Owning Investment Real Estate in a Limited Liability Company (LLC)

Several clients have asked about owning investment Real Estate (usually a rental property) in a Limited Liability Company (“LLC”).  Usually, the main reason for clients are interested in placing property in a LLC is to provide additional liability to the owner.  To understand how this additional protection is provided, assume that you have purchased a residential property that you intend to rent out to tenants.  There are always risks associated with being a landlord, one of the worst being that a tenant loses their life while living at the property. (Look at the number of children that drown in swimming pools in the Phoenix area each year, some in residential rentals.)  Or what if someone breaks into the property injuring your tenants, and you are sued for failing to have provided adequate locks on the front doors or windows.   If you have insurance, (usually a Landlord’s policy on the rental and your own Homeowner’s policy), your insurance should cover most of the costs associated with defending such a claim and paying any damages.  However, there always is the chance that your policy may be insufficient to cover a large claim, particularly if a sympathetic jury were to award a claimant millions of dollars in damages.

Should I Max out my Credit Cards before Filing Bankruptcy?

We have heard of attorneys encouraging people to max out their credit cards before filing bankruptcy.  Our attorneys strongly disagree with this advice for several reasons.  First it is dishonest.  Some people would say that  filing bankruptcy is dishonest in itself, so why not get as much out of it as you can.  Filing bankruptcy is not dishonest.  Our attorneys help clients who have come to the realization that paying all of their creditors is either not possible, or puts such a burden on them and their family that it is necessary to file bankruptcy to obtain peace in their home.  This action is not dishonest, it is honestly evaluating options to get out of a bad situation, and bankruptcy is one of those options.

What is dishonest is making a promise to repay money when you do not intend to repay it.  We advise clients to first decide which option they think is best to get out of their current debt situation.  If they plan to file bankruptcy, then they need to stop borrowing money, unless there is a plan and an intention to repay the debt even after bankruptcy.  One example is borrowing money to buy a car, when you intend to keep the car and pay the debt after a bankruptcy.  When someone borrows money with a promise to pay it back, but at the time they borrow it they have no intention of paying it back, this action is fraud.  Our attorneys do not advise our clients to commit fraud, or assist them in doing so.

Credit Card Debt Collection upon the Death of a Loved One

Some people have a “zero balance” on their credit cards.  Many people, on the other hand, carry at least some debt on their credit cards and pay the monthly charges which may exist at the end of each monthly cycle.  Whether you are a person in the former category or a person in the latter category, everyone should know what happens to existing credit card debt when someone passes away as credit card companies may attempt to collect on the debt of a loved one who has recently passed away.

Generally, credit card debt does not go away when a person dies.  Family members, however, are most often not directly responsible for paying an outstanding balance that may exist.  Instead, the remaining debt is paid out of the decedent’s estate.  Depending on the amount of outstanding debt, it may be helpful to consider how credit card debt will be handled when creating an estate plan.

Steps to Forming a Business

Before starting a business, there are several necessary steps to take in order to make sure the business is legal and complies with local, state, and federal statutes, regulations, and taxes. The attorneys at The Carroll Law Firm PLC have put together the following checklist to assist clients in starting their business.

PLANNING STAGES

• Create a Business Plan
  A business plan should include business goals, an executive summary, business description, projected costs, profits, and losses, business environment analysis, industry background, competitor analysis, market analysis, marketing plan, operations plan, management summary, and financial plan. Be realistic with your plan, most businesses don’t turn a profit until the end of the first year due to start-up costs and the fact that a clientele list takes a while to build.

Short Sale Consultations

Recently, due to the number of homes underwater in our community, our firm has experienced an influx of clients seeking advice regarding Short Sales. We now offer in office, hour Short Sale Consultations one-on-one with our attorneys for $250.00, which can potentially save our clients thousands or hundreds of thousands of dollars. We also offer 30-minute Short Sale Consultations by telephone for only $100.00 (credit card required).

Call us now at (623)551-9366 to set up your consultation!