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Corporation bank vs personal bank account and creditors

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sinebar
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Corporation bank vs personal bank account and creditors  Reply with quote  

This may be a bit complicated but here goes. If I formed a Corporation or LLC, then opened a corporate bank account and then deposited my pay check into the corporate account, can creditors of personal debt seize the corparate account? I'm pretty sure they can still garnish my wages which is not a problem. I just want to keep their paws off the rest of my money.
Post Wed Aug 08, 2012 12:23 am
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oldguy
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I think they can get to it. The creitor's lawyer will go thru the Discovery process, learn that the assets in your LC account came from your personal employment, and declare that your LLC account was used to "Hide" funds forem the creditor. And it would probably stand up in Court. But it may depend on the timing - if you were financially healthy when you formed the LLC and it was a couple years ago, you might argue that it was 'coincidence', not purposely 'hiding'.
Post Wed Aug 08, 2012 1:11 am
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sinebar
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quote:
Originally posted by oldguy
I think they can get to it. The creitor's lawyer will go thru the Discovery process, learn that the assets in your LC account came from your personal employment, and declare that your LLC account was used to "Hide" funds forem the creditor. And it would probably stand up in Court. But it may depend on the timing - if you were financially healthy when you formed the LLC and it was a couple years ago, you might argue that it was 'coincidence', not purposely 'hiding'.


Well ok then what if I cashed my pay check and then deposited cash into the LLC account?
Post Wed Aug 08, 2012 3:59 pm
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oldguy
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The Discovery Process is quite comprhesive, they look at all of your money flows in & out of all accounts, match it with checks, credit card receipts, credit rating reporting. Those guys are good, if you are planning to hide money you'll need to be pretty slick, they/ve seen it all, lol.

Sounds like you have kids and a really mad Ex? Very Happy Sorry - but if it goes to Court they'll see thru your plan in a heartbeat and easily crash your 'firewall'.
Post Wed Aug 08, 2012 8:12 pm
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sinebar
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quote:
Originally posted by oldguy
The Discovery Process is quite comprhesive, they look at all of your money flows in & out of all accounts, match it with checks, credit card receipts, credit rating reporting. Those guys are good, if you are planning to hide money you'll need to be pretty slick, they/ve seen it all, lol.

Sounds like you have kids and a really mad Ex? Very Happy Sorry - but if it goes to Court they'll see thru your plan in a heartbeat and easily crash your 'firewall'.


No fortunately I'm not married and have no kids nor do I want either. I'm also current on all my dept. I was really just speculating in the event that I lose my job and drawing some severance pay. If that were to happen I would stop paying everything but it looks like a bank account would be out of the question under those circimstances.
Post Thu Aug 09, 2012 12:04 am
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loanuniverse
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At the end of the day if a creditor wants to go after your money, it will have to get a judgment in court. If the money is in the name of an LLC, it will need to get a judgment against the LLC also.

You might also be overestimating how quickly the creditors will move after your money. Unless, they are aware that you have a lot of money they will probably not start the process for a couple of months.

On the other hand, in case of bankruptcy you will have to disclose the existence of the LLC.
Post Thu Aug 09, 2012 12:32 am
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coaster
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... and keep in mind that failure to disclose is fraud, and courts take a dim view of that ... Smile

~Tim~
Post Thu Aug 09, 2012 12:54 am
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