Legal Question in Bankruptcy in California
My husband and I have a business and have heard that to protect assets used in the business (like my husbands truck and tools and my car for sales calls) we need to form an s corp or llc. Our accountant says that he doesn't believe that we will be allowed to do this at this date as we will probably be filing within about 3 months.
2 Answers from Attorneys
You cannot transfer assets prior to, or in anticipation of filing bankruptcy, as those will be considered either an avoidable preference, or fraudulent conveyance. You need to meet with an experienced, qualified bankruptcy attorney before doing anything. Your accoutant is right, but you need to talk to someone who knows bankruptcy law to see if you even have an issue with asset liquidation. There are many ways of dealing with assets, including the fact that they may be exempt, or if they have a lien, exemption may not be necessary as you may not have any equity. Most bankruptcy attorneys offer a free consultation, so there is really no reason not to go see someone and get solid advice.
*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence. As required by 11 U.S.C. �528, we must now disclose that, "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. Assistance we provide with respect to Debt Relief may involve bankruptcy relief under the Bankruptcy Code."
Not sure whether you are thinking of filing under California or Washington State law, as it makes a difference. Each state has varying limitations on what you can keep. We notice from your zip code that you are in Washington state. Perhaps you need to contact a local attorney there. Under California law there often is no problem keeping modest possessions such as one car and a work truck and tools, depending on the financing (if any) and what other assets are also in the mix. We do this all the time.
Related Questions & Answers
-
I filed Chapter 7 in May of 2009, myself, and added an old IRS tax debt from the... Asked 6/06/10, 10:28 am in United States California Bankruptcy Law