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?

UPDATED: Sep 14, 2011

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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


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

Answered 11 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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