Do I need to file for bankruptcy?
April 9, 2009 by Information About Bankruptcy
Filed under More Bankruptcy Answers
Can you answer Chgo1978’s question about Bankruptcy?:
I currently operate a business under an LLC. We are closing the business and would like to file bankruptcy under the LLC. I loaned the business thousdans of dollars from my own personal credit cards… Can this debt be included in the LLC bankruptcy? Or would I have to file personally as well?
Get a Money-making Website
I currently operate a business under an LLC. We are closing the business and would like to file bankruptcy under the LLC. I loaned the business thousdans of dollars from my own personal credit cards… Can this debt be included in the LLC bankruptcy? Or would I have to file personally as well?
Get a Money-making Website
Bankruptcy Feedback: Your best bet is to ask a bankruptcy attorney. They can give you the best advice because the bankruptcy laws have changed.
Bankruptcy Feedback: When your LLC goes bankrupt you will be one of the creditors who doesn’t get paid. You will have to suffer the loss just like all the other creditors.
Bankruptcy Feedback: the bankruptcy attorney or any attorney can answer this question.
Hire an attorney, don’t guess.
Bankruptcy Feedback: In general, depending on exactly how everything was set up, you would not be able to declare your personal credit cards in the BK for the LLC.
If it was a loan, you would be listed as a creditor on the BK. During the Bankruptcy proceedings the court will determine all of the assets and disperse what assets there are to you as well as other creditors. If you are unable to pay on your credit cards you would have to declare personal bankruptcy as well.
Just be careful what you do. If you all of the sudden decide to pay yourself back for the loan, the Trustee will see that as showing preference to a creditor(namely yourself). In that case you would be ordered to return the money to the LLC. At which time it would be dispersed to all of the creditors.
This is why before you do anything you need to talk to an attorney. As they can advise you of your specific situation.
Bankruptcy Feedback: OC is correct.
The whole purpose of running your business as a LLC is to separate and insulate your personal assets from the business. By loaning yourself money you totally messed it up.
Why didn’t you just get a line of credit for your LLC?
Good luck, but follow OC’s advice.