I have a single-owner LLC.
4-6 months ago, while the LLC was still operating and had revenue, I gave out several (around 3-4 in total) small loans (in the order of $10-20K each) to friends/family here and overseas for all kinds of investments. None of the investments are in my name nor am I an owner in any of them. They were just that, loans to be paid back.
The LLC has been operating at net-loss for 3 years and taxes have been filed via a Schedule C/E on personal taxes which reported this. Most operations defecits were being funded by the 2-3 business credit cards in the name of the LLC
Recently, the LLC had to cease operations due to confirmed upcoming changes in the regulatory environment, increased competition and change in consumer trends.
The credit cards have now got $80,000 in credit card debt, but I have no income, or assets of any nature. The thought of filing for bankruptcy protection, either personal or for the LLC has been floated around with the hope to discharge these debts
The LLC can't get a discharge in a dissolution so there is no reason to file the LLC. Disband it. If you were to file a bankruptcy it more likely than not that you would have to list those loans as assets of the LLC...your shares would be part of the bankruptcy however, if the LLC is terminated you may not have to list those loans unless they were to be repaid to you directly. Interesting issue.
Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.
As the sole owner of an LLC, your best option would probably be to file for relief under chapter 7 as an individual and list all of the LLC's debt whether you think you guaranteed the debt or not. At that point, the chapter 7 trustee would have the right to attempt to collect the $50,000.00 as a fraudulent transfer. However, the trustee will have to determine if there is a reasonable chance to recover the money since the money is no overseas. The attorney would also have to look at whether the transfer of $50,000.00 so recently to your brother overseas is an act that could cause you to be denied a discharge under § 727 of the bankruptcy code.
The only way you can get answers to all the question you raised and to look at any other issues that might arise is to meet with an experienced bankruptcy attorney that handles business and consumer bankruptcy cases. There are many issues that arise in business cases that do not arise in consumer cases, thus picking an attorney with that experience is important. You can use the Avvo "Find a Lawyer" link at the top of this page to start your search.
Answers and comments provided are for general discussion only. My comments are not to be considered legal advice and they do not create an attorney-client relationship.
I believe this is the same question as asked previously but in more detailed form.
That said, the LLC has no need to file bankruptcy. You do not need to file bankruptcy unless you personally guaranteed the credit cards or the credit cards were in your name AND you otherwise qualify to file.
Answers are provided for direction only; it is not a substitute for an office consultation.
Meet with a local bankruptcy lawyer face to face regarding your personal bankruptcy and non-bankruptcy options. As my colleagues have said the LLC itself is unable to obtain a discharge.
This answer is provided for information purposes only. It should not be relied upon as legal advice which can only be offered to clients in an office consultation setting when all the facts and circumstances can be fully considered and reviewed.
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline