Bankruptcy Law

Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.

Ask a Lawyer,
Get an Answer ASAP!

Bankruptcy Law

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

Customer Question
live. I have a business...
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. There is a C and S corp. I have a business partner. I would be filing personally, not just the business.

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' provided there is no contact between us for a sale in the future.

So I guess botXXXXX XXXXXne is that while I would like to 1. own the business and have him as an investor or partner and 2. Have the corporation filed under my name or both our names, 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: 5 years ago.Category: Bankruptcy Law
Show More
Show Less
Ask Your Own Bankruptcy Law Question
Answered in 6 minutes by:
3/7/2012
Bankruptcy Lawyer: cfortunato, Attorney replied 5 years ago
cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8,023
Experience: Bankruptcy professor.
Verified

cfortunato :

Hi JACustomer,

cfortunato :

You have Bankruptcy Law questions here in addition to Business Law questions. I can only answer your Bankruptcy Law questions, and you can have your Business Law questions answered in the Business Law section.

cfortunato :

Is this acceptable to you?

Customer:

Yes....

cfortunato :

If you file a Bankruptcy, any assets that belong to you will be subject to the Bankruptcy court - including any money your father lends to you. This is so, even though the money is a loan.

cfortunato :

You would only have to file a personal Bankruptcy if you personally guaranteed any of the business debts.

cfortunato :

In most cases, filing a business Bankruptcy serves no useful purpose if the business is closed or will be closing.

cfortunato :

This is because business debt is not dischargable - only personal debt can be discharged.

cfortunato :

I think this is what you wanted to know. If not, please let me know.

cfortunato :

Thank you.

Customer:

Hi....sorry for the delayed response.

cfortunato :

That is okay!

Customer:

My followup is that if I set up the corporation under my name and then the lease is under my name but he is just an investor in the sense of paying build out costs, equipment and other start up costs, but not per se loaning me money, is that an OK way to structure it that keeps is separate from AZ. I would like to set up the business as 'mine' on an official level but then again dont want something he invested in to end up garnished or frozen or taken as an asset or whatever.

cfortunato :

Are you asking what can be done if you do file a personal Bankruptcy or if you don't file a personal Bankruptcy?

Customer:

Other question that follows up that one is what if corporation and lease, bank account for corporation and all loans associated with the business, (equipment, etc) are under both our names

cfortunato :

The answer to that question would also depend on whether or not you are planning on filing a personal Bankruptcy.

Customer:

Do.... This is a long story so trying to ask I guess without giving you background. Long story short is had another business (chirpractic clinic) in AZ with same business partner that shut down and had loan payments remaining and we worked out payment plan (CIT and Wells Fargo) vs doing bankruptcy. Now, damn the luck, health insurance went to hell in AZ and this other clinic that was making enough to cover the agreed payback settlement is also having issues. There is 70K remaining to pay and I intend to pay it BUT there are the what-ifs so in the event I did have to personally bankrupt, I just dont want the business here in TX to be affected (well, acutally dont want my investor, my dad, to be affected).

Customer:

prob not as complicated as im making it but thaks for the help nonetheless.

cfortunato :

The only way the Texas business will not be affected by your Bankruptcy filing is to put the business in your father's name only.

cfortunato :

Otherwise, 1/2 of the assets owned by that business will be subject to the Bankruptcy court.

Customer:

Well that is the answer I didnt want to hear but figured I would! haha.

Customer:

Thanks for the help!

cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8,023
Experience: Bankruptcy professor.
Verified
cfortunato and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Bankruptcy Lawyer: cfortunato, Attorney replied 5 years ago
You're welcome!
Ask Your Own Bankruptcy Law Question
Ask cfortunato Your Own Question
cfortunato
cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8,023
8,023 Satisfied Customers
Experience: Bankruptcy professor.

cfortunato is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

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

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.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, 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!!

ElaineAtlanta, 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.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Terry L.

Terry L.

Attorney

2,679 satisfied customers

Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

cortrightlaw

cortrightlaw

Attorney

511 satisfied customers

Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.

JoeLawyer

JoeLawyer

Attorney

376 satisfied customers

Attorney in the practice of Bankruptcy Law since 1996

A.J.

A.J.

Attorney

262 satisfied customers

Experienced consumer bankruptcy attorney.

Fritz

Fritz

Attorney

209 satisfied customers

Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases

Law Girl

Law Girl

Attorney

153 satisfied customers

I am an attorney.

Paul K, Esq.

Paul K, Esq.

Attorney

141 satisfied customers

10 years Exp., Great customer service, Prompt responses.

< Previous | Next >

Related Bankruptcy Law Questions
I filed for personal Bankrupcy Ch 7 and got discharged in
I filed for personal Bankrupcy Ch 7 and got discharged in Jan 2017(in Illinois) I need a proof of my Bankrupcy to use in my native country.How can I get an official,notarized,stamped confrimation of m… read more
DrakeLAW
DrakeLAW
Juris Doctorate
975 satisfied customers
I have a home witth an sba lien from a commercial loan done
hi i have a home witth an sba lien from a commercial loan done by hunington bank, i closed the business after filing a chapter 11 on it in october of 2016 myt home was cross colatoralized and now has … read more
Amadeo Rivera
Amadeo Rivera
JD
82 satisfied customers
I had a hearing in bankruptcy court- does this mean I wasn't
I had a hearing in bankruptcy court- does this mean I wasn't supposed to defend myself against the one who called for the hearing?… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I am considering filing a chapter 7 personal bankruptcy. I
I am considering filing a chapter 7 personal bankruptcy. I know some years ago there were some changes in the bankruptcy laws. What I need to know, first of all, is how much money can be retained in a… read more
LegalGems
LegalGems
Juris Doctorate
10,698 satisfied customers
My california based business had to close down due to
my california based business had to close down due to loosing the lease. in addition to the store front that closed, i also own a food truck. right now, we have about 50,000 oustanding loan from small… read more
LawTalk
LawTalk
Attorney at Law
Juris Doctor
3,065 satisfied customers
I filed personal bankruptcy chapter 7 in 2011 and chapter 13
I filed personal bankruptcy chapter 7 in 2011 and chapter 13 in 2012. I receive a discharge for chapter 7 in 2012 and paid off my chapter 13 obligation in 2016. I did not not receive a discharge in th… read more
DrakeLAW
DrakeLAW
Juris Doctorate
975 satisfied customers
I received a letter from the united states bankruptcy court
i received a letter from the united states bankruptcy court southern district of new york … read more
Barrister
Barrister
Attorney/Landlord/Realtor
Doctoral Degree
35,316 satisfied customers
Personal Bankruptcy Chapter 7 in Florida, owner of a
Personal Bankruptcy Chapter 7 in Florida, owner of a one-person S-Corp services business. In filing Ch 7 (Personal) BK I understand I will relinquish all non-exempt personal assets. Question is on S-C… read more
DrakeLAW
DrakeLAW
Juris Doctorate
975 satisfied customers
I am in need of filing a chapter 11 personal bankruptcy due
I am in need of filing a chapter 11 personal bankruptcy due to abnormal circumstances … read more
DrakeLAW
DrakeLAW
Juris Doctorate
975 satisfied customers
I understand in personal bankruptcy this cannot be done, but
I understand in personal bankruptcy this cannot be done, but In a business to business environment, is it legal to publicize debtors who have filed bankruptcy, such as the company name, principals & a… read more
INFOLAWYER
INFOLAWYER
Partner
Doctoral Degree
56,287 satisfied customers
I am wanting to know if filing a business bankruptcy where I
I am wanting to know if filing a business bankruptcy where I have multiple judgments will that affect my general contractors license … read more
Ray
Ray
Lawyer
Doctoral Degree
30,854 satisfied customers
Bankruptcy court trial hearing Brief needed. I am a
Bankruptcy court trial hearing Brief needed. I am a Creditor, already finished a Rule 2004 exam on Debtor, out of court. I must file brief and exhibits by this Friday.… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
In personal bankruptcy, what can they take? If you have a
In personal bankruptcy, what can they take? If you have a house and a lot of little things in the house like furniture, clothes, books, etc. All the personal things people normally have that wouldn't … read more
Rovena Andoni
Rovena Andoni
Juris Doctor
10 satisfied customers
BUSINESS BANKRUPTCY ATTORNEY ONLY: Can debts in an LLC
BUSINESS BANKRUPTCY ATTORNEY ONLY: Can debts in an LLC partnership filing taxes as a Sub-S be discharged in a Chapter 7? If one of the two equal partners withdraws a large sum of money to pay his own … read more
DrakeLAW
DrakeLAW
Juris Doctorate
975 satisfied customers
If you file for personal bankruptcy in Florida and you own a
If you file for personal bankruptcy in Florida and you own a corporate asset, is that corporate asset considered separate from your personal assets? In other words, is it safe from being taken? Also, … read more
LawGuy
LawGuy
Juris Doctor
123 satisfied customers
I live in California For bankruptcy court. What documents to
I live in California For bankruptcy court. What documents to I have to present for a valid Prenuptual agreement?… read more
DrakeLAW
DrakeLAW
Juris Doctorate
975 satisfied customers
How can you file for personal bankruptcy (chapter 7 or 13)
How can you file for personal bankruptcy (chapter 7 or 13) more than every 8 years? Is this possible?… read more
Roger
Roger
Litigation Attorney
Doctoral Degree
26,868 satisfied customers
Can the bankruptcy court put our house up for sale when we
Can the bankruptcy court put our house up for sale when we didn't complete the bankruptcy courses after court?… read more
CalAttorney2
CalAttorney2
Attorney
Doctoral Degree
8,845 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x