We are planning on filing personal bk, and have a sole propriertorship. Business has no debts, no assets, no income in the last 4 months, and one A/R that will be mostly distributed immediately as income to us when we receive it to us to pay backed up bills. Should I turn it into a corporation to seperate it from my personal bk? Once money starts coming in (I hope), we will only be taking a small salary so that the business can start acquiring money, not as a form of hiding it, but to build funds to pay consultants, vendors, etc. so that it can stay afloat. Any advice is appreciated. Thanks!
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Probably not. If it's not worth anything, then you can probably exempt most everything. If you incorporate it, then you would lose those exemptions.
If you want to incorporate, I would do it after filing for bk.
JMOAll information contained in this post is for informational and amusement purposes only.
Bankruptcy is a process, not an event....... -
Frogger is right. Don't do anything before your BK discharge!Originally posted by frogger View Post
Filed CH 7 9/30/2008
Discharged Jan 5, 2009! Closed Jan 18, 2009
I am not an attorney. None of my advice is legal advice in any way..Comment
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But the business can't acquire money as a sole propriership, it is all considered my income, and will be considered so for determining my disposable income, when in reality it won't be disposable to me, it is needed for my business to run. It doesn't have ANY assets that would be available as a personal exception. If I have to consider business income to pay creditors, business won't function, and I will have NO income. I'm thinking the best way is to pay myself a set salary , which I can't do as a sole prop. I am trying to plan this way in advance in case I am forced to file.Comment
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