when you say disclose, I'm not sure what you mean. Are you answering discovery requests about your assets?
Customer: replied 1 year ago.


yes , you seem to really know alot about this kind of civil suit in which im really glade ! pretty much i have to produce any joint bank accounts & it seems that the business is not protected just because they are corporations doesnt matter because they both are considered in my name only because ownership was given to my wife ? My wife earned it because since the day i incorperated shes been by my side working . then the homes we bought over the years we were told by our accountant to incorperate for protection & tax reasons . I beleived the judgement for attorney fees of 50000 was crazy when i spent under 13000 & have had 3 different attorneys with this case . so the corporate vail can be pierced so to speak ?

Expert:  Zachary replied 1 year ago.
Hi,

Thanks for clarifying.

The discovery requests that ask about anything that is not limited to your personal assets should be objected to on the grounds that it is overly broad and seeks irrelevant information. So, you object to these requests and refuse to produce the information unless ordered by the court. Especially in regard to your corporation's assets and your wife's separate assets and confidential information. Produce the information only about yourself.

That being said, they are entitled to discover the transfer of the stock and may seek to have it cancelled.

Any asset that has been transferred from you personally into the corporation may be taken back too through a fraudulent transfer act claim if it meets the standard stated above.

As far as the value of the corporation itself, they may be able to get to it as well because you are the owner. Piercing the corporate veil in this situation doesn't really apply. That's the other way, when the corporation is sued and the plaintiff wants to get to your personal assets too. Since you have a personal interest in the corporation (or used to) by being the 100% owner, they could take the stock, and then they become owner of the corporation.

Zachary, Attorney
Category: Legal
Satisfied Customers: 3838
Experience: Lead trial/International commercial attorney licensed 11 yrs
Zachary and 15 other Legal Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Not only did he answer my Michigan divorce question but was also able to help me out with it, too. I have since won my legal case on this matter and thank you so much for it. Lee Michigan
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    19941
    Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    8189
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/jespoag/2008-12-17_222355_jessepic.jpg JPEsq's Avatar

    JPEsq

    Attorney

    Satisfied Customers:

    2132
    Experience as general attorney, in house counsel, SSDI, Family Law attorney, and law professor
  • http://ww2.justanswer.com/uploads/gsenmartin/2008-04-22_214950_me1.jpg Guillermo J. Senmartin, Esq.'s Avatar

    Guillermo J. Senmartin, Esq.

    Attorney

    Satisfied Customers:

    110
    7+ years of experience handling various legal matters.
  • http://ww2.justanswer.com/uploads/PA/PaulmoJD/2013-10-10_195858_JAImage.64x64.jpg Law Educator, Esq.'s Avatar

    Law Educator, Esq.

    Attorney

    Satisfied Customers:

    31621
    JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    15975
    Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.