A Creditor Cannot Foreclose Against Your Member Interest In An Alaska LLC
FACT: ALASKA offers an LLC where the member’s interest cannot be foreclosed. Alaska Sec. 10.50.380 (Rights of Creditors)
FACT: The Alaska LLC serves as a friendly creditor. Sign a promissory note indenting assets to the LLC. Now the LLC has a right to enforce your contribution to the LLC.
FACT: REVENUE RULING 77-137 makes the IRS your friend. The IRS makes your creditor liable for taxes after the creditor obtains a charging order against your interest in the LLC. This is like a “wage attachment” of sorts against your LLC interest. The creditor doesn’t want to pay taxes on a “paycheck” it hasn’t received.
Creditor realizes it can’t foreclose against your interest in the LLC and assets cannot be forced out. He’s forced to wait, and wait, and pay taxes during this time. This encourages him to go back to the negotiation table and work out a settlement, after he’s won the lawsuit, after he obtained the charging order…he wants this to go away.
Asset protection from abusive litigators and from undeserving persons.
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