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Can a judgment creditor take money from my LLC bank account?

Chino Hills, CA |
Filed under: Starting an LLC

I have both my personal account and my LLC business account with the same bank, the personal creditor won a judgment and sent the bank an order and seized the money I had in my personal account but not my LLC account. Is this creditor totally barred from taking money from my LLC bank account? And is my LLC account safe from them in the future?

Thanks

Attorney Answers 4

Posted

it will likely depend on who the judgment is against. If the judgment is only against the individual but not the LLC then the LLC account may not be able to be reached to satisfy a personal judgment.

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Posted

If the judgment is not in the name of the LLC, the bank should not release the funds that are in the LLC's name. However, I have seen banks and other institutions do surprising things over the years, such as searching their records and releasing funds, for persons who are listed as authorized signers on an account or for debts that are not under the same SSN as the bank customer, but the name appeared to be the same. No one can say that funds are "safe" in a bank, when there are outstanding collection judgments in your name. Also, what if the judgment creditor learns that you own an LLC and amends the judgment to name the LLC or sues the LLC as a co-debtor? Then the bank would be required to turn the LLC's funds to help pay the judgment.

Robert Stempler (please see DISCLAIMER below)
www.StopCollectionLawsuits.com

NOTICE: The above statements are provided for general information purposes only and are not intended as legal advice or advice of any sort for a specific case or legal matter. If you do not have a signed attorney-client fee agreement with the Consumer Law Office of Robert Stempler, APLC ("the Firm"), then until such written fee agreement is provided and signed by both a prospective client and attorney for a particular case, neither Mr. Stempler nor the Firm will represent you nor will they be your attorney in any matter and you remain responsible for retaining your own attorney and for compliance with any and all deadlines and for any statutes of limitations that may pertain to potential claims. Comments made on a public forum, such as Avvo.com, to not have any confidentiality because others may read them. If you desire a private consultation with Mr. Stempler that is confidential, please go to www.StopCollectionLawsuits.com and submit a free eCase Review.

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Posted

If the LLC is registered under a different tax identifying number than your social security number, you have some protection.

Another bank nearby?

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Posted

I assume from your question that the judgment is against you personally and not against the LLC. LLC's are considered to be a separate entity from its members. Consequently, your judgment creditors cannot seize assets of the LLC. However, your interest in the LLC may be subject to attachment.

You should also be aware that if you start to use the LLC bank accounts to shelter your personal money from your personal creditors, you run the risk of eroding the separate identity of the LLC. In that case, your creditor can make a post-judgment motion to deem the LLC an alter ego of you and go after the LLC's assets.

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