.jpg)
Do you ever file personal chapter 7s for people who want to keep
Do you ever file personal chapter 7s for people who want to keep their small
business running?
I have had a couple cases where I filed personal Chapter 7s for sole
proprietors where I did not run into any problems with a Chapter 7 trustee.
One of the debtors was a caterer, another one was a hair stylist. The
assets in each were all exempted and the debtors received a discharge
without any interruption to their businesses.
Does incorporating or forming an LLC really make much of a difference if the
business is run by only one person? I assume if the trustee was interested
then he could just vote the shares to liquidate so incorporating would not
really offer the debtor any real protection.
I guess my question is: when is it really NOT a good idea to file such
cases? It was brought to my attention that technically the debtor doesn't
even have authority to continue with the business in a Chapter 7 (if it's a
sole proprietorship) and any income generated from the business is an asset
of the estate. While this may be true, practically speaking, it has not
been an issue in any of my cases since the debtors did not make that much
money and there were no real assets to liquidate.
For those who have been around a while, what is your take on this? Do you
always file Chapter 13s for people who want to keep their small businesses
running? Is there any benefit to having the debtor incorporate the business
before you file a Chapter 7? What horrible thing (other than liquidation,
shut down, and a malpractice suit) am I not seeing here?
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
Do you ever file personal chapter 7s for people who want to keep their small business running?
I have had a couple cases where I filed personal Chapter 7s for sole proprietorswhere I did not run into any problems with a Chapter 7 trustee. One of the debtorswas a caterer, another one was ahair stylist.arge without any interruption to their businesses.
Does incorporating or forming an LLC really make much of a difference ifthe business is run by only one person? I assume if the trustee was interested then he could just vote theshares to liquidate so incorporatingwould not really offer the debtor any real protection.
I guess my question is: when is it really NOT a good idea to file such cases? It was brought to my attention that technically the debtor doesn't even have authority to continue with the business in a Chapter 7 (if it's a sole proprietorship) and any income generated from the business is an asset of the estate. While this may be true, practically speaking, it has not been an issue in any of my cases since the debtors did not make that much money and there were no realassets to liquidate.
For those who have been around a while, what is your take on this? Do you always file Chapter 13s for people who want to keep their small businesses running? Is there any benefit to having the debtor incorporate the business before you file a Chapter 7?What horrible thing (other than liquidation, shut down, and a malpractice suit) am I not seeing here?-- Holly Roarkholly@roarklawoffices.comwww.roarklawoffices.comCentral District of CaliforniaConsumer Bankruptcy Attorney
The post was migrated from Yahoo.