I have an insurance company claim that has been turned over to collections. I am concerned that they may seek a judgement against me.
In most cases, an LLC's assets will not be accessed to satisfy the personal liabilities of an LLC's members when those liabilities are completely unrelated to the LLC. However, you should definitely consult with an attorney because a court could "pierce the LLC veil," meaning make the LLC's assets available to creditors under certain circumstances. For example, this might happen if the LLC was formed to evade a duty and the LLC form should be disregarded in order to prevent loss to an innocent party. You will get the best advice if you talk directly with an attorney about the specifics of your situation. Many do free consultations, so I would take advantage of that.
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An LLC is already supposed to shield itself from personal creditors. However, there are certain instances where the LLC veil may be "pierced," and its assets subject to your personal creditors. Factors include whether you're just using it as your own personal piggy bank, such as co-mingling personal assets with business assets, whether you're observing certain formalities, paying the yearly fees, etc. If you're operating a bona fide business and keeping everything on the up and up, you should be fine. If you do end up getting sued, there's a good chance that your LLC will be joined in the lawsuit because the collections company will be banking on you defaulting, which will be a very easy win for them, and will subject the LLC's assets to the judgment. If you do end up getting sued, make sure you hire an attorney.
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