[CLBS] Refinancing loans of debtor's related entity prior to filing personal ch 7?

[Holly Roark]

Individual debtor has an LLC (H &W). No equity in LLC. LLC has 4 loans
(total $400K), 3 are corporate lenders, and 1 is to a family member of over
$100K. Debtors want to refinance/consolidate the biz loans to have better
payment terms. I don't think this is a good idea prior to filing their
personal case. I can't seem to articulate why this is a problem, but the
thought of a family member getting paid $100K from a related entity of the
debtor prior to the debtor filing BK seems like it may raise some issues.
What am I missing here? 

 

Best regards,

HOLLY ROARK

Attorney at Law 

Certified Bankruptcy Specialist -

By the State Bar of California Board of Legal Specialization

 

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