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Hi. I am starting a new small business in Texas where I now…

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Hi. I am starting a...
Hi. I am starting a new small business in Texas where I now live. I have a business in Arizona where I moved from. It is unfortunately not doing well now and I may need to file bankruptcy on it. To help get my business going quickly in Texas (so possibly can avoid BK in AZ by covering loan payments), my dad is willing to invest part of the start up so I dont have to take the time to find a lender.

Questions:
If he loans me money and it is in my account to use while starting new business and I BK on the other in AZ, then would that money be frozen once accounts are frozen when filing?

I many need my dad's name as cosigner on new TX lease just secondary to debt. Could he get wrapped up in the AZ bk in any way?

Should I just put the entire TX business (LLC and lease) under him and just work for him?
Is that 'cleaner'.

So I guess botXXXXX XXXXXne is I don't want him to in any way possibly become liable for anything in AZ while he is helping me get business going here in TX.

Thanks.
Submitted: 6 years ago.Category: Bankruptcy Law
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3/7/2012
Bankruptcy Lawyer: Richard, Attorney replied 6 years ago
Richard
Richard, Attorney
Category: Bankruptcy Law
Satisfied Customers: 57,226
Experience: Attorney with 29 years of experience.
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Good morning. What is your business structure in Arizona....sole proprietorship, LLC, corp, etc.? And, are you filing bankruptcy only for the business itself? Thanks.
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Customer reply replied 6 years ago
Morning! I have an S and C corp and a business partner as well in those at 50% ownership. We would be filing personally if we had to go that route.
Bankruptcy Lawyer: Richard, Attorney replied 6 years ago

Thanks. If you would be filing personally, then you would want your dad to own this new business and you can work for the new business. Then, when all the bankruptcy stuff is behind you, you can then arrange for ownership from your dad, but you do not want any pre-arranged agreement.

 

 

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Richard
Richard, Attorney
Category: Bankruptcy Law
Satisfied Customers: 57,226
Experience: Attorney with 29 years of experience.
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Customer reply replied 6 years ago
Hi.
Thaks for the help on this. I will attemp to go the cleanest route of that my Dad owns it and I simply work for him with nothing but employment contract and no future transfer contract.

A follow up to that I do have money to invest in the business, and to live on while it gets going, that would be needed. Some from an account and some from an investment property I can sell. I just dont want to have it sitting in an account and lose it if I can put it into the business.

Would that be an acceptable way to use my own funds that doesnt look fraudulent if say 4 months later I am filing for bankruptcy.
Bankruptcy Lawyer: Richard, Attorney replied 6 years ago
If you invest in the business, you should get something in return that will be an asset in any bankruptcy. What I would suggest you do is prepay a bunch of your expenses.
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Customer reply replied 6 years ago
By that you are referring to personal expenses that are acceptable such as student loans or tax debt verses something that would be used in the business or at least show a tie to 'investing' in the business.
Bankruptcy Lawyer: Richard, Attorney replied 6 years ago
Unfortunately, I'm not a bankruptcy expert, so you would need to address specific questions relating to bankruptcy in a new post in the bankruptcy category. I'm sorry!
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