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Ely
Ely, Counselor at Law
Category: Bankruptcy Law
Satisfied Customers: 101758
Experience:  Licensed attorney in private practice.
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I have a company I run under an LLC however, since I am the

Customer Question

I have a company I run under an LLC however, since I am the only owner I file a schedule C on my taxes. I've run into some debt issues and considering a bankruptcy. Can I file a BK on my LLC and not my personal life?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note:This is general information and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I am sorry to hear about this situation. Yes, of course. An LLC is considered a separate legal entity from yourself. As such, a bankruptcy may indeed be filed on an LLC. However, it would be a different type of bankruptcy, normally a chapter 11 rather than chapter 7 or 13.

I hope this helps and clarifies. Gentle Reminder: Use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how I get credit for my time with you. Rating my answer the bottom two faces/stars or failing to submit the rating does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith.

Customer: replied 1 year ago.
just to clarify I would not necessarily have to file a BK on myself correct? What is the determining factor on doing that? I have household income (spouse) however, I have no assets, all are in my spouses name premarriage.
I have no personal income except for my business.
Expert:  Ely replied 1 year ago.

Correct. The LLC is a separate entity and can have a bankruptcy filed on itself. See HERE for more. However, some debts may "seep" through to have one be personally liable (see link) depending on nuanced details.

Gentle Reminder: Please, use REPLY or SEND button to keep chatting, or RATE POSITIVELY and SUBMIT your rating when we are finished. You may always ask follow ups at no charge after rating.

Customer: replied 1 year ago.
Ok, I'm sure 1 or 2 of my loans are personal guarantee loans so then yes, they can come after me personally. However, if I have no personal income and no assets what is their recourse?
Expert:  Ely replied 1 year ago.

Yes, a personal guarantee can have them come after you personally. You can always file a personal BK, of course.

If there is no income, they can do the following:

-garnish up to 25% of any income if there was
-levy a bank account (some pensions and government help is excluded)
-lien a titled property
-attach and sell non-exempt personal property for satisfaction of judgment

Gentle Reminder: Please, use REPLY or SEND button to keep chatting, or RATE POSITIVELY and SUBMIT your rating when we are finished. You may always ask follow ups at no charge after rating.