Can a business bank account be frozen to pay a personal debt?
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Can a business bank account be frozen to pay a personal debt?
My husband and I are self-employed and the bank accounts we use for both personal and business are set up in our names DA our business names. Can these accounts be frozen to pay a personal debt that we have a judgment on?
Asked on August 26, 2010 under Bankruptcy Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
If the accounts are "owned" by your and/or your husband, then even if they are used for business purposes, they are personal accounts; as personal accounts, they are reachable by your creditors with the proper court order. It would be a very different story if you have LLCs or corporations (including sub-S corporations) set up, and the accounts belong to the LLC or corporation; in that event, they would *not* be personal assets and would not generally be reachable by personal creditors. If you have not done so yet, you wish to set up LLCs (or corporations; though LLCs are usually better for the self-employed) and use them for business purposes, to insulate your businesses from personal liability and yourselves personally from business liability. It's usually a good idea for the regularly self-employed.
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