Could I lose personal assets if my corporation is sued?
I am being sued by the state for going against the Consumer Protection law. I had an S Corporation that went out of business because the money ran out. The state is suing me personally. My question is: If I am found guilty of wrongdoing, could they take my house, wages, car, etc.?
I did nothing wrong in my eyes. The company just got low on funds and was forced to go out of business. We may have a trial. If I am found guilty by some chance, could they take my personal belongings? Could they ask for money I don't have? If they do, do I have to pay up? How would they expect me to pay up if I have no money?
My lawyer is vague when I ask him such questions and says, ''That won't happen.'', but doesn't give me an answer in case it DOES happen.
Thanks for your help.
1 Answer from Attorneys
Re: Could I lose personal assets if my corporation is sued?
The threshold question is whether you are being sued civilly. If so, who is the named Defendant, you or the corporation? If it is the corporation, your personal assets are not involved.
However, I would be surprised to learn that they are not suing you personally, as I assume they are. In that event, your personal assets are indeed exposed. The state, like any other creditor, can sell your personal belongings or seize your bank accounts.
One option is to file a Chapter 13 bankruptcy. A Chapter 7 could be problematic as the debt could be excepted from discharge.
I trust this answers your questions, but feel free to call or E-mail on a free initial basis.
Related Questions & Answers
Eveidence is a contract direct or circumstantial evidence? Asked 4/29/03, 1:08 pm in United States Pennsylvania Business Law