Is there an automatic stay to stop a foreclosure of a business loan of an LLC that is personally guaranteed by the single member

Asked about 5 years ago - Houston, TX

A mortgage on a commercial property is secured by a deed of trust. The lender is going to foreclose on the loan for nonpayment.

The loan and the property titile is in the name of a single member LLC. The loan was personally guaranteed by the single owner.

Will a Chapter 13 bannkruptcy in the name of the owner act to stay the foreclosure on the property?

Attorney answers (1)

  1. D. Alexander Martin

    Contributor Level 9

    1

    Lawyer agrees

    Answered . Generally speaking, the stay applies to only property of the debtor. In this case, the property belonging to the debtor is the debtor's interest in the membership units. Since the LLC is a single member LLC, a foreclosure does strike me as an "act to exercise control over the property of the estate," especially if the membership units have value over and above the amount owed to the lender who wants to foreclose. If this is the case, you, your lawyer or the trustee might want to consider filing a motion with the court to determine the applicability of the stay to the lender.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

29,330 answers this week

3,134 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

29,330 answers this week

3,134 attorneys answering