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I am going out of business and can't afford to pay off a…

Hi, I am going...

Hi, I am going out of business and can't afford to pay off a $9,000 debt that I owe. I can't file bankruptcy because I don't qualify. The debt is on my LLC company. Is there a way I can absolve this without it affecting my credit or going to collections?

Lawyer's Assistant: What state are you in? It matters because laws vary by location.

Colorado

Lawyer's Assistant: What steps have you taken so far?

Nothing yet

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

No, thank you

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Answered in 1 minute by:
3/27/2018
Lucy, Esq.
Lucy, Esq., Attorney
Category: Legal
Satisfied Customers: 32,264
Experience: Lawyer
Verified

Hi,

I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear about your dilemma.

Did you sign a personal guarantee for the debt?

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Customer reply replied 3 months ago
I have not
Customer reply replied 3 months ago
I am in Colorado, and my company is an LLC

Then it won't affect your credit at all. You're not liable for debts of the LLC and vice versa.

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They could sue the LLC and get a judgment, which will affect the LLC's credit, but that may not be an issue if you're going out of business.

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Customer reply replied 3 months ago
do I just ignore it, or what is the next step for me? I don't qualify for bankruptcy. Thank you.
Customer reply replied 3 months ago
should I absolve my LLC?

You can look into whether the LLC qualifies for bankruptcy, because that would be separate. You could see if they'd agree to settle for a lesser amount. But you don't have to pay if the debt is in the LLC's name. They have to pursue the LLC for payment.

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Customer reply replied 3 months ago
I don't need to respond to anything else then? And I don't need to absolve my LLC?

Do you mean dissolve the LLC?

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Customer reply replied 3 months ago
I meant dissolve, thank you

Typically, when an LLC is out of business, you would dissolve it to avoid paying the annual renewal fees to the state. There's no reason to keep it open if it's not operating. And if the debts exceed the assets, you wouldn't want to use it to start another business - that would just put you back in a position of needing to pay the debts.

Lucy, Esq.
Lucy, Esq., Attorney
Category: Legal
Satisfied Customers: 32,264
Experience: Lawyer
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Lucy, Esq. and 87 other Legal Specialists are ready to help you
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Customer reply replied 3 months ago
I could continue to operate in business under the current LLC? And it wouldn't affect any other business I do under the LLC?
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