Personal Bankruptcy with and LLC?
I am looking into filing personal bankruptcy but I have a problem. My wife and I are self employed and own an LLC we make very little from this LLC and it has 2 small assets that might not be worth anything maybe less than 0. We only gross 00-2500 a month. Without my wife and I the company is worthless. Our customers would not be serviceable without us. We get all our income from the business. I want to know if we file personal bankruptcy would that mean we can’t do business anymore? Would we have to change our name? Are there any online references that explain this process and how it would go down?
I’m not speaking with any level of authority, but from my understanding, as long as your business doesn’t have any major assets or accounts receivable, you aren’t looking at any major issues. It’ll be treated similarly to you being a contract employee. I assume that you and your wife are filing a joint case. If you aren’t, then you could get into issues of how the LLC will be viewed by the court.
July 6th, 2010 at 11:50 pmSince laws governing forming LLCs are specific to each state, it is hard to say exactly what would happen. In most states, the answer is Yes. By filing personal bankruptcy and listing the business debts, you would be disclaiming your liability for those business debts. The business would still be liable, though. You would continue operating the business but would not "personally" be responsible for debts the LLC incurred prior to the bankruptcy filing.
You will need an attorney to file personal bankruptcy and a local attorney is the best source of information concerning LLC laws in your state. The first consultation with a bankruptcy attorney is free, so be sure to let it be known in your initial consultation the situation with your LLC.
July 6th, 2010 at 11:50 pm