Announcement

Collapse

Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as BKForum.com and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do:
BKFORUM.com (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto BKForum.com you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.


Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of BKforum.com.

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on BKForum.com are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Expenses under LLC

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Expenses under LLC

    I self employed and operate under LLC (one owner) and I’m thinking to file chapter 7.

    1. Is Trustee check expenses on my LLC?

    2. Is Trustee check LLC’s Assets?

    Thank you for comments

  • #2
    1. Yes
    2. Yes
    Filed CH 7 9/30/2008
    Discharged Jan 5, 2009! Closed Jan 18, 2009

    I am not an attorney. None of my advice is legal advice in any way..

    Comment


    • #3
      For BK purposes, there is no difference between you and your LLC. The trustee steps into your shoes as owner of the LLC. Thus, if the LLC has any assets, outstanding receivables, etc, they are at risk in your BK.

      Comment


      • #4
        Thank you,
        It is no asset on LLC. Main question is that some of transaction on business account was made for personal use (low balance on personal account and no time to transfer between accounts), but this transaction was not included in tax return.
        Are any problems with this?

        Comment


        • #5
          The LLC is use. Now, whether you have issues with the IRS is an entirely different matter if you claimed those "expenses" as business expenses.

          As HHM wrote, the Trustee steps into your shoes as the operator of the LLC (sole member). The Trustee can expect to take the account receivables due at the time of your filing. Remember, A/R is an asset. Assets don't need to be physical. An asset could even be a patent or invention.

          Depending on what your LLC really does, you probably want to get an attorney to file this case for you. Intellectual Property is hard to put a value on, so in many cases, the Trustee will abandon the LLC, but if there are large A/R balances or something tangible that the Trustee can get their hands on... it's game on.
          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog


          I am not an attorney. Any advice provided is not legal advice.

          Comment


          • #6
            It is no Intellectual Property in my business. Only sales commotions and payment for service.

            Comment


            • #7
              Then it will be your A/R balance at the time of filing, that the Trustee could be interested in.
              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog


              I am not an attorney. Any advice provided is not legal advice.

              Comment


              • #8
                When you have a commission only business for your LLC, the Trustee will want to see your contracts that generate the commission. In fact, you most likely will have to provide (at least I had to provide) the tax returns for the LLC for at least 2 yrs as well as your personal returns. In my case the Trustee asked for 4 yrs of tax returns both personal and business. You will need to show your bank statements both personally and for the business. You will need to provide P&L's too.

                I also have a commission only business and had to provide the contracts to the Trustee that generate the accounts receivable. If you have a change during the BK, then you may need to show the change. For example, I had short sale properties under contract at the time of my filing. My attorney stated right in my petition that the closing was unlikely (he used better terminology LOL) and naturally, when the contract was cancelled we supplied the cancelation.

                All contracts in effect at the time of BK filing belong to the bk estate. AFTER the filing date, the income is yours. When you are planning your BK you will want to plan the flow of income, just like the W2 filers. It can be a little more complex, but no one knows your business as well as you do.
                Filed CH 7 9/30/2008
                Discharged Jan 5, 2009! Closed Jan 18, 2009

                I am not an attorney. None of my advice is legal advice in any way..

                Comment


                • #9
                  Originally posted by StartingOver08 View Post
                  When you have a commission only business for your LLC, the Trustee will want to see your contracts that generate the commission. In fact, you most likely will have to provide (at least I had to provide) the tax returns for the LLC for at least 2 yrs as well as your personal returns. In my case the Trustee asked for 4 yrs of tax returns both personal and business. You will need to show your bank statements both personally and for the business. You will need to provide P&L's too.

                  I also have a commission only business and had to provide the contracts to the Trustee that generate the accounts receivable. If you have a change during the BK, then you may need to show the change. For example, I had short sale properties under contract at the time of my filing. My attorney stated right in my petition that the closing was unlikely (he used better terminology LOL) and naturally, when the contract was cancelled we supplied the cancelation.

                  All contracts in effect at the time of BK filing belong to the bk estate. AFTER the filing date, the income is yours. When you are planning your BK you will want to plan the flow of income, just like the W2 filers. It can be a little more complex, but no one knows your business as well as you do.
                  So StartOver, how did all the gnashing of TT teeth turn out relative to the LLC's?
                  Did TT raid the properties, commissions, etc?
                  When you refer to contracts, were they pending real estate contracts, leases?
                  Did you end up with any of the LLC properties when it was all said and done?

                  Comment


                  • #10
                    Short answer: everything turned out fine, No Asset personal BK 7/Discharged. The contracts were pending sales. I had sold my personal rentals except for one prior to filing. I surrendered my own residence and the remaining rental in my BK. The Trustee had 2000 documents to review, and my 341 was continued one time. But everything was exactly as stated on the petition and I was successfully discharged of $1M in debt.

                    Long answer: I am a real estate agent. By the time I filed my BK, I had only two pending contracts that I was certain would not close (because of the issues involved and this was in Sept 2008). I also knew that I would have to close my S corp (which was a PA, similar in structure to an LLC but geared to service businesses like accountants/brokers/attorney's etc). I knew I needed to close the PA because the debt owed by the corp is still due if you have filed a personal BK. Only my personal liability was discharged. If I had continued to use the corporation, then any proceeds earned after my BK filing deposited into the corp account could be siezed by the corp creditors. I therefore closed that corporation. I will open another corp but in the meantime operate as a sole propriator so I have no issues with corp creditors. I personally did not want to retain any property because here in S Fl we are so upside down. BTW, I am glad. It is much easier to start over with nothing on the debt side then to carry over debt that might take yrs from which to recover.
                    Filed CH 7 9/30/2008
                    Discharged Jan 5, 2009! Closed Jan 18, 2009

                    I am not an attorney. None of my advice is legal advice in any way..

                    Comment


                    • #11
                      StOv08: Did TT take the property in the LLC or did it just foreclose by the lender?

                      Got one coming up where there are 4 separate entities, so it will be interesting> NOT

                      Comment


                      • #12
                        Startingover08 - Question

                        Startingover08,I know this is going off topic, but since you have a Corp Entity for a single owner I have a question.

                        What benefits do you get from have the corp entity rather than just being a schedule C filer? My wife is about to sign a consulting contract. She will be a "1099 empolyee". Basically working for herself. It will be 100% commission. Other than the "corporate veil" to protect from certain lawsuits, I can't think of a reason to create a corporation (LLC, S-corp, etc).

                        Any advice is appreciated.
                        Wife Laid off - 11/16/2009 Missed First Payments - 12/5/2009
                        Filed Chap 7 - 12/31/2009
                        341 - 2/12/2010
                        Discharged - 4/19/2010

                        Comment


                        • #13
                          Originally posted by BCA2009 View Post
                          Startingover08,I know this is going off topic, but since you have a Corp Entity for a single owner I have a question.

                          What benefits do you get from have the corp entity rather than just being a schedule C filer? My wife is about to sign a consulting contract. She will be a "1099 empolyee". Basically working for herself. It will be 100% commission. Other than the "corporate veil" to protect from certain lawsuits, I can't think of a reason to create a corporation (LLC, S-corp, etc).

                          Any advice is appreciated.
                          BCA: I'm not StOv but I can answer your question. Yes, the corp vail is there, although that may be over-hyped at times for a small company because if something goes wrong usually the owner's finger prints are on the act that went wrong so there can easily be a suit involving the owner personally. Seen it too many times.

                          However, I am a big believer in the use of S-Corp or LLC. There are tax advantages with the use of the S-Corp. Self employment taxes can usually be eliminated on a large portion of income that may save 5-8K per yr alone. The other main advantage of using an entity is the elimination of the filing of a Schd C. They are death when it comes to an audit; much higher ratio of tax audits involving Schd C's, if you have biz expenses that you write off, than small Corps. All too many self employed indiv's write off lots of their income and that is an immediate attention getter for Schd C filers. Just my opinion.

                          Comment


                          • #14
                            I agree that changing the structure of a business to S-Corp or LLC can have benefits. I had an S-Corp.
                            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                            Status: (Auto) Discharged and Closed! 5/10
                            Visit My BKForum Blog: justbroke's Blog


                            I am not an attorney. Any advice provided is not legal advice.

                            Comment

                            Unconfigured Ad Widget

                            Collapse
                            Working...
                            X