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Can my business bank account be garnished based on personal debt?

Odenton, MD |

Can a firm garnish my business bank account if I have unpaid personal debts. Also can they garnish my income taxes from my business if I owe personal debt?

Attorney Answers 4

  1. That depends

    What business form, LLC, partnership, C Corp etc..... How strictly have you kept to the corporate form? All indicia followed, or not?

    See a business attorney to hire.

  2. Yes if it is a dba bank account. If it is a corporation or LLC bank account, the business account cannot be garnished without the creditor taking further steps to execute on your interest in the business. Most lawyers do not go to such great lengths to collect a judgment as the procedure for doing so is very time consuming and expensive. Also, the IRS could garnish any account that they believe is holding funds belonging to you. You should talk to an experienced debt collection attorney about how to preserve your rights and protect your money and your business. A bankruptcy can stop both an ordinary wage garnishment and an IRS wage garnishment. See the links below for more details.

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  3. A limited liability company is a separate legal entity from the members who have an ownership stake in it. However, if a Creditor can prove that the company is not acting as an LLC and instead is rather just an extension of you, then they may try to claim you and the business are one in the same. So long as you are not co-mingling funds and following all of the LLC procedures put in place, it would be very difficult for the Creditor to come after the business. With this said, you should consult with a local lawyer to determine what steps can be taken to protect all of your assets.

  4. In general "no" provided your business is a registered LLC or INC. If you are operating as a sole proprietor then the answer is yes. And if an LLC or INC but you are not keeping its money and assets strictly separate from your personal money and assets, then "Yes." Call me for further consultation. Getting into detailed facts will require a modest fee. 410-29-6989.

    Licensed in Maryland with offices in Maryland and Oregon. Information here is general, does not create a lawyer-client relationship, and is not a substitute for consulting with an experienced attorney on the specifics of your situation.