Garnishment
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Garnishment
Can a personal bank account be frozen or garnished
for a llc business debt
Asked on October 10, 2017 under Business Law, Louisiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
No, your personal account may not be garnished or frozen for an LLC dept--that is whole point of "limited liability company," after all: to protect personal assets from LLC debts or obligations--except for the following three exceptions:
1) You personally guaranteed the LLC debt, which means you contractually gave the creditor the right to go after your personal assets for this debt.
2) Related to the above, the debt is to your bank (e.g. for a bank-issued credit card) and in the paperwork opening the account(s), you signed something authorizing them to take money owed the bank due to your LLC from your personal account.
3) The creditor sued you personally on the grounds your LLC was a sham or fraud (not a legitimate, run-independently-for-its-own-benefit business) used to defraud creditors and successfully got a court order or judgment against you "piercing the corporate veil" (the term "corporate" is used in this context for LLCs, too) allowing them to disregard the LLC's protection and go after you personally.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.