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Old 26th April 2010, 05:10 PM   #1
pcs
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Default Personal Debt On A Sole Proprietor

Can a creditor take money out of a business account I setup if I am a sole proprietor?

I am not talking about business debt but a personal debt incurred before the business was setup.

I know that my business debt would be my personal responsibility but I don't know if it works the other way too.

I am not setting up this business to try and dodge my debts, which I plan on paying back, but I don't want them to empty my account when I start getting clients.

Thanks

sorry if this gets double posted but nothing has show up after a few minutes.

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Old 26th April 2010, 09:58 PM   #2
Robert
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Originally Posted by pcs View Post
sorry if this gets double posted but nothing has show up after a few minutes.
No problem at all. All posts from new members are pre-moderated before they go live. (helps reduce spam)

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Old 1st May 2010, 10:54 PM   #3
cfoservices
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Originally Posted by pcs View Post
Can a creditor take money out of a business account I setup if I am a sole proprietor?

I am not talking about business debt but a personal debt incurred before the business was setup.

I know that my business debt would be my personal responsibility but I don't know if it works the other way too.

I am not setting up this business to try and dodge my debts, which I plan on paying back, but I don't want them to empty my account when I start getting clients.

Thanks

sorry if this gets double posted but nothing has show up after a few minutes.
I am not an attorney, but I believe a creditor can take money out of a business account if you are a sole proprietor. Now if you were incorporated then they would have much more difficulty and they would have to seize your stock. The issue with a sole proprietorship is that there is nothing that comes between you and the business. You are the business and your are the debtor whether it is personal or business.

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Old 15th May 2010, 10:48 AM   #4
phanio
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As a sole proprietor you are your business and your business is you. There is no seperation between the two. Thus, you business debts are your personal debts and your personal debts are your business debts.

My question is why does the creditor have access to your accounts - they should not. If they do, move your accounts.

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Old 19th June 2010, 10:32 PM   #5
sequoia payroll
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As a sole proprietor you are your business and your business is you. There is no seperation between the two. Thus, you business debts are your personal debts and your personal debts are your business debts.

My question is why does the creditor have access to your accounts - they should not. If they do, move your accounts.
Could be a lien on account and the bank is obligated under law to comply...

As was mentioned, if you are a sole proprietor there is no difference in a business account and a personal account. If a creditor has access to your account as a type of garnishment under law, then you really can't escape. However, if there is no law in place, you could move your accounts and not disclose that info to the creditors.

I am in no way endorsing bank account closure. I vote to pay your debt ASAP, and move on with your business venture.

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