Can the bankruptcy trustee take my franchise?

In a bankruptcy, all your assets get disclosed, including your interest in this franchise. If the bankruptcy trustee thinks that your franchise has value, they may require you to sell it to pay off your creditors. If you want to continue in business with this profitable franchise, you may be better of in a Chapter 11 bankrupcty, with a payment plan to reduce your obligations.

Filing a bankruptcy petition is a serious decision that has long term effects on your credit, so you're best off consulting a bankruptcy lawyer to go over all your assets and liabilities to help you make the right decision.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

If it is an asset and that asset can't be protected by the exemption schedule (i.e. the real value is 20,000 and you have no home and can use the wildcard exemption to protect it), then you can file and keep the business.

However, it is not protected an exemption (the rules covering what you get to keep), then you could very well lose it.

The key is its value and what else you own. A good attorney can help you determine if you can keep it.

Good luck with your situation.

Matthew Williamson
www.montereybaybankruptcy.com