Will creditors go after the people I sell my business to? 2 Answers as of August 16, 2010I am a sole proprietor of a small business but I am planning on filing for bankruptcy due to business and personal credit problems. I am planning on either selling or gifting my business to a family member. Will the creditors still go after the business after it’s been given away?
Klinger Law Center | Linda Klinger
Selling or gifting any assets just prior to filing a bankruptcy is a BAD idea. If you sell it or gift it to an insider (family member) the bankruptcy trustee can undo the transfer and then pay your creditors with the proceeds from liquidating business assets. Before you transfer any assets or sell your business, I recommend that you meet with an attorney and obtain thorough legal advice particular to your situation, not just an answer as to general legal principals from a posting. You should consult with an attorney local to your area.
Answer Applies to: California