can my personal bank account be garnished for a business judgement

i had a s corporation and i had to close it do to not making money but
while i had coporation i had a judment and can judment leavy my
personal bank acct

Asked on June 21, 2016 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

They should not be able to garnish your personal bank account for a corporate (even S-corporate) debt unless:
1) You guaranteed the debt;
2) Even though it was ostensibly a "corporate" debt or judgment, it was really against you personally (e.g. it was a credit card which you used for business but was in your name personally, or was for a lease you signed personally, not as a corporate representative; it was for certain tax debts for which you are personally liable, even if they are corporate taxes [e.g. sales tax; income tax wage withholding); it was for a tortious act, like defamation or an auto accident, which you personally committed while at work);
3) The creditor brought a legal action to "pierce the corporate veil" and show that the corporation was a pretense: that you had co-mingled corporate and personal assets to such an extent that there really was no meaningful distinction between the company and you; or 
4) They can show that you fraudulently or improperly moved corporate assets into your own name, so even it's your bank account, it's really corporate money that you were sheltering or hiding there.
Other than the above, they should not be able to reach your personal money for a corporate debt, and you could bring a motion in the legal action (the one that led to the judgment) seeking a court order to lift the garnishment and return any funds taken.


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