Personal Bankruptcy Personal chpt 7 & turn DBA into LLC

[Need2breath]

Oh boy could I use advise! My husband has owned and operated a used car selling business his entire life under a DBA. The business is all he knows and he does it from home. It makes a good amount of money and is certainly worth keeping not to mention our ONLY income (I sell the cars). Our personal debt is just unmanageable right now and we have fallen 3 months behind on our credit cards and a line of credit (nothing business related) Our mortgage is current as is our home utilities and such. This business requires a NYS bond of 10,000 which is coming due again in Feb. We're worried about not being able to secure one, which would force him out of business. But that is another saga. Anyway, we are considering filing a Chpt 7 to eliminate our personal debt, but were told we would have to include the business. We want to continue to operate and keep it. If we form a LLC could we at some point file personal bankruptcy and still own and operate the LLC? My question is, is it possible to separate business from personal I guess? Every bill we want to discharge is personal, nothing is tied into the DBA. Any advise would be GREATLY appreciated. Thanks

 

[dee_dub]

I don't think turning the business into an LLC will, in and of itself, solve your personal bankruptcy problem. Turning it into an LLC might be a smart thing to do because there may be tax advantages and you get the benefit of being shielded from any liability the business might incur. But the business itself will still be owned by you, and will be an asset that your creditors could go after in bankruptcy. I would strongly suggest you consult an accountant or lawyer with bankruptcy expertise.