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mmdesq
mmdesq, Attorney
Category: Bankruptcy Law
Satisfied Customers: 516
Experience:  Attorney with 13 years experience.
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I control two pieces of real estate that are owned by a sole

Customer Question

I control two pieces of real estate that are owned by a sole member LLC. The sole member of that LLC is a trust of which I am trustee. This was all created in 2011. Would these properties be assets if I filed personal bankruptcy?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  mmdesq replied 1 year ago.

Good Afternoon,

I will try to best answer your question.

A bankruptcy trustee steps into the same shoes as the debtor in terms of ownership of assets. To the same extent that you have rights as a trustee of your trust, and and you as the trustee would have rights as a the sole member of the LLC so too would the bankruptcy trustee.

I would be very concerned that the trustee is going to have access to any equity that exists in the LLC assets. Please remember that once you file a chapter 7 bankruptcy you cannot just simply choose to discontinue.

It is a very smart move on your part that you are asking these questions in advance of filing. Most people ask these questions when it is too late, after filing. I would recommend meeting with a bankruptcy attorney to review the equity in the assets of the LLC to see if there is anything that the bankruptcy trustee can attach to assuming the bankruptcy trustee would have access. If there is not excess equity you may not have an issue.

I hope that this information and advice is helpful and I wish you the best of luck.