Q: I have a S corp business in TN. If I'm personally sued, can my business be collected against for a personal asset?
I was unable to pay a personal unsecured loan payments after an accident that left me bed ridden for 5-6 months. Now, that I'm back on my feet, I contacted the credit union to reestablish payments on my 15k loan, but they said it was charged off. I contacted the attorney handling this matter, and he's been extremely unprofessional asking for a large amount of money up front, and double the monthly payments. Can my S corp (brick and mortar business) be collected against as a personal asset?
A: A corporation is a separate legal entity- it is not the same as a sole proprietorship. The corporation has its own bills and records, and hopefully, you have keep the business records and assets separate from your personal bills and records. Many people fail to appreciate the difference and co-mingle their assets and records, especially when it is a small or single owner corporation, and if you have not observed the formal requirements of dong business as a corporation, a court can 'pierce the corporate veil" and disregard the corporation. Giving an accurate answer in your situation will require a detailed analysis- you should consider hiring defense counsel to advise you.
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