QUESTION
Can personal creditors garnish business accounts of an LLC?
Asked on Apr 25th, 2011 on Bankruptcy - California
More details to this question:
My girlfriend is busy so I'm doing research. She's had her business account for her LLC garnished as a result of a judgement on behalf of a personal credit card debt. Is this legal, and are there any methods to protect herself? She needs debt modification not bankruptcy.
3 ANSWERS
Trusts & Estates Attorney serving Camarillo, CA
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Law Offices of Larry Webb
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She probably used her SSN for the checking account. Hard to prove its not her money.
Answered on Apr 29th, 2011 at 12:59 PM
Bankruptcy Attorney serving Atlanta, GA
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Saedi Law Group, LLC
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Depending on your state law, a creditor with a judgment against you might be able to place a lien on your property, freeze your bank accounts, and/or garnish your wages. If the judgment was ONLY against you're an individual then the LLC should not be garnished.
You may want to check the judgment and make sure that her name and the company's name are not both listed. If her LLC account has been frozen she will need to contact her bank to have that account "unfrozen". Many times banks will receive a judgment and simply put the person's name in to the system to freeze all accounts which their name appears.
This would include an LLC if they are a signer on the account.
Answered on Apr 27th, 2011 at 7:02 AM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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A personal obligation will not allow property of the LLC to be levied upon. An objection should be filed in the court where the action is pending.
Answered on Apr 26th, 2011 at 9:39 AM