Operating a business while in BK?

[demismom]

We've been antique dealers for 15 years. It's not our only income, my husband has a full-time job.

We fall below the median for the State of Michigan. Does anyone know if we are going to be able to operate our business as usual after we file? I know our assets (we don't really have any, except inventory) become property of the Trustee at the time of filing. How are we supposed to do business if we can't sell our inventory? I keep forgetting to ask the attorney this. It's not considered transferring of an asset, right? We've sold all of our great stuff in the last 2 years to try and pay the bills, but it didn't work, so we decided to file. Thanx for any insight.

[HHM]

You are generally allowed to operate a business while in BK. But given the nature of your business, this is a discussion you need to have with the attorney. BK's involving businesses tend to get scrutinized more than your run of the mill BK.

[wrinkleigh]

Really depends on how you are set up, are you a corporation, LLC, or sole proprietorship (sp?).

More information would help us.

Thanks

[bige1030]

I agree - if your business is a corporation or LLC, its assets are separate from your own personal assets, and you would be able to sell them as if nothing happened. If it's a sole proprietorship, whether or not you get to run your business depends on what chapter of bankruptcy you file. If you file chapter 7, your business property will more than likely be liquidated (i.e. sold) for the benefit of your creditors unless you can claim it as exempt. Then, you won't be able to sell your property at all - that would be the trustee's job. If you file chapter 13, you're allowed to run a business, but all of the proceeds of selling nonexempt property (or an equivalent amount derived from some other source, like from working) must be paid into the plan sometime during the life of the plan for the benefit of unsecured creditors.

[demismom]

We are a sole proprietorship, file a Schedule C every year. Well, we're HOPING to file Chapter 7, that's what our attorney is telling us, but I have a sinking feeling that we'll end up in Chapter 13 because it appears we may have around $400 disposable income. Not sure yet. The numbers I used for expenses show this anyway, but who knows what numbers the attorney is going to come up with. We're still waiting for the petition and schedules to get finished up so we can review them.

[wrinkleigh]

If you are a sole proprietorship, the assets of the business are the same as your personal assets. In a ch7, you can claim your exemptions, but everything else can be seized by the trustee. You would likely need to close the business.

I am not famalier with ch13, I am sure others will chime in.

Good luck to you.