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Can my CC company put a lien on my house if I am incorporated.

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dick23

Junior Member
What is the name of your state (only U.S. law)? IL
I have an incorporated business, I have a business checking account and file corporate taxes. Everything is separate from my personal expenses. The problem is my 2 CC's are in my name but all purchases can be shown to be business purchases. I want to file bankruptcy on the business and the only people I owe is my CC company.
I am being told by an attorney that the CC company can put a lien on my house. What was the purpose of incorporating if they can come after my house?
Someone please enlighten me
Thanks in advance
 


xylene

Senior Member
You used your personal guarantee on personal credit cards instead of establishing a business line of credit.

That is really not hard to understand how this debt can attach to your personal assets.
 

latigo

Senior Member
What is the name of your state (only U.S. law)? IL
I have an incorporated business, I have a business checking account and file corporate taxes. Everything is separate from my personal expenses (?). The problem is my 2 CC's are in my name but all purchases can be shown to be business purchases. I want to file bankruptcy on the business and the only people I owe is my CC company.
I am being told by an attorney that the CC company can put a lien on my house. What was the purpose of incorporating if they can come after my house?
Someone please enlighten me
Thanks in advance
Yes you do have a "problem". However, it is not limited to the credit card accounts. Curious? Then I'll tell you.

It is because the use of your personal credit to purchase goods and services on behalf of "your incorporated business" is highly, if not decisively, suggestive that the business simply functioned as your "alter ego" - as in "one and same".

The legal implications being that you could be held personally liable to all of the so-called separate business creditors.

As much as I dislike the terminology I suggest that you do an engine search under the heading "piercing the corporate veil".
 
I have an incorporated business. . . Everything is separate from my personal expenses. The problem is my 2 CC's are in my name but all purchases can be shown to be business purchases. . .

Then, the reality is that you do not keep “everything” separate. I do not agree that utilizing two personal credit cards for business purposes pierces the corporate veil however, it is clear that, for whatever reason and, at least as it relates to the credit cards, you did not keep everything separate.


I want to file bankruptcy on the business. . .

Why? Is the business going to continue to operate? Are you planning on starting a new business doing exactly the same thing? Are you being told by some “lawyer” that the business needs to file bk?

1. If the business is going to continue to operate it would be filing a very expensive Chapter 11.

2. If you want to start a new business doing exactly the same thing and are worried about “successor liability” then maybe the business files a Chapter 7 so that you can purchase the business assets including the accounts receivable, phone number, advertising and other “good will” from the Chapter 7 trustee. This would allow you to start a new business without the threat of successor liability.

3. If either 1 or 2 do not apply, why would the business file bk at all? In a Chapter 7 it WILL NOT get a discharge and once the 7 Trustee closes the case down any creditor of the business can still sue the business. Typically there is no benefit under this scenario other than lining the pockets of some attny.

I am being told by an attorney that the CC company can put a lien on my house. What was the purpose of incorporating if they can come after my house?

Since the credit cards are in your name you (not the business) are responsible. If the credit cards are not paid the creditors sues YOU, not the business. This has nothing to do with the business. It simply does not matter what you used the credit cards for. The obligation to pay is yours, not the business. If and when a judgment is obtained against you the creditor is free to seize your personal assets to satisfy the judgment as is allowed by state law.

Des.
 

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