Bankruptcy And LLC
A friend was talking about this the other day and I thought I would ask you all what you think.
If someone is going to declare Chapter 7 and they also started an LLC, how is the LLC affected? Is the LLC an asset of the person, because I thought the entity was seperate from the individual in all ways.
Best Regards,
[addsig]
Shares in Corp and LLC and any holdings would have to be declared in ank BK case. In a 13 case if you had equity in the shares and wanted to keep them you would have to pay for them thru the plan. In a 7 case you may have to surrender stock etc to the trustee. The idea is to BK the company and not yourself if trouble arrises. Even thought it is separate it is still an asset owned. Just like any other stock etc. your personal bk would not affect the company unless you happen to be the only stock holder. It can get really complicated.
Good LUCK and Thank You
Hope this helps some
Ted Jr
What it looks to me is that you want to hide some asset in LLC before you declare personal bankruptcy? Kindly confirm if this is the intention so others can help you more on the particular aspect of the move.
In general, LLC are invented & created to separate you individually form your business. It is in hart a partnership with the corporate umbrella on the top and is also tax transparent (pass true) so you do not get taxed twice like in C Corp.
if you planing bank collection evasion down the line that's unethicla but people do it anyway. I remember actor Bert Reynolds buying a 2 million mention (several years back) in FL, just in about the same time he filed for personal bankruptcy. Under the FL law home is exempt. so creditors couldn't touch it. TX has similar laws and I heard that CA also relaxed it's laws so now you can claim the same examption her as well.(?).
However, my advise to you is be careful while you walking through the legal minefield. A good bankruptcy attorney might be willing to point out to you where the mines are, but only if the questions are asked in the right way.
Good Luck!