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LLC Asset Protection in Personal Bankruptcy

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1 LLC Asset Protection in Personal Bankruptcy on Sat Mar 28, 2009 4:35 am


Arresto Menor

Here is a hypothetical case:

John Doe has a lot of personal debts. He has an LLC company which he is the only member or owner. John's LLC company is sued by Company ABC for some unpaid debt. In the lawsuit, only the LLC is named as the debtor, not John Doe. After John lost the lawsuit against his LLC, he filed chapter 7 personal bankruptcy. In his filing, he lists Company ABC as one of his debtors.

In the bankruptcy ruling, the judge discharges the debt owed to Company ABC. My question is: can Company ABC go after the LLC's asset? Does personal bankruptcy protect LLC assets? Since in the lawsuit, John Doe is never named as the debtor, is it legit to discharge that debt?

Thanks in advance for your insight!

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