If I file for Bankruptcy personally does that affect any business assets I have under a Single Member LLC?
I have a lot of personal debts that I would like to file for bankruptcy for a fresh start. However, I have a rental property in a single member llc and I don't want to lose it. Nor do I want to include it in my bankruptcy, but I don't want to be deceitful.
- Anonymous7 years ago
You are right in not wanting to be deceitful. It is not worth it and if you decide to file bankruptcy you need to be an open book.
Your membership interest in the LLC would be an asset of your bankruptcy estate. Whether the bankruptcy would affect the business will depend on the value of your membership interest and your available exemptions (exemptions being the property you are allowed to keep when you file bankruptcy). The value of a single asset LLC is likely close to the equity in the asset. In other words, the fair market value of the rental less any loans against the property. Your exemptions will depend on where you currently live and where you have lived for the last couple years.
As you can see, more information about your personal situation is needed to adequately predict whether your personal Bankruptcy would affect the LLC. I recommend you consult with a local bankruptcy attorney that can look closely at your situation. Including myself, most bankruptcy attorneys do a free consultation.
You can also do your own research with the sources below.Source(s): http://www.attorneydebtreset.com/ http://www.attorneydebtreset.com/start-fresh-overv... http://www.nolo.com/legal-encyclopedia/maryland-ba...
- YirmiyahuLv 77 years ago
you own the LLC. The LLC has value. Consequently, either the LLC or its assets will be included as part of your personal net worth.