Personal Bankruptcy & Business Accounts

[TonyG2009]

What is the name of your state (only U.S. law)? California

I will be filing for bankruptcy here within a few months and have my own business - which is currently a sole proprietorship. If I have money in my business account, will that money be at risk of being frozen or accessed by creditors and/or collection agencies? If so, is there any way to keep my business account separate from my personal situation? Incorporate? - Thank you.

 

[HomeGuru]

What is the name of your state (only U.S. law)? California

I will be filing for bankruptcy here within a few months and have my own business - which is currently a sole proprietorship. If I have money in my business account, will that money be at risk of being frozen or accessed by creditors and/or collection agencies?


**A: yes since in the eyes of the law, you are your biz are one and the same entity by virtue of your sole proprietor status.


#########

If so, is there any way to keep my business account separate from my personal situation? Incorporate? - Thank you.

**A: too late. If you incorporate now and transfer the funds from personal to corporate, the BK Trustee would simply claim a transfer of funds for the sole purpose of evading creditors. A fraudulent action. Search "BK piercing the corporate veil"

 

[tranquility]

I agree with HomeGuru, you are the same entity as your business. Just because you have a seperate account for the business does not mean it is not a part of the bankruptcy. If you were to transfer it to a different entity now, the trustee will look back and seize it. Besides, if you owed the newly-formed corporation, that ownership could be transferred to your creditors anyway.