Will I loose the real estate that I own a Chapter 7, if title is held through an LLC?

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Will I loose the real estate that I own a Chapter 7, if title is held through an LLC?

I own 5 lots (only 2 or currently buildable), free and clear. I own them in my LLC solely without a partner. They were originally in title under my name several years ago. I heard if one puts real estate in a family partnership, perhaps my properties would be protected during a Chapter 7. Is that true? If so how long would I have to wait to file bankruptcy after placing the LLC owned lots into a family partnership? If I can’t what happens to my lots?

Asked on January 6, 2011 under Bankruptcy Law, Arizona

Answers:

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

I don't know what a "family partnership" is, but I don't see how it could possibly provide more protection than an LLC.   Your interest in the LLC is an asset of your bankruptcy case, so if the value of your interest in the LLC is more than you can exempt under applicable law (to see more about exemption laws, visit http://www.bklaw.com/exemptions.html) then you could lose the properties.

If you transfer assets from the LLC to another entity without any consideration, that could be considered a fraudulent transfer.  The time period on that varies depending on the laws of your state, so you would need to consult with an attorney in your area on that.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

I don't know what a "family partnership" is, but I don't see how it could possibly provide more protection than an LLC.   Your interest in the LLC is an asset of your bankruptcy case, so if the value of your interest in the LLC is more than you can exempt under applicable law (to see more about exemption laws, visit http://www.bklaw.com/exemptions.html) then you could lose the properties.

If you transfer assets from the LLC to another entity without any consideration, that could be considered a fraudulent transfer.  The time period on that varies depending on the laws of your state, so you would need to consult with an attorney in your area on that.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/


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