LLC Bankruptcy - Joint Assets
Philadelphia (PA).
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Posted 4 months ago in Bankruptcy / Chapter 7.
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I will most likely be filing Chapter 7 business bankruptcy. I have a lot of unsecured business debt that I personally guaranteed by myself. What rights under that personal guarantee do the creditors have against my home (jointly owned) and my 401k plans? Also, I am considering selling my home in the next year, can these creditors come back later with judgments on the new home? I guess I am trying NOT to have to file personal bankruptcy.
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Answers (1)
Lesley Abigail Hoenig
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Posted 4 months ago.
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Any debt that you have personally guaranteed, you can be personally liable for. Whether they could pursue your 401k plan depends on your state's exemption. Most states have high or unlimited exemptions for 401k plans. However, if you have a lot of equity in your home, above your homestead exemption, they could easily get judgment liens against you can collect that way. You may want to consider a personal bankruptcy as well, otherwise you will not be free from these business debts. It isn't what you want to hear, but creditors have small businesses personally guarantee debts for this very reason. So that if the business goes under they still have someone to go after. As much as you don't want to file a personal bankruptcy, it might be in your best interest to do so. You should discuss this with the your bankruptcy attorney that you will be hiring for the LLC bankruptcy. That attorney will be in the best position to advise you as to what to do on the personal end.
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