Can I protect my assets with a LLC?
Date: Tue, 02/17/2009 - 08:53
Submitted by scarecrowwinces
on
Tue, 02/17/2009 - 08:53
Total Replies: 5
I was so used to paying all my bills online that I have them all set up to be paid with the joint checking account that my spouse and I have at Wells Fargo.
My spouse is employed. I am self-employed with an LLC.
I am going to tackle settling the credit cards in my name first and then work on the spouse's.
My question is, I've read several posts here that suggest I should close my checking and open a new one, or perhaps more than one. Now I thought that original creditors or collection agencies couldn't go after my checking account unless it gets to the court stage, but I still read posts here cautioning people to change banks. We have decided that each of us will open separate accounts and not have a joint checking while we see how this debt settlement process goes.
So - my question is - can I move funds into my business LLC and have them be protected from seizure?
my understanding is that a LLC just limits your liability to you
my understanding is that a LLC just limits your liability to your share of the company, if the company gets sue. If you are the sole owner then once the CA gets an order of seizure the money in all accounts that you have control over.
In its simplest form, NO, the OC/CA's cannot go into the company
In its simplest form, NO, the OC/CA's cannot go into the company bank account without a court order. If they somehow got ahold of the routing/account #'s and debited the account, you would dispute it and legally your bank would have to reverse the charges.
Now, if the get a judgment, it may be different.... The CA could not go right into the company bank account with their judgment (because it is against you, not the company). BUT they may be able to "attach" your share of the company to the judgment, which would then give them control over the company assets. For that to be true, though, would mean they would essentially take over the company. So I can't believe it would be that easy for them to actually accomplish. That is a legal question I am not sure about.
Now, as to actually commingling your personal funds in the company bank account, that would be more of an IRS question. Because it is an LLC, the business assets really are supposed to be completely separate from your personal assets. It might be hard to explain to the IRS why there are funds in the company bank account that are not accounted for on the company balance sheet.
What you might do is to personally "loan" those funds to the company or record it as paid-in capital. That way the funds will be accounted for on the balance sheet as ultimately being owed back to you.
Hi scarecrowwinces, The advice to close your account is if yo
Hi scarecrowwinces,
The advice to close your account is if you have payday loans, or you have loan or credit card accounts with the same bank you bank at.
Shifting your funds over like may cause the IRS to audit you.
The LLC will protect your personal assets from attachment if your business goes under. The only thing I can think of off hand is to grant yourself a large pay cut due to "corporate cutbacks". I do not know how attachment/garnishment would work if you're an independent contractor and not a wage earner.
chrys
No payday loans
I don't have any payday loans, and I don't have any credit cards with the bank where my checking account is.
So maybe I am OK leaving everything as is.
LLC Asset Protection
I got some pretty good information from a book wealth and asset protection strategies. The author is Steven Sears attorney in irvine. The book has a companion CD and DVD and I believe some of it is on youtube.