Estate Law Questions? Ask an Estate Lawyer.
Good day. I am Loren, a licensed attorney, and I look forward to assisting you.
A revocable trust provides no protection from creditor claims since the assets remain in your control.
Signing half the assets over to a third party would not work either since the bankruptcy trustee can void the transfer as a transfer in contemplation of bankruptcy for the purpose of defrauding creditors.
While the assets are protected if the are held in an LLC, your LLC interest is subject to a charging order or attachment by creditors.
Frankly, protecting nonexempt assets in personal bankruptcy is very difficult, but the list of exempt assets can be quite extensive and can cover homestead, personal property used for work, cars, etc.
As secured creditors then they will be entitled to foreclose on the collateral.
The bankruptcy would affect all assets.
If you can not work you would only qualify for chapter 7, which is a liquidation, not a reorganization.
You would likely be in default of the note by filing bankruptcy, even without scheduling the debt.
Talk to the credit card companies first and see if you can arrange for some sort of relief from them without filing for bankruptcy. They may allow interest only payments or some other sort of forbearance to assist you and keep you out of bankruptcy.
Probably not, though the LLC membership interests (not the properties themselves) may have to be scheduled as assets.
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