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Will Trustee take my Business??

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  • Will Trustee take my Business??

    Hello,

    I am wondering if anyone can offer advice or share their situation.

    I have a SERVICE BUSINESS (LLC) with 0 debt, and maybe $400 of inventory. Since it is service, it mainly consists of just my customers.(Average gross monthly income is 4k )

    My questions - When I file Ch7, if this is the only asset I have, will the trustee likely take it? If so, what would I do, turn over a customer list? Customers are NOT under contract, it is a month-by-month basis.

    Also this is my only source of income, would the trustee take that in to consideration?

    How would I pay bills?

  • #2
    Originally posted by Phx View Post
    Hello,

    I am wondering if anyone can offer advice or share their situation.

    I have a SERVICE BUSINESS (LLC) with 0 debt, and maybe $400 of inventory. Since it is service, it mainly consists of just my customers.(Average gross monthly income is 4k )

    My questions - When I file Ch7, if this is the only asset I have, will the trustee likely take it? If so, what would I do, turn over a customer list? Customers are NOT under contract, it is a month-by-month basis.

    Also this is my only source of income, would the trustee take that in to consideration?

    How would I pay bills?
    The first question is what is the value of the business? what could you sell if for? Without you probably very little. The next question is what exemptions do you have available? Your business is like any other asset. As long as you can exempt the value you are okay and since the actual value is probably very little is should not be hard to do.

    Comment


    • #3
      msm859

      Thank you!

      I have seen other similar business sell between 20k-25k.

      I know about the exemptions for home, personal property, car ,tot, etc.

      Any idea where I can find the exemptions my business may qualify for?

      Comment


      • #4
        Originally posted by Phx View Post
        msm859

        Any idea where I can find the exemptions my business may qualify for?
        On the exemptions tab on this site it shows exemptions for all states. Here is the link http://www.bkforum.com/wiki/Arizona

        In AZ they allow $2500 tools of trade exemption...
        Filed Ch 7 Feb 2011! Next stop 341 meeting sometime in March...
        Discharged!!!! 5-2011 CLOSED 6-2011

        Comment


        • #5
          A service business based upon you is pretty worthless to anyone else. You may have to pay some blue sky to buy it back from the trustee, but it should be cheap.
          All information contained in this post is for informational and amusement purposes only.
          Bankruptcy is a process, not an event.......

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          • #6
            Thank you Frogger!

            Comment


            • #7
              Originally posted by frogger View Post
              A service business based upon you is pretty worthless to anyone else. You may have to pay some blue sky to buy it back from the trustee, but it should be cheap.
              Agreed. I had to pay $2500.00. I could have fought it but that would have cost at least $1,000 and the reality is the trustee gets 25% - $625 and the rest will go to the IRS as a preferential creditor. So as a business decision it made more sense to simply pay.

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              • #8
                If other similar businesses have sold for $20-$25K, would that value be used by the trustee as an asset even though it's a service based business?
                Last edited by carlsbadmike; 02-06-2011, 03:37 PM.

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                • #9
                  Originally posted by carlsbadmike View Post
                  If other similar businesses have sold for $20-$25K, would that value be used by the trustee as an asset even though it's a service based business?
                  Carlsbadmike- This is what is confusing to me. That value is based on me selling my accounts to another company in the same industry. The process would take months (assuming I could find a buyer who wants the accounts) and in the meantime, I would still be servicing the accounts on a weekly basis.

                  IF - I am required to turn the business over, who will service the accounts while the Trustee finds a buyer? Not me!

                  IF - I am given the option to buy it back from the trustee. Can he really base the value on 20k?

                  Like Frogger said - hopefully the Trustee will sell if back to me CHEAP, realizing it's worthless without me! I am meeting with my attorney tomorrow; I will post back.

                  Comment


                  • #10
                    I had to dissolve my business, which was a service based S Corp.

                    Comment


                    • #11
                      Sorry to hear that.

                      How did they determine the value on your service business? Did you argree with the value?

                      Did you have the opportunity to buy it back? (assuming you wanted to)

                      Any advice?

                      I want to keep my business; It is how I pay my bills!

                      Thanks

                      Comment


                      • #12
                        I had to provide income/loss statements. I had quite a bit more a/p than a/r so there was no value. My business income had dropped by 95% which would no longer support the business or me. The remaining business was not guaranteed and I couldn't sell it. I personally guaranteed credit for the business. It was my only source of income.

                        Comment


                        • #13
                          Bump...

                          Comment


                          • #14
                            Outcome

                            Phx,

                            Please let us know the outcome of your situation.

                            Thanks.
                            Mike.

                            Comment


                            • #15
                              Your $400.00 inventory is worth about $40.00 on Craigslist.

                              I would reduce the inventory to close to zero as possible.

                              As for the name of the business, go to the State building and visit the Secretary of the State's office and get the name of the business tradenamed. That will sit you back $10.00.

                              Next go to an office supply store and buy the program that can make checks and has some blank checks.


                              If the trustee takes your business, good ridance. Create a new business and whatever the name of the bussiness is, call it when you answer the phones by the tradename. Create new checks and use the tradename on the checks but run the checks under the new business name. As far as anybody will be able to see, the old business that might disappear will be 'operating' as if nothing had happened.
                              Golden Jubilee was a year-long celebration held every 50 years in which all bondmen were freed, mortgaged lands were restored to the original owners, and land was left fallow: Lev. 25:8-17

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