If I file Chapter 7 for personal debts, will I have to involve the catering business which I co-own? 16 Answers as of January 07, 2015

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!

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Stephens Gourley & Bywater | David A. Stephens
Yes. It is an asset and must be listed.
Answer Applies to: Nevada
Replied: 1/7/2015
Law Office of Andrew Oostdyk
Law Office of Andrew Oostdyk | Andrew Oostdyk
When filing for Bankruptcy you will need to disclose all of your assets and liabilities, therefore you will need to list your ownership interest in the business and the fair market value of that business. This question needs further details concerning how the business is organized, is it a Corporation, LLC, sole-proprietorship, etc.? Does the business have any debt of its own? Whose name is the debt in, the business, yours, or your co-owner? If you are not making any income at this time, you likely qualify for a Chapter 7, but it is in your best interests(and your co-owner's best interests), to consult with a Bankruptcy Attorney to determine if any assets are at risk by filing Bankruptcy.
Answer Applies to: Texas
Replied: 1/6/2015
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The bankruptcy code requires you to list all (as in every single one) of your debts. So if you owe a business debt, you have to list it. It also requires you to list all of your assets, which would include your 1/2 interest in the business. You need to seek the advice of competent counsel. You are entitled to "exemptions" which is property your creditors can not have. A good lawyer can maximize the exemptions available to you.
Answer Applies to: California
Replied: 1/6/2015
Ronald K. Nims LLC | Ronald K. Nims
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.
Answer Applies to: Ohio
Replied: 1/6/2015
If the business is not incorporated you are a sole proprietor and any assets or debts of the business would be yours personally.? Those debts would be discharged also in your bankruptcy.? If the business had a net worth (assets less liabilities) you would have to account for that.? If the business is incorporated any personal responsibility for those corporate debts would be discharged though the corporation would still be responsible.
Answer Applies to: Minnesota
Replied: 1/6/2015
    Garner Law Office
    Garner Law Office | Daniel Garner
    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.
    Answer Applies to: Oregon
    Replied: 1/5/2015
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    The business is involved but only as to the point of any assets that belong to you and any account receivables you may have outstanding. Otherwise, if it is not a profitable business then it should have no real affect on the business. You should come see a local attorney to discuss the details of your case and we can advise you how to proceed.
    Answer Applies to: New York
    Replied: 1/5/2015
    D.J. Rausa, Attorney at Law | D.J. Rausa
    To the extent that you have personally guaranteed the business debts, they must be listed on your bankruptcy. It would be good to know what type of business entity your catering business is. What are the assets of the business, and what are the accounts receivables?
    Answer Applies to: California
    Replied: 1/5/2015
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    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!
    Answer Applies to: Colorado
    Replied: 1/5/2015
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    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.
    Answer Applies to: Nevada
    Replied: 1/5/2015
    Law Offices of Daniel J Winter
    Law Offices of Daniel J Winter | Daniel J Winter
    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.
    Answer Applies to: Illinois
    Replied: 1/5/2015
    Michael J. Duggar, P.A.
    Michael J. Duggar, P.A. | Michael J. Duggar
    The answer to your question unfortunately depends on how the business is organized...D/B/A, S-corporation, LLC, etc. If the business is a personal asset, you must list it in your bankruptcy filing. The business does not have to file its own bankruptcy if it is incorporated or an LLC, but the value of the ownership of the business and what the business owns, may require its value being listed in Schedule "B" of your personal property. In my experience, many small businesses don't own any or few assets to make their inclusion to the case negligible, but they MUST be listed. In summary, the business can survive your personal bankruptcy.
    Answer Applies to: Florida
    Replied: 1/5/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    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.
    Answer Applies to: Wisconsin
    Replied: 1/5/2015
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    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.
    Answer Applies to: California
    Replied: 1/5/2015
    J.M. Cook, P.A. | J.M. Cook
    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.
    Answer Applies to: North Carolina
    Replied: 1/5/2015
    Stittleburg Law Office
    Stittleburg Law Office | Bernd Stittleburg
    Whether your business assets will get caught up in your personal bankruptcy depends on who owns the asset, you or the business. If you own it, it will get caught up in the bankruptcy.
    Answer Applies to: Georgia
    Replied: 1/5/2015
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