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VanDLaw
VanDLaw, Attorney
Category: Bankruptcy Law
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Experience:  Chapter 7 & 13
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My wife and are married two years ago. We currently operate

Customer Question

My wife and are married two years ago. We currently operate an LLC in RI as co-owners. She has credit cards and a bank account in her name only. I have credit cards in my name only. My question is can I file individually for a chapter 7? We have no income except for the business and we started it only 6 months ago. Some business purchases were made with her credit card initially. I do not want to file bankruptcy if it will negatively affect our business--loss of assests etc. For example, we have a delivery service and purchased the van for cash--out of an account in her name only. If I file personal bankruptcy, can the van be taken from the business? We have only about 5K in cash with the business now and I have credit card debt (9 years old) of approximately $40,000. thanks.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  VanDLaw replied 5 years ago.

HelloCustomer

 

I will be happy to assist you. First, you can file bankruptcy individually if married. Your Wife's debts that are solely in her name would not be discharged, and any debts you hold jointly would then be her sole responsibility.

 

The LLC and assets and debts owned by the LLC are not included in your personal bankruptcy, so any debt owed your company is also not included and will not be discharged. Any assets owned by the company, such as the Van, if it was purchased by the LLC would most likely not be a part of the bankruptcy.

 

However, your interest in the LLC is an asset of your bankruptcy estate. It will depend on the LLC's worth, the bankruptcy court is looking for assets to liquidate to pay creditors. There are also exemptions available under your state's laws, so you may be fine, but the LLC will have to be listed on your schedules. There is really no way to know without having a consultation with a bankruptcy attorney in your area.

 

NOTE: Your credit card debt may be outside of the statute of limitation for collection, so it may be a non-issue.

Expert:  VanDLaw replied 5 years ago.
The statute of limitations for open accounts (credit cards) in Rhode Island is 10 years. If the do not have a judgment yet, they may be getting ready too, because after 10 years they cannot obtain a judgment.

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