C13/7 AND LLC Co

[motomom]

Morning,

May be a silly question. I am self employed, no employees and my co is an LLC. Is an LLC treated the same in BR as a non-LLC or non-Inc business?????
Just checking to make sure my ducks are in a row.......

[StartingOver08]

The LLC is considered an asset of yours.

If the LLC has debt that you have personally guaranteed (which is typical) then you would include the debt in your personal BK.

If the LLC has assets, the Trustee may be interested in those assets. Look at this link: http://www.moranlaw.net/struggling.htm

Where it becomes difficult is if the business is doing ok, but you need to file personal BK, then your business is at risk. If the business would not exist without your presence and the business has no tangible assets (except for you and your knowledge), then you are probably safe because the business can not exist without you.

You will need to find an attorney that is knowledgeable in this area so you do not end up losing your business unnecessarily.

In my case, although the business could not exist without me, I had to close the S-Corp and continue to do business as a sole prop. I will open another S-Corp when the volume picks up again. The reason I had to close the S-Corp is because I only filed personal CH 7 and the business debts can get a judgment in the business name and sieze my business account if I continued operating in the S Corp name. For me, it was prohibitively expensive to file a business BK - and unnecessary. I was able to achieve a better result by filing personal Ch 7.

[motomom]

Thank you! I was on the same page just wanted to confirm since I was LLC you never know about these little things. Greatly appreciated.

[SweetGeorgia]

You'll need to talk to a lawyer. It depends on your own assets and liabilities, the LLCs assets and liabilities, and whether you guaranteed the LLC's debts personally.

We're not filing for our LLC because it only owns a piece of rental property (so we're just letting the property go back and the LLC die). The property is an asset of the LLC, the mortgage is a debt BOTH of the LLC and for us.

The good news is that if your debt is mostly business debt, you can file Chapter 7 without doing the means test (allegedly. Our lawyer is still having us fill it out.)