Legal Question in Business Law in New Jersey

LLC and personal judgement

Regarding personal liability and members of a LLC. If a member of a LLC has

a personal judgement against them, can a financial institution freeze the

bank account of the LLC since the individual member's ss# is on the bank

account of the LLC.

Asked on 8/01/08, 11:58 am

3 Answers from Attorneys

Robert Davies The Davies Law Firm, P.A.
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Re: LLC and personal judgement

This question can not possibly be answered without detailed information.

Please, please go hire an attorney to help you.

I do this kind of work, and I sense that you have some very serious problems here. Call me if you like.

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8/01/08, 12:05 pm
John Corbett Corbett Law Firm LLC
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Re: LLC and personal judgement

The member's SSN should not be on the LLC's bank account for exactly that reason. The IRS provides for the issuance of EINs for single-member LLCs so that the LLC is identified as a separate entity.

However, if you have such a problem now, the issue is what to do about it. A judgment creditor can levy against a debtor's interest in an LLC. So, you may be able to apply to the court to release the levy because it is against a separate entitly, but if the LLC is a single member LLC, the judge may not allow it. Additionally, if the LLC is a multi-member LLC where the interest of the debtor-member can be ascertained, the judge may allow the levy to the extent of that interest.

If the amounts are large, you may need the help of a lawyer. My firm handles matters of this type. If I can be of further help to you, call or email.

See also: http://info.corbettlaw.net/lawguru.htm

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8/01/08, 12:31 pm
Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)
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Re: LLC and personal judgement

Your question has a faulty assumption. If your LLC was set-up properly, it has its own EIN. The Bank account should have the EIN of the LLC not the SS# of the members.

You should see a tax and business attorney immediately.

I hope this helps!

Ron Cappuccio

http://www.taxesq.com

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8/02/08, 10:08 pm

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