Can We File Bankruptcy on Our Personal Debt and Not Include My Husband’s LLC? – Brandi

“Dear Steve,

Husband owns a LLc company with him being the only employee. I work part time thur a employer. I have tried unsuccessfully to find a full time job. Need help with personal credit situations without hurting our business.

My husband owns a llc company that is the main income in our house. The company is in fine shape credit wise, but our personal credit is behide due to most of our main income going back into the business. We have credit card debt and also we are behind on our morgtage. Can we file for bankruptcy to help with our personal situation and not touch our llc? We do run the llc out of our home.

Brandi”


The Answer:

 

Dear Brandi,

The limited liability company (LLC) is a separate legal entity from you so you could go personally bankrupt. The only issues are going to be if you personally guaranteed any of the business debt or business equipment the company currently uses. Additionally the value of the LLC may have to be factored into your assets.

All of these things can easily be addressed by a bankruptcy attorney. I think you should find a local bankruptcy attorney you like and go in and see them. The both of you should go so you can be sure to ask all the LLC questions and leave that appointment feeling confident in what you learned.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

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@GetOutOfDebtGuy

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  • http://www.ohdebtcounsel.com Jeff Jackson

    Great Advice from Steve.

    A major problem with smaller businesses is the co-mingling of both the assets and liabilites.

    The LLC should have its own banking accounts, credit cards, loans, and assets completely separated from personal accounts, liabilities, and assets.

    The tricky part is when the LLC creditor requires personal quarantees as well.

    Make sure you have accurate P&L statements on your LLC.

    Consult a local bankruptcy attorney or two or three and divulge everything.

    Best of Luck

    • http://GetOutOfDebt.org Steve Rhode

      Jeff,

      Thanks!

      Steve