As a result, the debtor’s personal residence is not the debtor’s asset, In the Chapter 7 case, this asset has no bankruptcy protection. The LLC owns the personal residence. As a matter of fact, the debtor pays rent to the LLC.
How are Personal Assets Treated in a Corporate Bankruptcy?
Let’s see what happened to this Debtor:
- Transfers his home between his LLC and himself many times over the past 14 years.
- Has several refinances.
- Holds residence as an LLC at the time of filing
- Wants to exempt his residence as being his personal asset.
- Has residential lease as month-to-month
Debtor does not want the Bankruptcy Court to Pierce the Corporate Veil. He requests that his residence be considered a personal bankruptcy asset. In this way, he could exempt the equity in his home.
However, the Court found that the residence which the Debtor rents cannot be exempted in bankruptcy.
No bankruptcy protection – this could happen to you. Bankruptcy Protection | NJ Bankruptcy Law Firm
As a result, the Trustee takes the home. The month-to-month lease is not renewed. There is no bankruptcy protection. The Debtor loses his residence.
You cannot ask the Court to pierce your corporate veil. You cannot move assets between personal and corporate at will.
Hire an experienced bankruptcy lawyer who specializes in bankruptcy law. I explain to clients both the benefits and risks before they decide to file bankruptcy. You must be given expert bankruptcy related to personal asset treatment in corporate bankruptcy.
During my initial free bankruptcy consultation, I conduct a thorough review of the goals of my clients. Many come to me wanting to file a Chapter 7. I meet with them and go over their particular situations, I may recommend Chapter 11 instead.
Don’t let the piercing of your corporate veil happen.
Call me to set up a free consultation. I am here to protect client’s personal and business assets for their financial futures.
Ralph A. Ferro, Jr., Esq. (201) 446-5904 Board Certified Bankruptcy Lawyer
