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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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If a debtor filling a chapter 7 BK is in the business of fixing

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If a debtor filling a chapter 7 BK is in the business of fixing up and selling homes. The business is registered as an LLC and the homes are business assets. He is the principal of the LLC. How would that property be treated in the BK?

cfortunato :

Is the debtor the sole owner of the LLC?

cfortunato :

Hi JACustomer,

cfortunato :

Is the debtor the sole owner of the LLC?

Customer:

Yes

cfortunato :

Thank you for your response.

cfortunato :

If the debtor is the sole owner, all property owned by the LLC will be treated as if the property was owned directly by the debtor (personally).

Customer:

OK, so if I understand correctly the LLC offers no distinction between personal and business assets

cfortunato :

That is correct - as if the LLC is solely owned by the debtor, then everything the LLC owns belongs to the debtor.

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