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    Business and Personal Bankruptcy

    I have a small car service with 4 vehicles in VA. Since Uber came to the picture it has taken a lot of my business away. I tried to fight back and get business but to no avail. Now I am running in high debt and high interest and am not able to over come it. I am thinking of filing for bankruptcy for a fresh start.

    The business as it stands is generating income to make ends meet but not with a past debt. This has caused me to take huge pay cuts and so now personal debt has risen up.

    My question for advice would be: Am I able to only file chapter 7 personally and be able to continue my business at a smaller capacity. I have loans of 3 of the 4 cars.

    Also if anyone knows of any non-profit counselors please let me know. Most of what I have found online are all for profit and pushing you towards services they offer. I need an unbiased consult.

    #2
    Your business generally doesn't cease to exist in a Chapter 7, but it would help to have additional details:

    - What is the structure of your business (sole prop vs. LLC vs. corp), and how much do you own?
    - Are you intending on including your business in a bankruptcy filing, or just file a personal bankruptcy?
    - What do you mean by "continue my business at a smaller capacity"? Do you want to surrender 3 of the cars?
    - Who is on the title for the cars?

    Comment


      #3
      valimoguy leonel9 has sent the same questions which I would have. It is really dependent on organization, personal bankruptcy, car titles, etc.
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

      Comment


        #4
        Originally posted by leonel9 View Post
        Your business generally doesn't cease to exist in a Chapter 7, but it would help to have additional details:

        - What is the structure of your business (sole prop vs. LLC vs. corp), and how much do you own?
        - Are you intending on including your business in a bankruptcy filing, or just file a personal bankruptcy?
        - What do you mean by "continue my business at a smaller capacity"? Do you want to surrender 3 of the cars?
        - Who is on the title for the cars?

        It's a S-Corp with me 100% owner.
        I would personally like to save the business and just file personal since the business is still generating an income for me. But I would need another job so I don;t put myself in the same personal mess. The business has gone down but I have structured it now where it can run with little attention. Thus freeing myself to focus on getting a job.
        I would prefer to only surrender 1-2 cars and keep the rest.
        tltles are on lien with the bank.

        Comment


          #5
          Originally posted by valimoguy View Post
          It's a S-Corp with me 100% owner.
          I would personally like to save the business and just file personal since the business is still generating an income for me. But I would need another job so I don;t put myself in the same personal mess. The business has gone down but I have structured it now where it can run with little attention. Thus freeing myself to focus on getting a job.
          I would prefer to only surrender 1-2 cars and keep the rest.
          tltles are on lien with the bank.
          An S-Corp is a Corporation and is a separate legal entity. the corp would not be affected by your personal filing as far as it is legally organized. However, if it has assets and the Trustee thinks that they can pierce the so-called "corporate veil" then you could be looking at the Trustee poking around to see what they could get. If the business is not worth anything, then the Trustee should go away. By you personally filing, you'll remove any personal guarantees.

          Are the cars personally guaranteed? If not, then you personally filing would not affect the vehicles. You would need to file bankruptcy for the business and that means liquidating its assets and closing (unless it's a Chapter 11 which is a reorganization).

          Since you have an operating business running under the veil of a corporation, you should definitely use an attorney and definitely shop this around through a few different attorneys. I'm unsure of whether you personally own the vehicles or they are really owned by the corporation.



          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog

          Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

          Comment


            #6
            Originally posted by justbroke View Post
            An S-Corp is a Corporation and is a separate legal entity. the corp would not be affected by your personal filing as far as it is legally organized. However, if it has assets and the Trustee thinks that they can pierce the so-called "corporate veil" then you could be looking at the Trustee poking around to see what they could get. If the business is not worth anything, then the Trustee should go away. By you personally filing, you'll remove any personal guarantees.

            Are the cars personally guaranteed? If not, then you personally filing would not affect the vehicles. You would need to file bankruptcy for the business and that means liquidating its assets and closing (unless it's a Chapter 11 which is a reorganization).

            Since you have an operating business running under the veil of a corporation, you should definitely use an attorney and definitely shop this around through a few different attorneys. I'm unsure of whether you personally own the vehicles or they are really owned by the corporation.


            This is really helpful. Thanks

            The business has no asset or sale value. It just generates income. I don;t think the Trustees will find anything of worth.

            The 3 cars have liens on them that are personally guaranteed by me. Basically they are personal auto loans.

            Comment


              #7
              Originally posted by valimoguy View Post

              This is really helpful. Thanks

              The business has no asset or sale value. It just generates income. I don;t think the Trustees will find anything of worth.

              The 3 cars have liens on them that are personally guaranteed by me. Basically they are personal auto loans.
              Your experience may be different, but I had an s-corp. I filed personal bankruptcy and discharged all my personal guarantees. A couple of the companies that did business with the s-corp still came after the s-corp. I had to dissolve the s-corp. I still get a call once in a while but they quickly go away when I tell them the corp is dissolved and my personal liability was discharged. I actually haven't heard from them in about a year but do get 2 letters (approx) every year addressed to the s-corp.

              It's just not that simple and they are not "basically" personal loans if they're in the name of a corporation (even with a personal guarantee).

              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog

              Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

              Comment

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