Personal Bankruptcy Partner(exspouse) declares Bandruptcy

[libertybelle]

Hi I am new to this site, so I hope that someone can help me.

My mom and former step dad owned a business S-corp. It took 3 years for their divorce to become final and a contract agreed upon because of all the fighting over the business and what it was worth.

In the end, last November, he was to pay her 2.3mill. She bought him out of his half of properties to bring down the actual amount he would need to buy her out. That sum was agreed on each month for the next 12 years to be paid on the first. Of course he has failed to do that and paid when he felt like it.

Then last month, he told her that the company was declaring bankruptcy and has stopped paying her altogether(I think he is including her in the debt). She is now losing all of the property she bought him out of because the payments he was to pay her was paying the mortgage on the remainder balances. She has no money to her name as he is in control of all of her money. HOwever, he continues to draw a paycheck from the company

Is this legal for him to do?
What recourse does she have?
Can she take back her part in the business and fire him since he has renigged on the contract?
Can she garinshea(sp?) his paycheck?
Since she has no money, can we file the legal forms against him if she has a recourse

I hope anyone can answer these questions...thanks

 

[libertybelle]

Nobody knows or can help????

So, since no one has answered my question, I am assuming that no one can help me? Well, that is typical for what has happened throughout this divorce. He gets away with whatever he wants to do, while my mom gets no answers or legal justice in a 50/50- no fault -state.

Sigh!

 

[Theresagail]

She needs to get an attorney FAST--- If he files bankruptcy and declares her as a creditor-- she will not be intitled to do anything-- Until that time she needs to get a attorney so he can start looking for assets etc.. and file for a judgement

 

[libertybelle]

Thank you for your input. So what you are saying is that the Law, will allow him to take all of her half of the business and not pay her for it? So he gets to keep the business, declare bankruptcy and walk away with not owing her a cent? That is what you are saying he is legally able to do?

That is the most horrible thing I have ever heard. Screw around on your spouse for years, take all that she has and walk away scott free. Thankfully, there is a higher judge that he will meet.

 

[sfitz]

Unfortunately, the crucial step in this process has already passed--the agreement that they made regarding how much he owed and how much of a stake she had in the company's assets. It sounds like he bought her out for some sum of money that he was to pay in regular installments.

His personal finances are separate from the company's finances, and since the company is declaring bankruptcy, this is a completely separate issue from his own personal assets. Therefore, any personal obligation he has is not relevant to whether the company is bankrupt. I agree that suing for a judgment is probably her best course of action.

 

[dee_dub]

I'm not sure I understand your story. You might try re-stating it. To the extent I do understand it, I can think of a handful of reasons why he might not get off the hook for this. (For one, the fact that the company is going bankrupt does not extinguish his personal obligation to pay her under the agreement.) I would echo the advice of the above posters - she should get a lawyer ASAP.

 

[GaynellWalters]

Re : Bankruptcy

Bankruptcy fraud is a crime. While difficult to generalize across jurisdictions, common criminal acts under bankruptcy statutes typically involve concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and fee fixing or redistribution arrangements. Falsifications on bankruptcy forms often constitute perjury.