Question by Adam: how are single owner LLCs treated in bankruptcy court?
Are the assets in my LLC safe, or will these be considered part of “me” during bankruptcy?
How would it change if I made a truster other a co-owner?
I’m aware they look back at 6 months of financial transactions for the filer. But if it’s self-owned, does the LLC end up getting put through the wringer too?
Thanks in advance!
Best answer:
Answer by crb
The assets in the LLC are owned by the LLC, however YOU OWN THE LLC!
When you file a Chapter 7 BK, the trustee steps into your shoes and can sell your interest in property just like you can – that includes your interest in the LLC. Also, if you’ve been sloppy about keeping personal and business finances separate, they may be able to “pierce the veil” and disregard the LLC altogether.
Also, the presumed lookback period for insider transfers is 1 year.
Making someone else a co-owner is very likely to make your situation significantly worse.
Nearly all consumer bankruptcy attorneys offer free consultations. Take advantage of this to find one that you are comfortable with and who will evaluate and explain your options to you based on the details of your particular situation.
Give your answer to this question below!