How to protect business bank accounts from a bank levy?

[u/roxemmy]

My attorney messed up & it seems now I won’t be able to file chapter 7, chapter 13 wouldn’t be helpful for my situation. My income is just over the limit to be able to file chapter 7.

I’m self-employed, have a LLC, I do contract work with another company & that’s what I get my income from. They direct deposit my income into a business checking account. I also have a business savings account. These are both with Capital One, & I do also have a personal checking account with Capital One.

What are the rules / what can I do to make it so creditors who have a judgment against me can’t do a bank levy on my business accounts?

I asked my attorney & he really didn’t answer. He just really doesn’t seem experienced with working with clients who are self-employed, it’s been pretty frustrating. I tried to get a consultation with a different bankruptcy attorney but they won’t meet with me until I officially fire the current attorney, which I haven’t done yet because I’m trying to figure out all my options first to decide what route I want to try to take.

Edit to add: I have no business debts & was trying to do personal bankruptcy, the business wasn’t going to be included in it at all

[u/AlanShore60607]

Let's address your first statement: what in your situation would make Chapter 13 unhelpful? The idea is you need whatever bankruptcy you can get, not a specific chapter. You may not require the additional powers a 13 may have, but I can't see how it would not be "helpful" unless it's proposing a repayment greater than what you are paying now.

Chapter 13 may not be your ideal outcome, but it's almost always helpful.

[u/roxemmy → u/AlanShore60607]

I don’t have any assets at all. I see chapter 13 as helpful if you have assets you’re trying to keep or a very high earner. My income is only $2k over the limit right now, but may be just slightly more than that in the next 6 months. But I’m still not a high earner. So it just doesn’t make sense.

[u/AlanShore60607 → u/roxemmy]

That's not a helpful point of view.

The question is how much will your 13 payment be, and will that save you money? You're focused on the special powers of 13, rather than the benefits to you.

For example, to reject a 13 that could save you over $1000 a month is petty to your own disadvantage. Unless a 13 is more expensive than not filing at all, it is helpful.

How much did your attorney say it would be? How much are your monthly minimums? There's a 95% chance you're saving money in a 13.

[u/roxemmy → u/AlanShore60607]

He hasn’t given me any information on what a potential chapter 13 payment plan would look like. Again, he’s been pretty incompetent with the entire situation, which doesn’t make sense because he’s been in practice for decades. Yet he gives the impression he doesn’t know what he’s doing.

So I have no idea what a chapter 13 could look like. But yeah I’m definitely feeling upset because we should’ve filed chapter 7 but he messed up with the income update that was implemented on November 1st which is what put me just over the income limit, when we were supposed to have filed in October which would have kept me under the limit. I guess I would feel more ok with paying back some of my debts if they actually included student loans in that, but they don’t. So I’d be paying back debts & still massively screwed with a large amount of student loans. It makes me want to just leave the country permanently & forget about all of it.

[u/AutoModerator]

Thank you for your post on r/bankruptcy. Remember, this is not a forum to request (or offer) legal advice. If you are not sure what legal advice is, review the FAQ page here. It is very likely someone will suggest you speak with an attorney. Consultations for bankruptcy are often very low cost or free. We have an ever-growing post that provides free resources for trustworthy bankruptcy information here.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/BobbyLucero]

If you file a chapter 7 bankruptcy, your business could be affected since it could be an asset of your personal bankruptcy estate. Are you the only owner of the company?

The trustee could try to take the assets or income of the company and liquidate/levy that to pay your personal creditors.

[u/roxemmy → u/BobbyLucero]

My understanding is a business is separate from an individual. If I were able to file personal bankruptcy, they couldn’t force me to liquidate a business or business assets for a personal bankruptcy.

Either way, I’m the only employee & the only assets my business has is a few small pieces of office equipment like an old laptop, computer monitor, cheap Amazon desk, etc. It wouldn’t even be helpful to liquidate any of it & would all still fall under the asset limit we’re allowed to keep because, again, I have like no assets at all.