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RONB-ESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 357
Experience:  Right of Way Manager at Access Midstream Partners, LP
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I am sole owner of c corp. I was told I could be forced to

Customer Question

I am sole owner of c corp. I was told I could be forced to sell assets to pay off personal bankruptcy creditors. the c corp is my only means of income. Anyway to protect my corporate assets
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  RONB-ESQ replied 1 year ago.

Hello my name is ***** ***** I am a licensed attorney. I welcome you to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. The question and response may be viewed by other parties as noted in JA’s terms of service. By continuing, you confirm that you understand and agree to these terms.

The troubling part for me is sometimes I have to tell people an answer they don’t want to hear and I hope that you will not shoot the messenger by giving me negative feedback as I work hard to provide you a legally accurate answer. Negative feedback is reserved for those experts that provide incorrect answers or are rude to customers. Please rate me based on the legal accuracy of my answer and my professionalism in dealing with you. I feel I have a professional obligation to provide you the most accurate answer I can even if it is not what you want to hear so that you understand your rights and can act on those rights.

If you own 100% of the C Corp then it is an asset the trustee in a chapter 7 case can take and try to sell or ask you to buy it back from him. One of the trustees here where i am always used a business valuation person who always put a high value on the business and he might say if you wish to enter an agreement to pay me $50,000 over 2 years then you can keep it. It all depended on the client, but if you provide personal service they can't force you to work and I would bluff the trustee at times by just saying you can have a single member Corp and the guy everyone wanted won't be there anymore. I would usually negotiate the price down considerably or just give it to trustee and it was not unheard of to later have trustee indicate he was abandoning the asset (comes back to you. ) If you have a business with client list that is making money selling widgets then none of this will apply as that is the kind of business someone might buy from him at a steep discount.

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Expert:  RONB-ESQ replied 1 year ago.

So you know the same holds true outside of bankruptcy. A corporation shields you from liability from your employee killing someone in a wreck, but since you are the single owner if a creditor sues you once they obtain a judgment they can execute against the assets of the business including accounts receivable, etc.