QUESTION
I am a single member LLC in the state of Missouri. Are the accounts receivable of the LLC taken into consideration if I personally file bankruptcy?
Asked on Jun 12th, 2012 on Bankruptcy - Missouri
More details to this question:
I am filing for BK (ch7) to rid myself of some rental properties.
I have a very small amount of unsecured debt $3k - but based on income and expenses, and the "means test", I do qualify for chapter 7.
I am the 100% owner of an LLC in missouri. I am concerned that my LLC (which has accounts receivables and some money in the bank) is going to come under fire for my personal bankruptucy. I dont want my employees to be effected.
Can a Trustee rule that the LLC is "me" (since I am 100% owner) and therefore come after the money due the LLC and the money in the LLC''s bank account - or is the LLC protected from my personal debts?
Also, the LLC is a service business - we own virtually no assets. we do not own equipment (besides some computers), we dont own the building, we dont have patents or trademarks. 100% internet marketing business.
Hypothetically, if we bill out approx $30,000/month, but our expenses (payroll, rent, insurance) are probably $25,000. how far out are AR considered?
1 ANSWER
Bankruptcy Attorney serving Burbank, CA
Partner at
Law Office of Mark J. Markus
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3 Awards
Your interest in the LLC IS an asset of your chapter 7 bankruptcy estate and that interest must be valued. The value of your interest in the business (LLC) is what someone would be willing to pay to purchase your shares of stock. That is probably close to equal to the value of what someone is willing to pay to purchase the business itself, but not necessarily. You should have a business appraisal done to determine the value of the business, and then discount as appropriate to determine the value of your shares (or membership) in the LLC. Accounts receivables ARE an asset of the LLC and, thus, affect its value accordingly.
Mark J. Markus, Attorney at LawCertified Bankruptcy Law Specialist--State Bar of CaliforniaHandling exclusively bankruptcy law cases in California since 1991.http://www.bklaw.com/bankruptcy blog: http://www.bklaw.com/bankruptcy-blog/Follow Me on Twitter: @bklawr
Answered on Jun 13th, 2012 at 1:23 AM