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Maverick
Maverick, Lawyer
Category: Real Estate Law
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Experience:  20 years professional experience
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Hey, I am going to let a rental property I am upside down in

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Hey, I am going to let a rental property I am upside down in foreclose. The note is in my personal name not the business. Can the bank come after the assets of another sub-s corporation I own? If yes, how can I protect these sub s assets and my home?
Submitted: 5 years ago.
Category: Real Estate Law
Expert:  Maverick replied 5 years ago.

Welcome to Just Answer! My name isXXXXX very much enjoy what I do and I hope that you will benefit from this information.

 

Unfortunately, the bank can seek a deficiency judgment against you non exempt assets and try to garnish your bank accounts and wages. The stock you hold in the S corporation is an asset that the creditor can obtain a charging order in and sell for market value of the shares in order to obtain money for the debt. Also, GA only allows you to exempt 10k in equity in your home, so , yes, your house is at stake also.

 

You may want to consider filing a chapter 13 bankruptcy and applying what is called a "cram down" on the rental. The BK court should allow you to shave the debt on the rental down to match the FMV of the rental. This will lower your payments and the chapter 13 will allow a 3-5 year payment plan to pay back arrears.

 

 

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Customer: replied 5 years ago.
Hey, I did accept your answer and thanks. If I made my sub s corp an LLC could they still come after its assets? Can I sell my LLC to my son and have them not come after it? Really looking for a way to get out of this property. The bank should never have let me make the deal.
Expert:  Maverick replied 5 years ago.

The interest that you hold in an LLC or a corporation can be made the subject of a charge order. Creditors sometimes do not spend the time and money to discover that you have such an interest, but it may show up on your tax returns which they can get from you in discovery.

 

There are a number of ways to try to protect yourself but at this stage of the game, any transfer is subject to a fraudulent conveyance attack and the creditor can ask the court to undo the transfer.

Customer: replied 5 years ago.
Hey Maverick. On this rental property: I am due to renew the note. They are going up from 6.25% fixed to a 7.25% variable rate. Would renewing the note and then not paying buy me more time. Sorry if that sounds stupid.
Expert:  Maverick replied 5 years ago.

It may, not really sure what the terms of the renewal process may involve but it may extend the process a month or two.

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