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Second opinion] Would bankruptcy be a good solution to halt…

Second opinion] Would bankruptcy be...
Second opinion] Would bankruptcy be a good solution to halt a suing opponent from trying to pierce the corporate veil against my LLC? Specifically they are trying to serve a Subpoena to provide my LLC banking documents.
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Customer reply replied 7 months ago
I plan on dissolving my LLC as soon as possible also since I barely could scrape up a living at it.
Customer reply replied 7 months ago
My opponent was awarded a judgement against my LLC this year for 10,000 plus attorneys fees. Ridiculous how little justice there is for small business. All cause I failed to show up to court.
Customer reply replied 7 months ago
I usually give 5 stars but the last guy pencil whipped my answer and didnt address the specifics. Maybe I rated too quickly? I don' twant to be labeled a person who rates poorly. fyi
Answered in 29 minutes by:
12/25/2017
Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Business Law
Satisfied Customers: 22,721
Experience: B.A.; M.B.A.; J.D.
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Hello: This isCustomer Welcome to JustAnswer! I am reviewing your post, and I will post my response very shortly. Thank you for your patience.

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[Second opinion] Would bankruptcy be a good solution to halt a suing opponent from trying to pierce the corporate veil against my LLC? Specifically they are trying to serve a Subpoena to provide my LLC banking documents.

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Your Question:

[Second opinion] Would bankruptcy be a good solution to halt a suing opponent from trying to pierce the corporate veil against my LLC? Specifically they are trying to serve a Subpoena to provide my LLC banking documents.

Response: Yes. With the bankruptcy filing, all collection activities are suspended. Also, the debts are now part of the bankruptcy case and assets of the business are now controlled by the Chapter 7 Trustee. The Judgment Creditor would have to file Adversary Proceeding to object to the dischargeability of the debt and then to proceed with collection action. This is a trial within the bankruptcy forum and and it is quite expensive. The Judgment creditor may not wish to file the Adversary Proceeding and more importantly even if filed there is no guarantee of success. Best wishes and Happy Holidays! <p style="margin-top:2.5pt;margin-right:0in;margin-bottom:2.5pt;margin-left:
0in;line-height:12.5pt">A positive rating to my response is appreciated so that I can receive credit for responding to your post. There is no additional cost to you for giving a positive rating. <p style="margin-top:2.5pt;margin-right:0in;margin-bottom:2.5pt;margin-left:
0in;line-height:12.5pt"> Thank you for your cooperation.
Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Business Law
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Customer reply replied 7 months ago
Thanks for your answer. One more important question. If the bankruptcy trustee sees that I took 17,000 out of the business account and put it into my personal account, which I have since used to purchase parts on a job, could this come to light for the ensuing attorney? AND, Thereby negating the reason for bankruptcy protection because now they will go after me personally?

I am sorry, but I do not understand who you referring to as "ensuing Attorney."

Kindly clarify.

Thank you for your cooperation.

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Customer reply replied 7 months ago
I'm sorry, I meant my opponent that is suing me. or the debt collector.

Thank you for the information.

Kindly give me a few minutes to prepare my response.

Thank you for your patience.

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When did you take this money out of the business account?

You said that you have since used the money to purchase parts for a job. Is that a job related to the LLC?

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Customer reply replied 7 months ago
I took 17,000 out of the business account 3-4 weeks ago, and I used 10,000 of it for job parts, worth of job parts, and I have been living off of the rest. I did this because they have a 10,000 judgement against my business and I was afraid they might take the money out of my business account. (There is only 5000 left in my personal account which I plan on using to hire a lawyer for bankruptcy, and living on).
they dont know what I used the money for it only shows it on my personal account, so im hoping that by filing bankruptcy this will all go away.
I was thinking about reporting that that money is owed to me personally because I havent taken any money out of the business for leasing my personal truck, or my home office space in several years, because there usually is never enough money in the business account to repay me for the use of my personal truck and office space.
Customer reply replied 7 months ago
I dont mind if i have to give a couple thousand back from my personal, but if the debt collector comes after me personally because the bankruptcy trustee somehow exposes this, then the point of filing a bankruptcy for my LLC is useless.
Customer reply replied 7 months ago
Or would they not have taken any money out of my business account and I should have left it all in there? I don't know.
Customer reply replied 7 months ago
Take your time, I know its Christmas. I will be working on a solution this next week.

Thank you for the information.

The Chapter 7 trustee may ask you to return the money, if the Chapter 7 trustee discovers the missing funds from your LLC.

As for the Judgment creditor, he has no say because the Chapter 7 Trustee would have control of your assets and debts after you have filed for bankruptcy protection. However, if the Judgment Creditor tries to go after you personally, then you may consider also filing for a personal Chapter 7, if you are eligible to wipe out the debts.

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Customer reply replied 7 months ago
oh thats too bad. The job costs over 10,000 in parts and 4000 in shipping, When you consider that I have barely made $30,000 this entire past year. I will only make 3500 after job expenses. so there will be no more money to give back especially if i hire an attorney. I actually have been bankrupt this entire year but didnt have enough profit to hire an attorney. (customers dont want to hire an attorney when they buy my product.
(I cannot file personal bankruptcy because i already did in 2012 so i have to wait 6 more years).

Oh, I see.

Then, you need to be prepared to show to the Trustee how the money taken is part of your earnings. However, this may not even come to pass, but I have to give you the worse case scenario.

Bankruptcy Trustees are nothing but debt collectors. The more they can collect from the estate, the better their compensation. So, you need to be aware of that.

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Customer reply replied 7 months ago
Good info. I plan on dissolving my llc after the holidays. The debt may go away against my business but I think they can still subpoena my bank records. Correct on both?

If your LLC is officially dissolved and the associated bank accounts closed, I am not sure what the subpoena would be for at that point.

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Customer reply replied 7 months ago
Im sure they are trying to see if I used the business account for personal. Piercing the corporate veil. Isn't that the reason for subpoena bank records on an LLC?
Or are you saying we found the solution?

I am not saying such thing. I am just wondering why your LLC bank account would be subpoenaed if the LLC is no longer in business. LLC record would be subpoenaed to see if the LLC has funds to pay for the Judgment and not specifically to pierce the corporate veil.

Also, with regard to piercing the corporate veil that should have been done in the initial action and not after by naming both you and the LLC as the defendants and by conducting proper discovery requests.

I in any event, this is final comment on this thread.

Best wishes,

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Customer reply replied 7 months ago
Thanks so much. I am wiling to pay more to get to a solution. The subpoena was delivered by mail a week ago. I have 2 weeks to respond assuming I was properly served which isnt the point at this time. If I close the business bank account and dissolve my corporation would that be sufficient for this to end? If so why didn't we just start there?

If I close the business bank account and dissolve my corporation would that be sufficient for this to end?

Response 1: It may not end there. The Judgment creditor may go after you for fraudulent transfer if subpoenaed documents show withdrawals from the account during the time the lawsuit was filed or Judgment was obtained in the case.

If so why didn't we just start there?

Response 2: This question is moot. However, I will address it. You specifically asked a bankruptcy question. I cannot answer questions that have not been asked and give provide strategy for you because that is the service provided by your Attorney. The disclaimer that every site user sees specifically states that Attorneys on the site are not your Attorneys and cannot act as such.

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