QUESTION
If I file Chapter 7 for personal debts, will I have to involve the catering business which I co-own?
Asked on Jan 02nd, 2015 on Bankruptcy - North Carolina
More details to this question:
I am thinking of filing Chapter 7 bankruptcy for personal debts. I am also the co-owner of a small home-based catering business that isn't very profitable at this time, and I don't even pay myself. If I did file bankruptcy, would I have to involve the business? I already have a consolidation loan, but I'm having a hard time paying it and I don't know how much longer I can. I don't have any other full or part-time job either. If I do have to involve the business, what will happen? Thanks!
8 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
at
Ronald K. Nims
Update Your Profile
Your ownership interest in the partnership (or LLC or corporation) is an asset that must be listed on your bankruptcy schedules. The Trustee can't seize any of the assets of the partnership (in a catering business this would be the pots, pans, client list and - most importantly - any accounts receivable) However, the Trustee can take your ownership of the partnership - but in a partnership that doesn't make any money, it's unlikely that he./she would be interested in it.
Answered on Jan 06th, 2015 at 12:40 AM
Your ownership interest in a business would be considered an asset which you would have to report. Depending on the value of your interest, you may or may not be able to exempt it. If you cannot exempt it, the bankruptcy trustee probably would try to get the other co-owner(s) to buy out your share and the proceeds would be used to pay some of your debts. Depending on how your business is structured, the worst-case scenario would be that the trustee could force the liquidation of your business despite the wishes of your business partner(s). You would be wise to discuss your situation with an experienced attorney, and then the courteous thing to do would be to discuss the possible outcomes with your business partner(s) before filing bankruptcy.
Answered on Jan 05th, 2015 at 8:41 PM
Bankruptcy law requires you to list everyone you owe and everything you own. Leave anything off your bankruptcy and they will make a federal case out of it. In most instances, unless the assets of the business are very valuable, nothing will happen to the business.
Answered on Jan 05th, 2015 at 8:24 PM
Based on what you have shared here, I don't believe the Chapter 7 Trustee would have any interest in your catering business. "Labor intensive" businesses don't generate much interest on the part of these Trustees. Pay an experienced attorney for one hour of their time so there are no mistakes. Good luck!
Answered on Jan 05th, 2015 at 8:16 PM
Debt Settlement Attorney serving Chicago, IL
at
Law Offices of Daniel J. Winter
Update Your Profile
To a certain degree, the business is involved, even if it is only to show it has no value. Generally, your business won't be affected if that is the case. You should call a bankruptcy lawyer for a consultation to review your options and go in to more detail about this.
Answered on Jan 05th, 2015 at 8:11 PM
Bankruptcy Attorney serving Madison, WI
at
Richard B. Jacobson & Associates, LLC
Update Your Profile
Based on the bare facts you have stated, nothing much should happen to the business. You list it on the Personal Property schedule (B), and value it based on the total value of its assets minus its debt. Depending on what other exemptions you may have, you might be able to exempt the total value of the business. But this is a highly fact-based situation: consult an experienced bankruptcy lawyer soon. Good Luck.
Answered on Jan 05th, 2015 at 8:10 PM
Complex Litigation Attorney serving Costa Mesa, CA
at
Thomas Vogele & Associates, APC
Update Your Profile
Your ownership interest in the business would become property of your bankruptcy estate if you file, and thus be involved in the case. When you file bankruptcy, everything you own becomes property of the estate and you lose ownership and control of it. You should contact a bankruptcy lawyer and discuss your options. Generally, a bankruptcy lawyer will meet with you and explain the process without a fee. Good luck.
Answered on Jan 05th, 2015 at 10:14 AM
Business Bankruptcy Attorney serving Raleigh, NC
at
J.M. Cook, P.A.
Update Your Profile
You must include all your debts and all your assets so, yes, if you have a home-based business, you would have to list business debts and assets as well. If the business is incorporated, you would list only the shares or interests. For the most part, nothing would happen to the business. The Court is interested in assets it can use to pay creditors. You should be able to easily exempt any equity in this asset. Make sure you consult with a qualified bankruptcy atty and they will be able to guide you through the process to protect your business.
Answered on Jan 05th, 2015 at 10:08 AM