If my LLC goes Bankrupt, Who is responisble for the Credit Card Debt??

Question

Hi,

I just opened an LLC with my buisness partner...it is a web based netowrking website...basically we need about $15,000 to pay the developer and get the site up and running..we will probably have no income from the website, thus no income to the business for at least 6 moneths to 1 year....there will be other monthly costs invovled as well....

Question is if we keep putting everything on the company credit card and, say at the end the end of two years our website doesnt take off, and we have a $25,000 credit card...can we declare the LLC bankrupt and will the debt be whiped away, with no hit to our personal credit??

I will talk to my accountant, but I was curious on to what your thoughts were? Thanks

Answer 1

check and make sure neither one of you personally guaranteed the credit card debt!

Otherwise the debts incurred by the LLC will not be the responsibility of the members.

Answer 2

Most new business credit lenders make you fill out an application stating that you "personally guarantee" the debt.

If the credit card application has your social security number on it, the debt is yours.

If it only has an EIN, then it is the business that takes the hit.

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