Dissolved corporation, creditors going after me personally

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Latest post Thu, Mar 31 2011 3:24 PM by LynnM. 11 replies.
  • Tue, Mar 29 2011 12:57 AM

    • Mike2016
      Consumer
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    • Joined on Mon, Oct 25 2010
    • CA
    • Posts 12

    Dissolved corporation, creditors going after me personally

    I had to close down this coporation(S-corp) around Dec 2010, I had lost everything from doing this business. One of the creditors - a freight company, with a debt of roughly $10k had sued me recently, they brought the documents to me just a few days ago.

    The coporation was dissolved and I did not take any distribution from it, my last income tax of 2010 was a lost.

    I have many other collections but none of them have acted besides calling and mailing me collection letters. I don't really care what they do to me, I have no assets, no bank accounts at all. I don't care about my credit either. I'm more worried about creditors going after my wife.

    I was married in Jan 2010, and the debts from this freight company were incurred between Apr - Aug of 2010. 

    My question is, will they be able to place a judgement on my wife's asset?  

     

  • Tue, Mar 29 2011 4:33 AM In reply to

    Re: Dissolved corporation, creditors going after me personally

    Mike2016:

    I was married in Jan 2010, and the debts from this freight company were incurred between Apr - Aug of 2010. 

    My question is, will they be able to place a judgement on my wife's asset?  

    Unless the debt is a community debt, then the answer to that is no. But if the creditor gets a judgment against you, it can get to your interest in any community property. Even if an asset or income is in your wife's name only, it may still be community property.

    Did you personally guarantee any of the freight company debt? If not, then you can try to avoid the judgment against you by relying on the limited liability that the corporation provides. I suggest you see an attorney in CA for advice on this. Taking the right steps now may be able to avoid all the personal liability and thus avoid having to deal with the possibility that the creditor might seek to come after assets related to your wife.

  • Tue, Mar 29 2011 11:19 AM In reply to

    Re: Dissolved corporation, creditors going after me personally

    I agree.

    You need a lawyer right now in order to properly answer the complaint.

    You generally have about 20 days from process service to file an answer to the complaint.

    The alternative is bankruptcy, which may be a lot cheaper, and should get rid of all your debts.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Tue, Mar 29 2011 4:36 PM In reply to

    • Mike2016
      Consumer
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    • Joined on Mon, Oct 25 2010
    • CA
    • Posts 12

    Re: Dissolved corporation, creditors going after me personally

    I don't think the debt was a community debt. I was the sole owner of the corporation, the wife had nothing to do with it. and I did NOT personal guarantee any of the debt.

    I'm sure they will get a judgement on me, I am going to lose the case no matter what. I don't have any income other than EDD unemployment checks, and my wife receives scholarship funds from the college as her only income.

    I don't really want to spend money hiring an attorney, i don't have that money to hire one anyways.

    as long as they can't touch my wife then that's all I hope for.

    my last resort will be to file for bankruptcy.

  • Tue, Mar 29 2011 4:37 PM In reply to

    • LynnM
      Lawyer
    • Top 10 Contributor
    • Joined on Mon, Apr 3 2000
    • CA
    • Posts 28,248

    Re: Dissolved corporation, creditors going after me personal...

    "I'm sure they will get a judgement on me"

    If the corporation was properly set up and if  there was not personal guarantee, how do you think that would happen?

  • Tue, Mar 29 2011 5:40 PM In reply to

    Re: Dissolved corporation, creditors going after me personally

    Mike2016:
    I'm sure they will get a judgement on me, I am going to lose the case no matter what.

    You can be guaranteed of that if you don't step up and defend yourself.

    With no personal guarantee you can probably get the case dismissed fairly easily.

    Did you know that judgments in CA are enforceable for 10 years (and may even be renewable). A judgment can haunt you for a long time and make it difficult to buy, sell, or refinance a home, finance a car, even get a job.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Wed, Mar 30 2011 5:12 PM In reply to

    • Mike2016
      Consumer
    • Not Ranked
    • Joined on Mon, Oct 25 2010
    • CA
    • Posts 12

    Re: Dissolved corporation, creditors going after me personal...

    They are suing me as an individual defendant. aren't they able to go after the person who owned the corporation after it's dissolved?

  • Wed, Mar 30 2011 5:45 PM In reply to

    Re: Dissolved corporation, creditors going after me personal...

    They can "go after" anybody they want. Anybody can sue anybody for anything.

    What we are saying is that you have a defense to raise if you did not give a personal guarantee.

    If you don't defend, they get a default judgment against you, even if they are wrong.

    That's because the judge only sees their side of the story and has to accept it as truth if you don't rebut it.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Wed, Mar 30 2011 6:05 PM In reply to

    • Mike2016
      Consumer
    • Not Ranked
    • Joined on Mon, Oct 25 2010
    • CA
    • Posts 12

    Re: Dissolved corporation, creditors going after me personal...

    Do i have any chance of defensing this case without an attorney?

  • Wed, Mar 30 2011 6:30 PM In reply to

    • LynnM
      Lawyer
    • Top 10 Contributor
    • Joined on Mon, Apr 3 2000
    • CA
    • Posts 28,248

    Re: Dissolved corporation, creditors going after me personal...

    I don't know - can you? Are you skilled in civil procedure? Piercing the cporpoate veil mean anything to you?

  • Wed, Mar 30 2011 6:39 PM In reply to

    • Mike2016
      Consumer
    • Not Ranked
    • Joined on Mon, Oct 25 2010
    • CA
    • Posts 12

    Re: Dissolved corporation, creditors going after me personal...

    haha i don't know what that means.... i don't know anything about civil procedure either.

    i guess they just want to screw me over...

  • Thu, Mar 31 2011 3:24 PM In reply to

    • LynnM
      Lawyer
    • Top 10 Contributor
    • Joined on Mon, Apr 3 2000
    • CA
    • Posts 28,248

    Re: Dissolved corporation, creditors going after me personal...

    I would hardly use that somewhat offensive term to describe a business that wants it's legitimate debts paid.

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