Its from a bankruptcy auction. 

After all, the bank may demand to instantly cover the entire loan - and if you do not do this, will this property be taken away from you through bankruptcy?

Activities that would cause the protection of an LLC to be pierced may be different from state to state, so the best type of attorney to consult with is a civil litigation attorney in your state who's already litigated these issues.  2) LLCs offer varying degrees of protection depending on what state they're from and whether they're single member / multi-member.  3) An often-overlooked benefit of an LLC, or any business entity for that matter, is the ability to have the business entity file for bankruptcy. 

Generally with Subject to, if seller were to declare bankruptcy, you lose all equity/ownership of the property, correct?    

I'm interested to but a deal from someone he have bankruptcy his house arv around 350k...i dont jnow if i need to do the deal with lender and exc... or just take it subject 2 and do the rehab to get the arv i want and then refinance?

The borrower can file bankruptcy but then the property is tied up in bankruptcy and would need court approval for the sale - it will take several months to get the initial plan approved then several months to get it approved for saleIf it comes down to that you are better off buying it at auction.The last option is to take a huge risk and reinstate the loan but as mentioned without a title you have no clue what else could be owed- to do that would be foolish

The seller was filing bankruptcy and I was at the right place at the right time.

Debt is real and bankruptcies happen all the time. 

Consequently, my friend as the property manager, found a tenant that was a serial evictee (problem #2) - and apparently did not do a background check when she moved in summer 2022 (because when i looked up her name recently, i found the recent eviction 12/21 in less than one minute).My friend collected the rent for a few months and looked like everything was going well.Then he had to have a major operation unexpectedly this year, during which time, the tenant took advantage, stopped paying, and eventually filed for bankruptcy protection.

There's no way that the Fed Fund rate and 10-year notes to be above CPI- Most recession/stagflation/whatever in the past is always accompanied by super high unemployment and massive default/bankruptcy of companies.