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After getting laid off early last year, I formed an LLC partnership

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last year in which I...
After getting laid off early last year, I formed an LLC partnership last year in which I am the majority owner but do have partners. I had a judgement for one of the cards and they just did an "execution judgement" and took the last $400 I had in my personal acct. Our LLC account is at the same bank as the personal acct. Can an "execution judgement" be used against the LLC account?   I just received a significant business loan through a private quasi-government agency (regardless of my credit) which we had to sign everything away for in case of default (but I have no 401k or house equity left). I am also pondering personal bankruptcy due to credit card debt ($18K) incurred independent of the LLC. It took a lot longer then expected to get the loan and it has left me between a rock and a hard place. The LLC will not be generating income for another 4 months. I also kept the company legal plan and will use it next week but am looking for some guidance to start off. Thanks!
Submitted: 8 years ago.Category: Bankruptcy Law
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Answered in 36 minutes by:
7/3/2009
Bankruptcy Lawyer: Maverick, Attorney replied 8 years ago
Maverick
Maverick, Attorney
Category: Bankruptcy Law
Satisfied Customers: 6,426
Experience: 20 years of professional experience
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The judgment cannot attach directly to LLC bank account since the LLC is a separate legal entity. However, your ownership interest in the LLC is considered personal property to which the judgment could attach.

 

As of 10/2007 Connecticut had the exemptions listed at the link below:

 

http://www.naldp.org/download/exemptions/Connecticut%20EXEMPTIONS.pdf

 

 

The assets listed there would be exempt from being attached by a judgment. After the 2005 BK law changes, it is difficult to qualify for Chapter 7 bankruptcy, however, since you have not had income for some time, you may still be able to. Under a chapter 7 BK, however, you go through a liquidation that will wipe out your debts, but it will also force you to give up your non-exempt personal property. So, the better alternative may be a chpater 13 plan where you work out a payment arrangement with your creditors over the next 3-5 years and get your unsecured debts and some secured debts reduced.

 

The thing that you may want to look into is that the loans you have personally guaranteed may have a provision in them that says that they become immediately due if you file BK. Then BK would not be a good idea. Please click "ACCEPT" so I can get credit for my work. We can continue our conversation after this at no additional charge.

 

Maverick
Maverick, Attorney
Category: Bankruptcy Law
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Experience: 20 years of professional experience
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Customer reply replied 8 years ago
Thanks for the answer.
Bankruptcy Lawyer: Maverick, Attorney replied 8 years ago
Sure.
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Customer reply replied 8 years ago
Thanks for the answer. I have another question, I am also newly married, my wife was not on the account for any of the aformentioned credit cards. Can they attempt to attatch her back account? I am not listed on her account, but she was listed on my personal account.
Bankruptcy Lawyer: Maverick, Attorney replied 8 years ago
Assuming that all the debts on the cards were accrued before you got married, then they will most probably be treated a your separate debt and thus not having anything to do with the marriage. Thus, they will not be able to attach her separate bank account. Usually they can garnish at least 1/2 of any account where you and she are listed together. HOwever, the laws vary from state to state and the exact type of joint account that you have together.
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Customer reply replied 8 years ago
Thanks for the peace of mind and have a great holiday weekend.
Bankruptcy Lawyer: Maverick, Attorney replied 8 years ago
Happy 4th to you too!
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Maverick
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