Legal Question in Bankruptcy in Maryland

Re: LLC bankruptcy

It may not be necessary for the L.L.C. to file a bankruptcy. If the L.L.C. owned/owns no assets, such as equipment, accounts receivable, etc., sometimes it is possible to make a creditor go away by demonstrating the L.L.C. has no assets and it would be fruitless to try to collect. If the L.L.C. has lots of creditors, or if this particular creditor won't go away, a bankruptcy filing might be necessary. Absent any fraud issues, there is no reason why you should be personally liable. Did that creditor sue you individually, as well as suing the L.L.C.? I cannot advise you whether or not you need a lawyer - filing a bankruptcy is more than filling out forms . . . but I can only tell you that if you need one, I am available.

Re: LLC bankruptcy

Carolyn is correct. Usually an entity that protects its owners from liability for the entity's debts doesn't bother with a bankruptcy -- it just fades away. The entity isn't entitled to a discharge under the Bankruptcy Code anyway.

In addition to the debt collection issues, there are tax issues to be considered. Even though the entity seems to have ground to a halt, it needs to file tax returns, and the tax consequences of its business operations (and its ultimate demise) need to be reflected on your tax return.

This is not easy stuff. Please follow Carolyn's suggestion and find qualified creditor rights and tax help.