Can I start business in my name to do the work of husband’s business which has debts that arein collections?
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Can I start business in my name to do the work of husband’s business which has debts that arein collections?
My husband has a construction business as a sole proprietorship. Due to the economy he was forced to max out credit cards that were in the business name and his. The credit cards are in collections now. We were told that if he was sued our home couldn’t be touched due to it being TBE and that our bank accounts shouldn’t be due to being joint but that they would try anyway. I don’t know if the business accounts are considered joint that I have authority to sign the checks. Is there any legal reason why I couldn’t start a business in my name doing the same work?
Asked on April 16, 2011 under Business Law, Pennsylvania
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I am sorry but I do not recognize the term "TBE" as it relates to your house. What I can tell you is this: a sole proprietor can be held personally liable for any business-related obligation. This means that if your business doesn't pay a supplier, defaults on a debt, or loses a lawsuit, the creditor can legally come after your house or other possessions. Business accounts are not necessarily considered joint in the sense you mean it but that may not matter here anyway. I really think that you need to seek some help here from a financial adviser and try and sort through the business issues and how they relate to you as soon as you can rather than to try and avoid creditors by starting a business in your name. If the business has assets and has an income coming in you may just need to buy some time. Good luck.
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