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What happens if you pay a personal debt out of a business account?
Wiki User
∙ 15y ago
That may constitute a mis-appropriation of funds, and you may have to pay the business account back ... and soon. It also depends on the form of the business (Corporation, sole proprietor, etc). At the very least the business would get the expense deduction and have to report it one way or another (1099/W-2). You would either have to take it as ordinary taxable income, payroll (most likely...worse case, include FICA, etc...just as when a business pays for anything for it's employees/owners (like a car)), and the best 2 cases, if done correctly, would be as a dividend or return of capital.
Wiki User
∙ 15y ago
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If you inherit your fathers small business when he dies and and you take over the business are you resposible for his credit card debt?
If the credit card is drawn against the business, that is if it is a business account, then yes. If the card is a personal card, then his estate is responsible for payment of any outstanding debt. Since the business is part of his estate, if in probate it is determined that the business owes the debt, then yes, you or rather the business is responsible.
If your debt is not included in the credit bureau can you be sued by the debtholder?
A debt does not have to be reported to a credit bureau in order for the business to pursue collections, sue or place the account with a collection agency. If a debt is owed, it can be collected by phone calls, letters, personal visits or through the court system.
Your joint account with your wife had been frozen due to a debt she owed Can your personal account be frozen too as a result of that?
If a joint account with a wife had been frozen because of a debt she owed, a husband's personal account can also be frozen, but it depends on when the debt was acquired and who the money is owed to. A legal professional will be able to advise a person about the laws of their state as it may differ about community property laws.
Who is responsible for business credit card debt?
The business is, provided the charges were for business related or permitted personal purchases. Most businesses, however, have policies for personal purchases on company plastic, and procedures for paying back the company. If personal charges are not permitted, then the card holder will be required to pay back the debt.
Can business credit card debt affect my personal credit card balance?
A business credit card debt can affect someone's personal credit card rating. A credit report for an individual is processed by activity of one's overall credit. This means that having debt for a business credit card can hurt a person's chances of receiving lower interest for a home finance loan.
Can a business checking account be garnished for a personal debt?
If it can be proven that the debtor has placed private funds in the account to avoid seizure by a judgment creditor.
Non business bad debt personal loan?
It's a personal bad debt
If you inherit your fathers small business when he dies and and you take over the business are you resposible for his credit card debt?
If the credit card is drawn against the business, that is if it is a business account, then yes. If the card is a personal card, then his estate is responsible for payment of any outstanding debt. Since the business is part of his estate, if in probate it is determined that the business owes the debt, then yes, you or rather the business is responsible.
How do you make a journal entry paid business debt on account?
Debit debt accountCredit cash / bank
Debt created by a business when it makes a purchase on account is term as?
Creditor
If your debt is not included in the credit bureau can you be sued by the debtholder?
A debt does not have to be reported to a credit bureau in order for the business to pursue collections, sue or place the account with a collection agency. If a debt is owed, it can be collected by phone calls, letters, personal visits or through the court system.
If you file for small business bankruptcy will they take your house?
If your business was a sole proprietorship, you have unlimited liability for any debt your business holds, and therefore your business debt is your personal debt. If your business had a form of limited liability, particularly if it was an LLC, this cannot happen.
Can creditor take your house for business debt?
That depends, is the business a Partnership or Sole Proprietorship? If it is one of these personal assets can be seized to make up for business debt. If your business however is an LLC (Limited Liability Corporation) than personal assets are not associated with the business and therefore not at risk.
Do debtors and accounts receivable mean the same thing?
No. A debtor is someone who owes money, and the debt is the money he owes. An account receivable is an amount of money due to a business arising in the course of the business. Accounts receivable are debts and the people who are bound to pay them are debtors. However, debts can arise in circumstances that have nothing to do with the operation of a business. In such a case, the term "account receivable" which is only applicable to business accounting does not apply. The money owed is a personal debt.
If your spouse has a personal bank account frozen to collect consumer debt is your personal bank account also at risk of being frozen in the state of new york?
If the account has his name on it, possibly.
Is purchasesaccount debit or credit?
Purchases account is personal account in nature and basic rule for personal account is debt what comes in and credit what goes out so purchases is a debit balance as a default balance.
Your joint account with your wife had been frozen due to a debt she owed Can your personal account be frozen too as a result of that?
If a joint account with a wife had been frozen because of a debt she owed, a husband's personal account can also be frozen, but it depends on when the debt was acquired and who the money is owed to. A legal professional will be able to advise a person about the laws of their state as it may differ about community property laws.
