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JBaxLaw
JBaxLaw, Attorney
Category: Business Law
Satisfied Customers: 11396
Experience:  Experienced in business formation and licensing issues
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I closed my restaurant in CA few months ago, I still owe less

Customer Question

I closed my restaurant in CA few months ago, I still owe less than $100k on a credit card from BOFA. The LP can't pay the debt and there is no assets besides the liquor license (valued at about $30k) which is in escrow. I was the managing member of the LP under an LLC "umbrella" and I believe the BOFA credit card has no personal guarantee ( I just don't sign that stuff). How is the bank going to pursue this and what can I expect? I also don't have any assets personally (not a homeowner, no business, no income), can they get to me personally? Can my credit score get affected?
Submitted: 7 years ago.
Category: Business Law
Expert:  JBaxLaw replied 7 years ago.
Your personal assets will be shielded. The LLC assets might be at risk of a judgment. As the debt was not issued based on your credit, your credit score should not be impacted. In order for a creditor to go after your personal assets they would need to essentially show the LLC was a sham. For example, if you failed to follow LLC formalities and intermingled personal and LLC funds, this may allow the creditor to "pierce" the LLC veil. This is a difficult task and difficult for the creditor to prove. Most likely you are insulated.

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Customer: replied 7 years ago.
We have limited partners (silent investors) in the LP, can the Bof A go after them?
Expert:  JBaxLaw replied 7 years ago.
The personal assets of the limited partners are protected.

Thank you

Please click on the ACCEPT button for my answer so that I receive credit for assisting you. You may continue to ask follow-up questions after accepting. If the information is helpful, I would very much appreciate positive feedback. Bonuses are also appreciated. The responses do not create an attorney-client relationship and are informational only.