Child support is a noncustodial parent’s legal obligation to support their child financially. Sometimes, that parent has assets, such as a limited liability company (LLC). This leads to the question: Can child support enforcement agencies go after someone’s LLC to collect unpaid child support?
In Georgia, child support enforcement agencies can potentially go after someone’s LLC to collect unpaid child support. Under Georgia law, child support enforcement agencies can use several methods to collect unpaid child support, such as wage garnishment, interception of tax refunds, and seizure of bank accounts. Additionally, they may seek to place liens on property or other assets, including an LLC, to satisfy child support obligations.
It’s important to note that each case’s circumstances and details can affect the enforcement methods used. If you have questions or concerns about child support enforcement in Georgia, call the family law attorneys at Hobson & Hobson, P.C., or contact the Georgia Division of Child Support Services for more specific information and guidance.
Personal Liability vs. LLC Liability
In general, the limited liability company (LLC) structure provides a separation between personal assets and the assets of the LLC. This separation is one of the primary advantages of forming an LLC. It means that the owners, known as members, are not typically personally responsible for the debts and liabilities of the LLC.
When an individual operates a business as an LLC, their personal assets, such as their personal bank accounts, real estate, and other investments, are legally distinct from the assets of the LLC. This separation is commonly referred to as the “corporate veil,” which protects the personal assets of the LLC’s owners from being used to satisfy the debts and obligations of the business.
This limited liability protection is one of the key reasons why many individuals choose to structure their businesses as LLCs. It shields their personal assets from the risks associated with business operations and mitigates the potential impact of business-related liabilities.
Child Support Obligations Are Unique
Child support obligations present a unique situation where personal liability can extend to the LLC and its assets. While LLCs generally protect personal debts, including business-related liabilities, child support obligations often fall under a different category of legal responsibility.
Courts and child support enforcement agencies recognize the importance of ensuring financial support for children. As a result, they have the authority to pursue child support payments through various means, including the potential for accessing the assets of an LLC owned by a noncustodial parent.
In Georgia, when a noncustodial parent who owns an LLC fails to meet their child support obligations, the court may have the power to pierce the corporate veil. Piercing the corporate veil means the court can disregard the limited liability protection the LLC provides and hold the owner personally liable for the child support debt.
The decision to pierce the corporate veil and hold the owner personally liable typically depends on several factors, such as:
- Control and Use of LLC Assets: If the court determines that the noncustodial parent has significant control over the LLC’s finances and uses the LLC to evade child support obligations, they may be more inclined to pierce the corporate veil.
- Commingling of Personal and Business Finances: If the noncustodial parent has mixed their personal and business finances to such an extent that it becomes difficult to distinguish between personal assets and LLC assets, the court may view this as a basis for piercing the corporate veil.
- Fraud or Unfairness: If the noncustodial parent has engaged in fraudulent activities, such as intentionally transferring assets to the LLC to avoid child support obligations, or if allowing the limited liability protection would result in an unfair outcome for the child, the court may pierce the corporate veil.
It is important to note that the specific laws and regulations regarding child support and LLC liability can vary by jurisdiction. Therefore, it is essential to consult with our Atlanta child support attorneys. We understand the relevant regulations in Atlanta and how child support obligations may affect an LLC and its assets.
Contact Our Atlanta Child Support Lawyers
At Hobson & Hobson, P.C., our Atlanta divorce lawyers can help you understand how child support might affect your LLC. We can also help you explore your legal options for collecting unpaid child support if your ex owns an LLC. Our divorce attorneys are here to help you through this difficult time and will be strong legal advocates through all family law matters.
Call us today at (770) 284-6153 or fill out our confidential contact form. We can set up a consultation so that you can review all your legal options.
Attorney Sarah Hobson at Hobson and Hobson, P.C. are powerful advocates for those who fight for better futures for those going through divorce and custody law matters.