Business Assets

[confusedinfl]

I hope to be able to file Chapter 7 at the beginning of August. My income has been so low for the last five months due to selling part of my business and other life changes and I would like to reaffirm my house. I am scared that a trustee won't allow that unless I can bring my income up a little bit.

I have one creditor, a judgment creditor, who is being pretty aggressive with collection. Her attorney has filed a lis pendens (I guess that's a lien) on the house (even though there is no equity in it). They have also issued a summons related to this lis pendens although I have been out of town and it was not served at it was returned to the attorney. I have no idea what the summons was for and I'm freaking out that I will be arrested or something when I get back into town.

Also, the only asset I have at this point other than a minimal amount of household goods (exempt) and retirements funds (exempt) is a laptop computer that belongs to the business (an s-corp of which I am 100% shareholder). Is there any way that they can seize the business asset based upon their judgment on me personally?

[Rover]

The judgment creditor is probably trying to get you into court to answer questions about your assets. After a creditor gets a judgment and the judgment is not paid, the next step is to issue a set of interrogatories (questions) through the court to discover the debtor's assets that can be used to pay the judgment. If you have no non-exempt assets, you're OK -- nothing can be attached.

With regard to business assets, if the business is a closely-held corporation, a sole-proprietorship or a partnership, your interest in the business can be attached by the judgment creditor.

If the business is an LLC (limited-liability corporation), the business assets cannot be attached. That's one of the major benefits of an LLC.

[Rover]

BTW, unless there's something you haven't told us, you won't be arrested. This isn't 18th century England.

Also, if you are in Florida, your house is an exempt asset with regard to the judgment.

You need to talk to a lawyer with regard to getting the judgment creditor's hands off your house.

[confusedinfl]

Thank you. I have someone working on getting the lien removed from the house. No there is nothing else to tell. This was just a business deal gone bad...I sued her...she perjured herself...bad luck on my side with outrageous errors in the business accounting by the court special master....I lost....minimal judgment for case....unbelievable judgment for her attorneys fees and costs.....lesson well learned. Unfortunately for her...I don't have any assets so no one wins.