Legal Question in Credit and Debt Law in Michigan
forming a corperation vrs bankruptcy
Hello, I lost 2 houses 3 years ago,
I live in michigan. I had $10,000 in debt and no listed amounts owed when I lost my homes 3 years ago.
FOR the same price I can place my new home which I bought on land contract in ( A CORPERATION )
and ALL my assets which are 100 DOMAIN names worth $20,000
AND some land value $10,000.
REASON I am forming a delware corperation is NO body has contacted my from my old debt and
to be blunt it THE ASSETS ARE now in the corperatoins name.. my C corp will now own all these assets.
DOES ANYONE FEEL a collection company or lawyer can get a garnishment, LEVY or any assets that are involved with a 1031 tax exchange in the c-corps name....
or is this a matter of a court can force liquidation of these assets or help to place liens on them... or somehow force the domain name company to turn over the assets for the judgement and the land to
place a lien on that... but I dont own it is my question... I know this is written in long form but it's involved question wise thanks
3 Answers from Attorneys
Re: forming a corperation vrs bankruptcy
Transferring assets shortly before being pursued by creditors or during such time is a fraudulent conveyance. The creditors will be able to make you turn over the property as a result since you did not sell them to the corporation for fair market value.
If you were to file bankruptcy after doing this, you'd be in for a world of hurt because the trustee would be all over it.
Re: forming a corperation vrs bankruptcy
If the debt you are referring to is the result of deficiency balances when your houses were foreclosed on, chances are that there will be no action to recover those monies. Generally, in Michigan, a mortgage company bids the amount owed on a mortgage at the sheriff's sale. The statute of limitations for other debt such as credit card debt or any debt created by contract is generally six years.
If you transferred assets from a defunct corporation that had creditors, the fraudulent conveyance issue could come back to haunt you.
Otherwise, you do have some complex dealings going on that you should consult an attorney about. This would not be the site for comprehensive legal advice.
Re: forming a corperation vrs bankruptcy
There is a theory of law called fraudulent conveyance, which is disposing of assets to avoid creditors. It is unlawful and you could find yourself on the losing end of that battle if you have agressive creditors. visit www.kliszlaw.com to discuss. Tim Klisz
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