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fabi

Is this the right decision?

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Here is my question: After a judgment is entered against someone and e write of execusion has been orderd by the court. Can the judgment holder or their attorney try to request and attach a business account that belongs to a corporation or LLC, where the judgment debtor is a member and has access to that bank account?

Thanks for your feedback and have a great weekend.

:)

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Nope, you cannot attach the business accounts unless you can break through the corporate veil first. A corporation or LLC is considered an separate entity from the individual and hence, unless the corporation or LLC was party to the suit, you cannot take the assets of the corporation.

Now, if the individual has stock in the corporation, you can attach that and either garnish the dividend checks from the corporation or seize and force the sale of the stock of the corporation to satisfy the judgment since the stock is an asset of the individual.

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WhoCares1000: Thanks for your reply. The whole idea is to know how a judgment creditor can find if you are part of a corporation or llc! A friend was asking me and I had no idea how it works.

You mentioned The corporate Veil. Do they need to brake that first in order to request the sale of shares or stock?

Thanks.:)

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They can get an order signed by a judge to go after those assets if you are found to be hiding the assets from you creditors in that account. Most attorneys will not take it this far because it is a ton of work/attorney time. But if you are not an owner/partner in the corporation such a motion would not be sucessful.

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I think the decision would depend on whether this is a closely held company or not. If it not a closely held company, then it is as simple as finding out which broker is holding the stock and doing a levy similar to a bank account levy.

If this is a closely held company, then there will be more work involved. You will need to find out if the debtor is the only person who owns the shares in the company or if there are other shareholders. You will also need to find out if the debtor is just a shareholder or an employee of the company.

If the debtor is the only shareholder, then realize that taking the shares will probably put the debtor out of work and then you have to run the company and do an orderly sale of the assets and pay off the other debts of the company before you can collect your money. All this takes time and effort too. Not only that but the company could be in the red which means it will actually cost you to take it. However, in this situation, the debtor is usually an employee of the company too which means you can garnish their wages from the company under the garnishment laws of the state the debtor is in. As for dividends, once you take the first dividend check through levy, expect the company to declare no dividends until you either are satisfied or give up.

If the debtor is not the only shareholder, then you can determine if the shareholder is an employee of the company or simply a shareholder. If they are an employee, wage garnishment laws apply. If they are a shareholder, then you can consider attaching the stock and then telling the other shareholders that you are willing to sell the stock as its per share value which is usually the company book value (assets - liabilities) divided by the number of shares.

As you can see, this will take some work so unless this is the only route left to satisfy a judgment, you may want to consider another route.

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