Can a creditor levy a corporate account that I am a signer on when the judgment is from a personal issue not related in any way?

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Can a creditor levy a corporate account that I am a signer on when the judgment is from a personal issue not related in any way?

I have a judgment against me for $5,000. It is a personal issue that involved my SS#. I have a corporation that I sign on that is listed with an EIN not my SSN. Can they eventually go after my corporation or can they only go after me personally?

Asked on September 14, 2011 under Bankruptcy Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Generally speaking the answer to this question is no.  A creditor can not levy against a business corporation based upon a personal judgement against one of its members.  But the judgement creditor can in fact act against the corporation, so to speak, in a few other ways.  First, if the member of the corporation receives a salary the judgement creditor can garnish the salary just like any other regular employee.  Now, one could in fact try and get around this by not taking a salary but then you would be in  position of defrauding the creditor.  The creditor then may have a basis to try and pierce the corporate veil meaning proving to the court that the corporation is a sham which you hide behind and allow them to levy on the corporation.  Difficult to do but not impossible.  It may be best for you to deal with this head on.  Good luck.


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