I filed chap 7 and now I am in limbo. My business is incorporated and I was told that I could still run the business. The question is , how is it possible. All of my creditors including those with personal guarrantees for the business are listed on the Chap 7. I am assuming that my vendors will no longer want to do business with me. I am thinking my landlord will want me out asap. Is this true? Will I have a choice to pay off whoever I want?
Due to the fact that the business is incorporated, it is a separate entity from yourself. You went through bankruptcy, but your business did not. Therefore, the business should continue to pay its creditors if it wishes to stay in business. You may not be personally liable if your bankruptcy discharge is granted, but the business will still be liable for the debts and creditors can seek payment from the business. If the vendors are still being paid, they likely will continue to work with you. The same goes for your landlord (especially in this economy). It is possible that if you want to obtain new credit for the business, the creditors may look at your personal credit history and it may be harder to obtain new credit for the business. Did you speak to your bankruptcy attorney about these issues prior to filing? It is often a difficult situation when you own a business and are filing bankruptcy personally. Best of luck to you!
When you say "I filed for Chapter 7", are you saying you individually, or are you saying the business entity?
Assuming only you individually filed for bankruptcy, but not the business, the business could still operate.
If the business filed for Chapter 7 bankruptcy, the Chapter 7 trustee would have to decide whether to continue to run the business. In most cases, the business would just wind down.
Is the lease with you individually or with the business entity?
The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the State of California). For specific advice about your particular situation, consult your own attorney.
Don't know all the facts. Possibles are:
1. Convert chapter 7 to 11 and see if its viable.
2. If business is not capital equipment heavy, why not start another one after your fresh start?
3. Choice? In a business 11, vendors who provide new value are protected. An 11 is expensive though.
4. You also seemed to hint that others were interrelated and I can't tell if continuing business would impact you as to them.
There are A LOT of things to consider. Is the business one that can be identified, packaged and "sold" by the trustee to operate without you?
many questions.....What does your bankruptcy attorney say?
If this is your chapter 7 and business is not encumbered and if it is dependent upon your personality, maybe the trustee will abandon it as having no value.
Best answer may depend upon the sale value of the business. (and who is in bankruptcy, you, corp, or corp and you.)
Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.
Your Landlord will only want you out if you have not paid your rent. If you listed your landlord in your bankruptcy your person guarantee under your current lease ends with your discharge.
However, of you sign a new lease you will be back on the hook.
Some vendors will work with you on a cash basis. As to whom you pay. That is entirely up to you. I would suggest paying the vendors that you need in order to stay in business.
I hope this information helps you.
Jonathan Leventhal, esq.
Leventhal Law Group, P.C.