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Are the assets in my new LLC immune from collection of past personal debt

Duluth, MN |

previously had an s corp that failed had personal debt incurred for the business used personal credit cards for business use etc. roughly 5 years ago. want to now start an LLC.

Attorney Answers 4

Posted

Not necessarily. If you transferred all of the assets into the LLC to avoid the debt (or without getting reasonable value in return), the creditors may seek to reverse the transactions as fraudulent conveyances.

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Posted

I don't understand why you don't file for bankruptcy so that you can start this LLC on a clean slate. Are there significant assets that you are trying to protect?

The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: www.avanesianlaw.com for more information about my services.

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Posted

Probably not. It sounds as if you are moving personal assets into your LLC, which your creditors will deem a fraudulent conveyance to avoid paying them.

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Posted

You are going to have to sit down with any attorney who knows the law. What you're proposing is fraught with peril. If you have nonexempt assets, the transfer presents a potential problem (as possibly fraudulent under 11 U.S.C. § 548). If this is a single-member LLC, you may have other problems. Pursuant to section 541(a) of the Bankruptcy Code, the trustee could potentially cause liquidation of the LLC. See In re Albright, 291 B.R. 538 (2003). Please note that general advice on Avvo simply will not do.

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Jeremy Judson Cobb

Jeremy Judson Cobb

Posted

...with an attorney...

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