I let someone use my name to start and run a business that failed, how do I protect myself from the debts?

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I let someone use my name to start and run a business that failed, how do I protect myself from the debts?

My father had me open a business and
some accounts in my name under the
agreement that he would take care of
everything. The business failed, and he
sold what was left of it. I didn’t get
a dime. Now I am being sued by multiple
companies for the debts he made and
failed to pay. What can I do?

Asked on January 29, 2017 under Business Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You probably can't do anything, other than possibly file for bankruptcy:
1) Your agreement with your father is irrelevant to the creditors of the business, wno are not bound or affected by it, since they were not parties to it--if they are owed money, they can sue you (since the business and accounts were opened in your name)  regardless of the arrangement with your father.
2) Legally, if you father agreed to be responsible for debts (i.e. to "take care of everything"), you could sue him to recover any amounts you owe creditors of the business. But if his only income is SSI and he has few or no assets, you won't get anything: SSI cannot be reached by creditors (e.g. you cannot garnish or execute on it)--he would be "judgment proof."
To explore filing for bankruptcy (and what kind of bankruptcy to file--e.g. chapter 7 or chapter 11)--consult wiht a bankrupty attorney.


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