QUESTION
If I'm planning to file chapter 7 bankruptcy, do I have to sell my business?
Asked on Jul 18th, 2012 on Bankruptcy - New Jersey
More details to this question:
I have a business but I'm planning to file Chapter 7 bankruptcy. Is it mandatory for me to sell it in order for the creditors to get some, or all of, the money in order to cancel my debts? Please let me know if there are any exceptions for me to be able to keep my business.
17 ANSWERS
Appellate Practice Attorney serving Cheyenne, WY
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Lynn Boak Attorney at Law
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If your business is a separate entity, i.e. LLC or Sub-S corporation you may not have to sell it. If it is a sole proprietorship, you may have to sell it or turn it over to the U.S. Trustee. You might want to consider Chapter 13 instead if it is a viable business.
Answered on Aug 09th, 2012 at 12:10 PM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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The business could file a chapter 11 in order for you to keep it. If you file a chapter 7, the trustee will seize and sell all of the business assets to pay creditors a pro rata share of what is owed to them.
Answered on Aug 07th, 2012 at 1:49 PM
Bankruptcy Attorney serving Atlanta, GA
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Saedi Law Group, LLC
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Many times it is not necessary for a business owner to sell their business but I would suggest that you meet with a bankruptcy attorney to review all assets and see if your business is protected.
Answered on Aug 07th, 2012 at 1:23 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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It depends on many issues: value of business, including accounts receivable minus debt owed by the business. Please understand that filing for bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. Most Arizona bankruptcy attorneys offer a free consultation about the basics of bankruptcy.
Answered on Aug 07th, 2012 at 12:53 PM
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You may be able to keep your business in a Chapter 7 bankruptcy. I suggest consulting with a capable bankruptcy attorney so that you can get specific advice. Depending on the assets of the business, the business may not be affected by your filing.
Answered on Aug 06th, 2012 at 9:42 PM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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The answer is maybe. It depends upon what the business does, what it owns and a host of other things. This is an issue that requires careful consideration by a competent bankruptcy attorney.
Answered on Aug 06th, 2012 at 9:31 PM
Criminal Law Attorney serving Fremont, CA
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Steven J. Alpers, A Professional Corporation
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Not necessary. I have no idea what it is worth. The trustee could question its value and then if you do not have exemptions to protect the business you will either have to sell it or pay some money to the trustee.
Answered on Aug 06th, 2012 at 8:52 PM
Daniel James Wilson
I will assume your business is registered w/ Secretary of State and not sole prop. Your business is a possible asset subject to turnover to the trustee for the benefit of creditors. Talk to a BK attorney who has knowledge of small businesses.
Answered on Aug 06th, 2012 at 8:45 PM
Commercial Bankruptcy Attorney serving Davie, FL
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Law Office of Jeffrey Solomon
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You definitely need to consult an attorney to properly advise you which will depend on the details about your business. You will also want to discuss a possible chapter 13 in which you do not have to surrender assets such as your business.
Answered on Aug 06th, 2012 at 8:26 PM
Bankruptcy Law Attorney serving Huntington Woods, MI
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Austin Hirschhorn, P.C.
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You don't have to sell your business and if you do file any sale of a business would have to be listed in the bankruptcy schedules and would be subject to strict scrutiny by the Trustee and the Judge. For those reasons, I wouldn't recommend a sale to a client I was representing who was planning to file. The Bankruptcy Code contemplates that all creditors will be treated equally and if you were to sell your business and use the proceeds to pay your business creditors only it is possible that the court might consider those payments to be preferences and the Trustee would try to recover those payments for the benefit of all of your creditors. You don't indicate if "your business" is a proprietorship, partnership, corporation or LLC. This could make a difference since if the business was a separate entity wholly owned by you that ownership would have to be disclosed in your bankruptcy filing and that might make that entity part of your Bankruptcy estate. Because of "your business" some special planning might be required in connection with your bankruptcy filing. You need to hire a very capable bankruptcy attorney to represent you in your filing.
Answered on Aug 06th, 2012 at 4:30 PM
It depends. There are ways of keeping the business. You need to talk to an attorney about your options. Depending on your assets and the kind of business you may have more than one option.
Answered on Aug 06th, 2012 at 12:02 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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It depends on its value. If you file bankruptcy the Trustee is authorized to sell it.
Answered on Aug 03rd, 2012 at 11:35 PM
It first depends on whether the business is a DBA or a corporation. He can possibly still keep your business, but it also depends on the business assets and income you derive from the business.
Answered on Aug 03rd, 2012 at 11:29 PM
Not necessarily. It depends upon the particular facts of your case. Tell your lawyer everything and work with the lawyer to determine what you have, what you need and what you can give up if you had to. In general, the bankruptcy law is designed to give you a fresh start, not put you on the street. Keeping your business so you can support yourself and your family is a good thing, and the bankruptcy law will let you do that. You may not be able to keep everything, or you might, but you surely can keep enough to keep going.
Answered on Aug 03rd, 2012 at 11:20 PM
Immigration Attorney serving Arlington, TX
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Law Office of Pho Ethan Tran, PLLC
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If you are filing for chapter 7, your businesses are not exempt from the bankruptcy estate. Thus, it could be seized by the trustee and sold to repay your creditors. Have you considered filing for chapter 13? You can maintain possession of your business in that chapter by agreeing to a repayment plan for 3-5 years.
Answered on Aug 03rd, 2012 at 11:14 PM
General Practice Attorney serving Crystal Lake, IL
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Bruning & Associates, P.C.
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Without more details, though, the answer is "It depends." Your business is considered an asset under the bankruptcy code. However, whether it will be of any interest to a bankruptcy trustee depends on a number of factors. Is the business something that is personal to your own skills, such as a consulting or personal service business? Does the business have inventory or goods to be sold? Has the business been profitable? Do you own the business with any partners? All of these are factors you should discuss with a skilled bankruptcy attorney in order to determine what makes the most sense for you in deciding whether or not to file for bankruptcy.
Answered on Aug 03rd, 2012 at 11:03 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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It all depends on how the business is set up? Is the business a corporation? Is it an LLC or is it a sole proprietorship? Is it making money? All of these items have to be answered before we can tell you answers because it bears on the facts. Definitely seek a consultation with a qualified Bankruptcy Attorney who will give you a free consult. Many of us do.
Answered on Jul 27th, 2012 at 3:24 PM