Legal Question in Bankruptcy in California

rock bottom

we are really broke and have terrible credit. we owe everyone we know money and right now have no income. my father recently died and we gave up everything to come and help my mom. my wife has finally found a job and will have a decent income soon but we will not be able to catch up on everything we have missed. before my dad died i was running an ebay business but have spent most of the money for the business trying to keep us afloat. we plan to file bankruptcy but i would really like to get my ebay business going again. we have 3 children so daycare is really expensive and if we work opposite shifts they wont be cared for correctly. i had thought of starting a corporation to shield the business from our debts but from what i can tell creditors would be entitled to my share of the corporation. is there a way to keep my creditors from taking my interest in a corporation and would we be able to file for bankruptcy?


Asked on 11/16/07, 6:05 am

2 Answers from Attorneys
Robert Mccoy Law Office Of Robert McCoy

Re: rock bottom

Creditors cannot get to the assets of the corporation, they can only take away your shares. So, you will need to have more than one shareholder, and will need to divide up voting rights. You can name yourself as CEO and pay yourself a salary. Then, even if someone does get your shares, they will be getting in effect, nothing. Note, you should file bankruptcy BEFORE you incorporate, for all kinds of reasons that are too lengthy for this short answer.

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Answered on 11/16/07, 11:53 am
Robert F. Cohen Law Office of Robert F. Cohen

Re: rock bottom

It makes sense to file BK now, if at all, as you are -- as you put it -- at rock bottom, but should soon be climbing out of the valley.

I second Mr. McCoy's sentiment that BK would be appropriate before you create a corporation. By the way, people are expected to bring in an income, even during bankruptcy, to provide for their basic needs such as housing, food, clothing, utilities, etc.

Please let me know directly if you need help in getting started.

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Answered on 11/16/07, 5:41 pm


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