If I had a commercial property signed it over to LLC last10 months agowith no compensation, can the property be taken in my bankruptcy?
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If I had a commercial property signed it over to LLC last10 months agowith no compensation, can the property be taken in my bankruptcy?
The person owning the LLC and I were going to do business together and thought it was better sense to have property in an LLC instead of my name. I am now thinking about filing Chapter 7 because of serious family illness and inability to pay mortgages, credit cards, etc. Is it possible for the property will be reversed back into my name and seized, since there was no money exchanged when it was changed over to the LLC? Is there any way to keep that from happening?
Asked on August 26, 2011 Ohio
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 12 years ago | Contributor
That depends on how you structured the transaction. Was the transfer done as a capital contribution to the LLC? If so, you presumably received the value of stock (or membership interest) in return for the property. Your interest in the LLC is an asset of the your Chapter 7 estate and must be valued and would include the commercial property.
If you truly received no value for the transfer, then that is a prima facie fraudulent transfer and yes the Trustee could sue the LLC to recover the value of the property transferred. It could also result in your discharge being denied if the value was high enough so that it could have paid a substantial portion of debts that existed at the time of the transfer.
You need to consult with a bankruptcy attorney in your area.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 12 years ago | Contributor
That depends on how you structured the transaction. Was the transfer done as a capital contribution to the LLC? If so, you presumably received the value of stock (or membership interest) in return for the property. Your interest in the LLC is an asset of the your Chapter 7 estate and must be valued and would include the commercial property.
If you truly received no value for the transfer, then that is a prima facie fraudulent transfer and yes the Trustee could sue the LLC to recover the value of the property transferred. It could also result in your discharge being denied if the value was high enough so that it could have paid a substantial portion of debts that existed at the time of the transfer.
You need to consult with a bankruptcy attorney in your area.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
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