Bankruptcy Law/LLC BK

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Expert: - 9/30/2010


Question
Myself , Brtoher , and ste mom own an LLC. We all own equal shares33.33 % The LLc currently owes over $300k debt. One of the notes is personally guaranteed by myslef and brother $120k. We want to file BK Chpt 7 personally and on LLC. My brother is the designated manager for the LLC. were both in accordance with the BK, my step mom is not. She has a special interest in that her boyfriend is the lender for the $130k. Can we still proceed with theBk on the LLC ?

Answer
That is governed by the laws of whatever State applies to the LLC and what the corporate bylaws provide.  This is not a bankruptcy question.  If the LLC authorizes the bankruptcy to be filed, and that authorization is valid under applicable state law, then it can commence a bankruptcy case.   However, an LLC must have an attorney represent it; it cannot file bankruptcy by "itself".  

I'd also spend a lot of time considering what benefits you expect to get from filing a Chapter 7 for the LLC since corporations do not receive a discharge of debts in Chapter 7.

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Mark J. Markus- California Bankruptcy Attorney

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Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

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Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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