Considering bankrupcy

[equity28]

I have been recently sued by a company, I hired a lawyer for this to reach a settlement. They want no less then a $120,000 from me which I don't have. I have no car, no house and a couple grand in my personal checking account. Obviously I cannot pay them, I am self employed so my question is if I don't file bankrupcy can how bad would they screw up my credit? Also could they go after my corporation assets? How fast can you rebuild your credit after filing bankrupcy. Can they freeze all my bank accounts later on down the road if I don't?

[bellagad]

they can freeze your bank account. i discharged in january and already have a new dodge hemi, approved for 2 cards. scores were low 500 when i was done. just brought them to over 600 thanks to this site. leave no money in your accounts because they can sieze it....

[equity28]

I have a 700 Fico score, how low would it go if I were to file bankrupcy?

[SinkingFast]

Your post is a bit confusing.

Was the Law Suit personal in nature or against your company??

If you're talking personal BK, that's one thing.

Business BK is whole 'nother ballgame all together.

You'll need to be a bit more clear in what kind of information you're seeking.

[equity28]

Personal bankrupcy, I opened up my corp after the lawsuit. I always pay my credit cards and bills on time and never had a deliquency notice even. How will not paying $120k to this company hurt my credit?

[SinkingFast]

This is a tricky situation. You'd be best off to Consult with attnys on how you should proceed.

I'm almost certain, your company would be considered an asset in BK. But how and for how much is a question.

If you were regular Joe Blow filing BK due to a Law Suit, your credit probably wouldn't suffer too much. Since you're current in your payments, your score would take a hit initially from the BK, but then you'd rebound from having the Judgement or Liens of the Law Suit lifted off you. If you carried a car loan and/or mortgage thru the BK with you, a couple more positive reporting credit lines and you'd be back up the FICO ladder in no time.

That's if you can file Ch 7.

If you have to file Ch 13, you may well be tied up, credit wise, for 5 years. Ch 13 plans are 3 years minimum, but most plans under the New Law will be 5 years. For the duration of the plan, you cannot incur new debt except to buy a house or a car. That's after being in the plan for a year. And with the approval, in advance, of the Trustee.

But owning a company throws a whole different wrinkle in there.

Regardless, you should schedule appts with several attny's for Consults. Be sure to explain your particular situation when you call. Some attnys only do personal. Some only do business. Some do both. You don't want to waste your time meeting with attnys who cannot help you. You need answers.

[equity28]

Isn't a company its own seperate entity? I was told by someone if you own a corporation they can't touch it because of a personal lawsuit and vice versa.

[SinkingFast]

See, I don't know.

Don't you own the company, or at the very least own an interest in the company??

If that's the case, then the company is an asset that belongs to you as far as BK goes. Just like your car, your house, cash in the bank, stocks, bonds, the company is an asset. If you cannot cover it with an exemption, then it's up for grabs by the Trustee.

That's just a line of thinking running there.

You really need to see some attnys and get their take. Consults are free and you'll learn a lot.

[equity28]

Yes but my company is a online venture, if they confiscate it, its worthless. It has 0 value and I am the owner of it. There is no physical business, but I do have money in my corporate accounts. Can they confiscate that? Its a llc so I am a limited liability company. I appreciate the advice. I will go for a consultation this week.

[DOA]

Is this company coming after YOU for the money or the COMPANY? Other than a creditor, who would come after you for $120k other than an accident or something?

[equity28]

They are after me personally. I was involved in a Civil Lawsuit which I don't really want to talk about with about 50 defendants named. I could have gone to trial and gottn rid of it, but it would cost me about 100k, so I chose to settle. The Settlement offers went from 500k to 120k(money which I dont have). This companys goal is to drain my wallet. I started my company 6 months after this lawsuit.

[aa06a47]

You better talk to an attorney. Your corporation, though worth Zero isn't really worth zero if there is money in the corporate bank account. Since you are the only "shareholder", that one share you own = whatever is in your bank account.

Has the party that settled with you started any type of collection activity against you? You can probably wait until such time that they take you to court to get a wage garnishment or lein on your belongings. Have you discussed the settlement with any of the other defendents in the lawsuit?

[equity28]

No if I dont settle they will move towards a default judgement from the court. This will all drag on time.

[Rover]

Isn't a company its own seperate entity? I was told by someone if you own a corporation they can't touch it because of a personal lawsuit and vice versa.

You obviously have a "closely-held" corporation (as opposed to a public corporation with shares traded in the stock market). That means that if there is any value there, the BK Trustee can take it.

[Rover]

I am currently going through this right now. If you file personal bankruptcy and you are a corporate officer of a C, S or LLC -- you better believe they are going to look at your company.
HTH

This may sound like a picky point because in most cases they are one and the same, but isn't the criterion whether you are an owner of a closely-held corporation, not whether you are a corporate officer? For example, an officer of a publicly held corporation isn't going to have the BK Trustee asking to examine the books.