I want to file for personal bankruptcy. How will this affect my membership in an LLC?
March 16, 2010 
2 Comments
grandpa asked:
I want to file a personal bankruptcy (chapter 13) due to personal debts. I also happen to be a managing member of an LLC. The LLC is doing ok, and is not involved in the bankruptcy. There is nothing in our LLC operating agreement as to what happens if a member files bankruptcy. Given that, can I still continue to be a member of the LLC after filing for bankruptcy? Also, how do I determine the value of the LLC as an asset in my bankruptcy filings?
I want to file a personal bankruptcy (chapter 13) due to personal debts. I also happen to be a managing member of an LLC. The LLC is doing ok, and is not involved in the bankruptcy. There is nothing in our LLC operating agreement as to what happens if a member files bankruptcy. Given that, can I still continue to be a member of the LLC after filing for bankruptcy? Also, how do I determine the value of the LLC as an asset in my bankruptcy filings?
I don’t have the answers to that question, you should check with your tax preparer.
I would recommend ammending your operating agreement to specifically deal with a member bankruptcy. Obviously do this before you file. What state is your LLC in?