What type of corporation should I start after filing for bankruptcy? 17 Answers as of August 08, 2011

My brother and I want to start a corporation, but we are concerned about wage garnishing and the assets of the company being at risk since I filed for bankruptcy 3 years ago. Which type of company (ex: LLP, LLC, S-Corp) will have the best protection?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Breckenridge and Walton
Breckenridge and Walton | Alan D. Walton
Your bankruptcy eliminated debts that existed when you filed, so there should be no one trying to collect - if they do, they are in contempt of court.
Answer Applies to: Michigan
Replied: 8/8/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Why would you worry about that? The bankruptcy wiped out your old debts. You need to see a lawyer because I do not have enough information to answer your question about what type of business form is best for you. You old debts are not a factor.
Answer Applies to: California
Replied: 7/14/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Any of those will suffice for what you are hoping to do
Answer Applies to: Washington
Replied: 7/14/2011
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
I don't really understand your question in that if you filed for bankruptcy all your debts are discharged and you shouldn't worry about any wage garnishment, etc. If you are starting a business then you probably need to create an entitly that is best for your potnetial tax liabilities. When you form a corporation, at least at first, you will probably need to become personally liable for any debts taken out by the new corp anyway.
Answer Applies to: California
Replied: 7/13/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
The decision as to what type of corporation to set up is mostly an accounting choice. This new entity and its assets are not liable for debts that were personally discharged.
Answer Applies to: California
Replied: 7/13/2011
    Hines Law Offices
    Hines Law Offices | Holly H. Hines
    Typically I wouldrecommend a S-Corp. so there isless likelhood that a potential creditor can pierce the corporate veil and seek personal assets of the officers/owners of the corporate entity for liabilities of the business. To learn more please contact me below for a free consultation.
    Answer Applies to: Massachusetts
    Replied: 7/13/2011
    Law Offices of John J. Ferry, Jr.
    Law Offices of John J. Ferry, Jr. | John J. Ferry, Jr.
    Frankly, you may want to run this past your accountant rather than your lawyer. All the types you mentioned should protect your personal assets, provided you don't start mixing business and personal property. Your accountant can help you with the tax ramifications of your choice.
    Answer Applies to: Pennsylvania
    Replied: 7/13/2011
    The Law Office of Marvin Wolf
    The Law Office of Marvin Wolf | Marvin Wolf
    All forms of limited liability entity have their good points and bad points. What is right for one kind of business may not be right for another. For example, if there are not many assets and you are just getting started, an S-Corp, if you qualify, is the least expensive to form and easiest in terms of handling taxes - it's taxed like a partnership (single rather than double taxation) and you just file an additional schedule with your personal income taxes. C Corporations are treated differently (the corporation is taxed, and the individual shareholders are then taxed again on their share of profits), and there are some issues regarding LLCs and LLPs separate from tax treatment - less management structure is needed for these entities, but for a successful business, a more formal structure can be very important. This is not tax advice, just general information. If you filed a chapter 7, your case should be long over by now, and unless a debt was deemed nondischargeable, you should have received a discharge of all of those past debts (except some types of debt such as school loans or child support), so you would not have to hide from those discharged creditors by forming any sort of entity. A corporation or LLC may provide some protection for debts of the entity itself but not from personal debts. One of your personal assets would be the shares or member interests in the corporation or LLC, so that could be attached to satisfy post-bankruptcy personal debts. If someone is coming after you post-bankruptcy for a debt discharged in the bankruptcy and going after post-bankruptcy assets, they are violating the bankruptcy court's discharge injunction and YOU could sue THEM.
    Answer Applies to: New Jersey
    Replied: 7/13/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    You should consult both with an attorney and a CPA to best determine the corporate structure. There are advantages and disadvantages to both depending on your situation.
    Answer Applies to: Oregon
    Replied: 7/13/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    If you filed BK, none of those creditors can collect in any way no matter what kind of business you start.
    Answer Applies to: Virginia
    Replied: 7/13/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    First, if the debt you are concerned about was included in the bankruptcy case, it was discharged and that creditor cannot collect on that debt, so there should be no issue about garnishment from that type of debt. As far as future debt, either a LLC or S-Corporation can give you protection from corporation debts. However, the form of entity is more an issue of taxation than protection and how debts are incurred to keep form personal liability. You should consult a tax advisor or attorney as what the business is for, its income potential, etc. are important matters as well - not to just "plug in" some form of entity thinking that is the end of all potential issues.
    Answer Applies to: California
    Replied: 7/13/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Unless you are still in bankruptcy, a past bankruptcy would have nothing to do with a new corporation. In any event, the decision about a business form is complex, and requires evaluation of tax and legal consequences by both a CPA and lawyer, and you should meet with both.
    Answer Applies to: Georgia
    Replied: 7/13/2011
Click to View More Answers:
12 3 Free Legal QuestionsConnect with a local attorney