Have a question for anyone who has filed with a single member llc and was able to keep it after BK7

[Anonymous]

Hi Everyone,

I have a question for those of you that have had a single member llc and was able to keep it and how much it cost you. Here is the back story, I met with my attorney yesterday, paid the retainer and turned in all my paper work, was only missing a few items but had those on me, he then tells me that my BK might cost more because I have 2 LLC's, but in my first meeting I was very forward about what i had, I have a rideshare LLC for uber, lyft, grubhub and doordash, my main income. Then i have another LLC for a ebay business and i was very clear about all of this.

Well at the end he says the few will stay the same but i have a very complicated filing for personal BK7 and more fee's may come up. The ebay business I do not care about and was planning on closing it at the end of the year but the rideshare i need to keep. My understanding is once I file, in about 2 weeks, then both of my LL'C's before property of the trustee and that I might need to fight to keep them.

Has anyone gone through this and at what additional cost did it end up to. He is telling me that most likely the trustee will not keep the LLC's and just relieving there share in it, or he says i might have to buy them back or even file a motion to keep them, all at a cost. If anyone has gone through this and was able to keep your llc's any insight would be great. There are no assets in the rideshare llc and minimal in the ebay one. Thank you in advance for any insight on this. He was throwing out numbers like $500 for the notice to fight there ownership, buying back my llc's for 1k etc.

[FireMedic1]

"Small business owners have the option of filing Chapter 7 on behalf of their business or for themselves personally. If, however, you’re a sole proprietor, both your business debt and your personal debt will be resolved in the same Chapter 7 bankruptcy case."

https://www.nolo.com/legal-encyclopedia/chapter-7-chapter-13-bankruptcy-small-business-owners.html 

[Anonymous]

I had a single member LLC which also had debt so I decided to file personally and business BK and close the LLC. I still needed a income so I started a new business as a sole prop for now until I can start a new corporation.

Does you LLC’s have debt or is it just personal debt. If your LLC is set up properly then it is a separate entity since you’re not a sole proprietor. In that case you can keep your LLC open, keep doing business and file only personal BK.

If that’s not your situation then you’d have to provide some more information.

[despritfreya]

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@AnonymousIf your LLC is set up properly then it is a separate entity since you’re not a sole proprietor. In that case you can keep your LLC open, keep doing business and file only personal BK.

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Potentially very dangerous advice.  Continuing to operate the entity while in a Chapter 7, absent an allowed exemption and before the Trustee abandon's HIS/HER ownership of the entity depends upon things such as. . .

State law,

Bankruptcy case law in your district,

The particular Trustee that is assigned to the case,

The "assets" of the entity both pre AND post petition,

The debt of the entity both pre AND post petition,

And many other factors.

While one can state how things were handled in their particular case, one should not give OP advice to continue to operate.  That advice should only come from a well qualified attny.

Case in point. . . Just finished damage control for a client whose prior attny did not tell the debtor NOT to operate the LLC.  Cost to settle with the trustee after the trustee waited two years. . .  a nice round figure of $100,000.00.  Malpractice claim against the prior attny. . . yup.  Did the prior attny have insurance. . . nope. 

Des.

[Anonymous]

You’re right. I should of said that I’m not a lawyer and he should consult his attorney for the answer. I was stating something from my case which may be in a different state with different laws and if I even fully understood what my lawyer told me if a different story. Thanks for chiming in, I won’t be accidentally giving anymore potential legal advice.

[Anonymous]

Hi,

So first off I want to say that I am sorry if I implied i was looking for advice, I was not, just experience others may have gone through similar to mine. After a lot of research, for my state of KS and talking with my attorney, this is the info i received on this matter.

The rideshare LLC is considered a service business meaning that it requires a person to provide a service to get paid, ex uber, lyft, grubhub and doordash, there are no assets and the car will be exempt. There is a 98% chance the trustee will abandon it. They could take this and force me to close it or buy it back, but since it is a service llc most likely outcome is it will be abandoned.

The Ebay business is another matter as it has assets, about 4k atm at cost, but these assets are over 6 months old as i have not purchased any new inventory in that time. There is inventory, boxes, shelves etc all not worth more than 4k. Now i have tried to sell off the inventory for some time now, about 2 months, but no hits and I went  down to as low as .25 cents on the dollar and still no bites. The trustee can do if 3 things with this llc, for the last 6 months it has lost money so they can chose to liquidate it, abandoned it or offer to have me buy it back.

This LLC I have no interest in it any more, so they can either take it or leave it as i was planning on closing it at the end of the year.

So again I thank everyone in the forums for there opinions and taking the time to answer. Again this is for the state of KS, this is only for information pertaining to this state.

[FireMedic1]

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@Anonymous wrote:

Hi,

So first off I want to say that I am sorry if I implied i was looking for advice, I was not, just experience others may have gone through similar to mine. After a lot of research, for my state of KS and talking with my attorney, this is the info i received on this matter.

The rideshare LLC is considered a service business meaning that it requires a person to provide a service to get paid, ex uber, lyft, grubhub and doordash, there are no assets and the car will be exempt. There is a 98% chance the trustee will abandon it. They could take this and force me to close it or buy it back, but since it is a service llc most likely outcome is it will be abandoned.

The Ebay business is another matter as it has assets, about 4k atm at cost, but these assets are over 6 months old as i have not purchased any new inventory in that time. There is inventory, boxes, shelves etc all not worth more than 4k. Now i have tried to sell off the inventory for some time now, about 2 months, but no hits and I went  down to as low as .25 cents on the dollar and still no bites. The trustee can do if 3 things with this llc, for the last 6 months it has lost money so they can chose to liquidate it, abandoned it or offer to have me buy it back.

This LLC I have no interest in it any more, so they can either take it or leave it as i was planning on closing it at the end of the year.

So again I thank everyone in the forums for there opinions and taking the time to answer. Again this is for the state of KS, this is only for information pertaining to this state.

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Your first sentence was:" I have a question for those of you that have had a single member llc and was able to keep it and how much it cost you."  If you ask a question on the forums. You get advise. Thats how it work in these parts. Sorry we all looked at it the wrong way. Good Luck!

[despritfreya]

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@Anonymous wrote:
The rideshare LLC is considered a service business. . .  there are no assets and the car will be exempt. There is a 98% chance the trustee will abandon it. They could take this and force me to close it or buy it back, but since it is a service llc most likely outcome is it will be abandoned.

The Ebay business. . .  has assets. . .  The trustee can do. . .  3 things with this llc. . . [he] can chose to liquidate it, abandoned it or offer to have me buy it back. This LLC I have no interest in it any more, so they can either take it or leave it . . . 

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The above is correct therefore it is clear you have hired an attny who understands how this works.  Just understand that until there is an abandonment, you will be working for the Trustee even if the rideshare business is a service business.  You and your attny will want to address the abandonment as quickly as possible so that you do not get caught in the middle of a problem.

Des.

[Anonymous]

Hi,

Yes you are correct, I would be working for the trustee, my attorney has suggested that we file some motion to have the rideshare llc be protected at a cost of course. The other option I have is to close the LLC, but that means I would have to change a lot of paper work and not sure if i even can till tax time when the forms are updated. Its my only real souce of income atm so whatever I need to do to protect it I will.

Next week I will be signing the paperwork and she will let me know what I have to do to move on. Thank you all once again, and yes I did word my title wrong.

[FireMedic1]

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@Anonymous wrote:

Hi,

Yes you are correct, I would be working for the trustee, my attorney has suggested that we file some motion to have the rideshare llc be protected at a cost of course. The other option I have is to close the LLC, but that means I would have to change a lot of paper work and not sure if i even can till tax time when the forms are updated. Its my only real souce of income atm so whatever I need to do to protect it I will.

Next week I will be signing the paperwork and she will let me know what I have to do to move on. Thank you all once again, and yes I did word my title wrong.

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No problem. Good Luck!