Business Assets

[confusedinfl]

I am contemplating filing Chapter 7 because of an unfortunate financial event in my life. Prior to this I had a 787 FICO score, no credit debt and had never been late on a payment in my life!

I am self-employed and operate an S-Corp as the sole shareholder. I have not taken any salary or draw for the past 4 months because I have been unable to work enough to generate enough income to pay myself because of this event. I have two questions with regard to the business. Firstly the only assets are a computer and printer. Without these I would be unable to work at all. Will a trustee recognize this and classify these assets as exempt? Also, I sold my client base but will be subcontracting to the company I sold them too and will receive payments for that subcontracting from time to time but will vary according to the amount of work performed. Any idea how this should be reported as income when it varies so much?

[Minnymouth]

You need to talk to an attorney about this situation since your corp is involved. Especially since you have sold you client base and payments will be coming in every so often.

Most of us on the forum are not knowledgeable enough in this area to help you...... and we sure wouldn't want to lead you astray....

Minny

[SinkingFast]

Ditto's to what Minny said. Chat with attnys. Most of us have knowledge of personal BK, but there aren't many on here who are/were small business owners. Many of the small business owners' companies died a natural death and then the people filed personal BK. Which sounds like what you're doing.

The income from the sale could be variable, down the road. So if you happen to not qualify for Ch 7, and wind up in a 13, that could affect your plan payments.

One FYI I have for you. Don't worry about the computer. You're allowed to have a computer in the New BK Law. You can claim it in your Household goods under your Personal Property exemption.

[no_it_all]

Since all income and expenses pass through to shareholders in an S corp, you probably should explain to the trustee that you will have some deferred income to report. You can probably just estimate.