Legal Question in Bankruptcy in Michigan

Me and My LLC - Bankruptcy Questions

I own an LLC event planning company as the sole proprietor. Last October we held a disaster of an event, causing me to have outstanding debts, which the company cannot pay, and we have since stopped doing business. The company does not have any assets to liquidate (We've already sold off what we can, and paid whom we could.) but of course creditors dont just disappear. One of these are threatening to submit my name (my personal name not my company) to the sherrif's department if I do not pay, even though the invoices clearly list the company as the client, and me as a representative.

It was my understanding that doing business as an LLC protected my personal assets and credit, in the event of legal action be brought upon my company. Is this true? Will I personally be held accountable for the debts the company owns? Since the company was mine, I poured all of my personal assets into it as well, and lost everything myself, so even so, I will not be able to pay depts personally either.

Further, I understand that rates will always vary depending on the situation, but can you tell me how much I might expect to pay for Bankruptcy services? Should I file for bankruptcy?


Asked on 3/11/05, 7:21 pm

1 Answer from Attorneys
Jesse Sweeney Sweeney Law Offices, P.L.L.C.

Re: Me and My LLC - Bankruptcy Questions

Generally, the rule regarding LLCs (and corporations to a greater extent) is so long as the LLC and you did not comingle accounts or assets, or you never assumed personal liability on debts, the debts of the LLC will stay that way. Threats are nothing more than threats, and many people misundertand the law (i.e. your friend who threatened to bring action against you). However, if criminal activity was involved, or fraud, or misrepresentation, or gross negligence, there might be a reason to pierce the LLC and go after you individually. Without more information, I cannot give you a solid answer.

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Answered on 3/11/05, 9:19 pm


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