We are going to file ch 7 and I am a sole prop. of a *very small* biz. (This is only going on my 3rd yr. of which the first 2 yrs I made only a couple of hundred profit though this yr I think I will make around $1500 profit. So how does bk effect my small biz since it is a sole prop. and not a inc or llc? Could they make me sell my inventory or office supplies (computer)? Also, I want to keep my biz open it is just now starting to get known and I can see it actually doing ok.
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Last edited by PoorAnnie; 09-11-2008, 11:06 PM. -
Depends on if you can fit the business assets in under your personal exemptions. -
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Hi Im in the exact same boat but I've been in business 26 years..I'm trying to keep it open also. Since your biz is just an extention of yourself, you'll have to fit your equip, and stuff in your exemptions. Depending on what state your in. There is also..."tools of the trade" at least in Ca. that you can use.Comment
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Don't know if you can keep the name
Did you ask your atty?Filed C7 Aug 31 2008
341 Oct 8 2008
Discharged Dec 9 2008
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What?! This would be awful if I had to do that! I have biz cards, car magnets, web domain, brochures etc! That is how I am known and finally just got my name out there! This would be a hard hit to it.Originally posted by BROKENN View PostDon't know if you can keep the name
Did you ask your atty?
We haven't met with him yet, this will be our first free consultation.Comment
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Gather all your questions for the atty and bring all your financial summaries so you can get as much data as possible.Originally posted by PoorAnnie View Post
Because I am a Sole Prop that means it is Personal. And I had to give up mine and I am C7. I think you can keep it in a C13, anybody know?
When is you consultation? It will be OK, hang in there
Filed C7 Aug 31 2008
341 Oct 8 2008
Discharged Dec 9 2008Comment
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i think CH11 might be an option for a sole prop wanting to reorganize. do some reading on that annie - here's a link:
Chapter 11 is typically used to reorganize a business, which may be a corporation, sole proprietorship, or partnership.A corporation exists separate and apart from its owners, the stockholders. The chapter 11 bankruptcy case of a corporation (corporation as debtor) does not put the personal assets of the stockholders at risk other than the value of their investment in the company's stock. A sole proprietorship (owner as debtor), on the other hand, does not have an identity separate and distinct from its owner(s). Accordingly, a bankruptcy case involving a sole proprietorship includes both the business and personal assets of the owners-debtors. Like a corporation, a partnership exists separate and apart from its partners. In a partnership bankruptcy case (partnership as debtor), however, the partners' personal assets may, in some cases, be used to pay creditors in the bankruptcy case or the partners, themselves, may be forced to file for bankruptcy protection.Comment
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Thanks for the definition!Filed C7 Aug 31 2008
341 Oct 8 2008
Discharged Dec 9 2008Comment
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Thank you for the information. This will be one of my top questions to the atty.
Do you know if ch. 13 is different in regards to "keeping" the biz?Comment
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13 is intended for debtors that want to reorganize and repay while protecting all assets. i would think that includes your nonconsumer/business interests/assets as you are a sole prop. an attorney is the one to tell you the pros/cons of 13 vs. 11 vs. 7.
let us know what you learn!
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You guys are way overthinking this. Nobody wants magnets and brochures or a web domain for a business that is barely profitable.
And for darn sure you don't want any part of a Chapter 11. Just the monthly legal and accounting fees as you report your reorganization plan to the court on a timely basis will eat you alive. A Chapter 11 isn't practial for the vast majority of small businesses.Comment
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small business is an extension of ones income in a definition sense. I filed bankruptcy this year and no way could I file a chapt 7 and keep the business. it all depends on your cash flow into your accounts at the bank and assetts. You dont get to chose which plan you will file. the courts will decide on your behalf when looking at all of yoru bank statements and bills for the last 12 months............ I think you will be in chapt 13 with any profits.... after al a profit is a profit and you owe debt.Started in Chapt 13 Switched to Chapt 7 Discharged 2009 Dec.........Filed New Chapt 13 in 2010 to deal with new surgery bill and stripped second mortgage! The story continuesComment
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Ok, went to the atty. and I think he probably wanted to laugh at my biz since it is so little and I have only so little inventory and profit. He said I could keep the name --that was the part I was worried about the most since I knew I don't have much assets in it but that my "brand and name was finally getting out there and I didn't want to have to use a different biz name. He said since it was so little and no high value he didn't see any problems with it. I felt reassured so hopefully this is true. Maybe it is not the same with a bigger biz that is sole prop.Comment
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Yea my last consultation said the same..he told me the Trustee wouldnt bother with it since there was nothing to sell...He asked about the inventory and I told him...let the Trustee take it, sheet I cant sell it maybe he can.lolComment
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