Legal Question in Bankruptcy in North Dakota

Family finance protection against business bankruptcy

My husband is about to open a franchise business, so I would like to know how to protect any family financial loss against possible business bankrupcy. If his business fails, the lender or the franchise company for his business can place the house or my salary under distraint? FYI, currently we have joined bank accounts, and the house is under both names. Would a separate bank account or change of the house title under my name would protect against any this risk of being taken away by the lender or the company?

And also, he needs to submit the financial state report to the franchise company, so do need to change the house title and separate the bank account before submission of the financial report to the company?

Thank you in advance.


Asked on 5/09/08, 11:37 am

1 Answer from Attorneys
Nancy Delain Delain Law Office, PLLC

Re: Family finance protection against business bankruptcy

Note that I am not admitted in North Dakota. For good legal advice, you should contact an attorney who is admitted to practice in your home state.

However, in New York (where I am admitted), forming a corporation or LLC to hold the business debts for the franchise, rather than the franchisor directly holding those debts, generally protects a home in the event of failure of the business. This is more than just a separate bank account or changing the title to the house.

Talk with your business attorney (you do have one? if not, get one NOW) about all this before you sign the final papers.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

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Answered on 5/09/08, 10:25 pm


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