Posts Tagged ‘business bankruptcy’

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Documents sent to trustee and business asset information

Friday, November 14th, 2008

The documentation was sent off to the trustee as she had requested. It was about 2000 pages! I also got information from her concerning the sale of some business assets. Since the corporation is not filing bankruptcy, it is a personal bankruptcy, I as the owner of the business need to deal with the assets as I see fit.

Any assets sold, however need to be “fair market value” as if the business must file bankruptcy in the future any monies will need to be accounted for and turned over to the court. Any normal expenses are allowed to be spent.

The fair market value comes into play like I had mentioned in earlier posts. This prevents people from selling assets cheap to friends, family, etc. This would be preferential tratment, and/or improper transfer of assets.

Hopefully the sale will go through, less stuff to worry about.

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Still unsure about business chapter 7 bankruptcy

Sunday, November 2nd, 2008

The business has now closed, and I have moved out of the building. The good news is I have three people interested in buying many of the assets of the business. My lawyer had requested information from the trustee whether I should file a seperate business bankruptcy, or liquidate. And if any assets are sold, what happens. Does she need to approve the sale, and/or set the pricing?

It seems this is getting more stressful, and not less stressful as most people say occurs after you file. I’m sure this is due to the business, as if I didn’t have this mess to deal with it would be much easier.

It seems there are more questions than answers.

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Closing the business will it need to file bankruptcy

Monday, October 20th, 2008

Today I decided I would need to close the business. My month to date sales are down about 90% from last year. I am barely bringing in enough money to pay the electric bill, let alone any other bills. This is tough. I’ve been in this business for 17 years, and had the store for 3 years now, but the economy has changed, and my business is a sport for people. Not needed, good sales when there is extra income… with high gas prices and a bad economy, no one is even coming in the doors.

Not only that, but if I stay in the building I will still be responsible for my rent. Since I included my business landlord in the bankruptcy if I am out of the building the same month as filing I am only responsible for rent prior to filing.

One more thing to worry about. Ugh.

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chapter 13 versus chapter 7 bankruptcy

Friday, August 8th, 2008

So… What is the difference in a chapter 13 or a chapter 7 bankruptcy? There are a lot of great sites on the web that can go into much more detail than I will here. But you will get the basics.

To start, there are some great books available to learn all about bankruptcy. Make sure you always get the latest version available. First you can check out Bankruptcy: Is It the Right Solution to Your Debt Problems? – If you are a fan of the “Dummies” series of books be sure to look at Personal Bankruptcy for Dummies.

Basically a Chapter 13 bankruptcy is a court approved payment plan which normally lasts 36 -60 months based on your disposable income. How much gets repaid to your creditors is dependant on a number of issues. It can be as little as 10% of your debt, or as much as 100%. A good resource for this information is the Nolo Press book Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time.

A chapter 7 bankruptcy is a liquidation. You are allowed certain exemptions, either federal or by state which you can keep. Anything else is to be sold or liquidated and repayed to the creditors. In 2005 the government changed the bankruptcy laws making it harder to file for chapter 7. You must now pass what is called the “means test” to qualify and be able to file this way. A great resource for this is also a Nolo Press book: How to File for Chapter 7 Bankruptcy. It can give you great tips.

Although some of the above referenced books are for people who want to go it on their own. (This is called a “Pro Se” Filing) I recommend a lawyer!

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First Bankruptcy lawyer consultation

Monday, August 4th, 2008

Well, today we had our first consultation. I am trying to determine whether I have to do a business bankruptcy, or personal bankruptcy. Virtually all our debt is due to the business. It is unclear whether the business can keep operation or will need to close.

After the consultation, we determined we didn’t like the feel of this particular lawer, or firm. It appeared to be a wham-bam thank you ma’am type approach. He stated we would need to do a chapter 13 bankruptcy. (I’ll cover the different types in a future post) A chapter 13 is a repayment plan through the bankruptcy court. How much is repaid and how long of a period of time is determined by the court based on your disposable income.

He said basically the business would just have to close down and be liquidated. So now we wait for the other appointment.

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