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

Asked about 1 year ago - 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)

  1. Scott Benjamin Riddle

    Contributor Level 19

    9

    Lawyers agree

    Answered . 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.

  2. Jeremy Judson Cobb

    Contributor Level 14

    5

    Lawyers agree

    Answered . 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. ยง 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.

  3. Michael J Corbin

    Contributor Level 20

    4

    Lawyers agree

    Answered . 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.

    We can be reached at 507.334.0155 (Toll Free: 888.777.5009). Our web address is: www. corbin-law-office.com.... more
  4. Michael Avanesian

    Pro

    Contributor Level 16

    1

    Lawyer agrees

    Answered . 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... more

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