Your situation is complicated and you need an attorney to help. I personally do not feel comfortable advising you whether you have satisfied the liquidation analysis by the information you have provided. Use the Find A Lawyer tab on this website to locate a reputable bankruptcy attorney in your area. There are many.
The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.
The note that is owed to you for the sale of your business certainly is an asset that would affect how much you may have to pay creditors in a Chapter 13 depending on whether you have an exemption available to you to protect this asset or not. As California has two different exemption programs, California exemptions are far more tricky than the exemption in the other states. If you meet with a local bankruptcy attorney, you may be surprised that there can be some strategies that can be used to plan for any bumps in the road. Hope this perspective helps!
You have a note for $67,200 (or the balance as of the day you file). That note is an asset that is property of the estate -- it is not future earned income. How that affects your case is something to review with a lawyer. To live without that income, if you have to pay a large percentage to the plan (likely), you might consider a job.
If you are doing a chapter 13, you absolutely need to be represented by counsel who can do a liquidation analysis and come up with a plan that will work for you. FYI, the failure rate of chapter 13 bankruptcies by unrepresented debtors in the Central District of California is well over 90%. Don't be penny wise and pound foolish.
Attorney Larkin's response is actually sound advice in that you do need to sit down with a seasoned bankruptcy practitioner to really come up with a good plan of attack on this one, especially if there are any alternatives to a Chapter 13 that might work better. You may try and compromise some of the debts by paying less than what's owed and eliminate a number of creditors that way. Or try some other tactics which could yield better results.
I do have some issues. For instance is this stock certificates that you sold as in a corporation's stock, or was this a sole proprietorship? Was it an LLC? Those may be interesting questions to be answered before you can fund your Ch. 13 plan.
I'm going to tell you, however, why I think you need more planning than just looking at all of your exemptions.
Start with the basics. In a Chapter 13, you are in essence the debtor in possession. There is a Chapter 13 trustee whom you will be making plan payments to for up to 60 months. The Chapter 13 trustee's job is to collect and disburse the money to your creditors according to the Ch. 13 plan that will be proposed and either confirmed, confirmed after a cramdown hearing, or rejected and overruled if the judge senses that this is an abuse.
Ninety nine percent of Chapter 13 plans are usually pro forma. But they involve people who are regular wage-earners. That means you are employed by an employer or you are self-employed with a proven track record of consistent income.
What you're proposing to do is fund your Chapter 13 plan using the proceeds of the sale of your business.
Your 67,200 over the next 57 months represents not earned income, but sale proceeds. And how you characterize this income in your schedules and plan will likely determine the outcome of whether your plan will be approved.
A liquidating Chapter 13 plan may be approved when proposed the right way, and your petition and schedules are structured properly. So long as you do not have any "angry" creditors who might sniff around, you'll be okay.
Now there's another twist in this. If you get another job or start earning income in addition to the liquidating payments you are receiving, then you will have to amend your schedules and plan anyway.
Not last and not least is the other issue. Your Chapter 13 plan has to propose payments that would be the same or greater over time, than if you were to liquidate under a Chapter 7. So that $67,200.00 would pretty much all have to go to the plan payments. Otherwise the US Trustee could intervene and argue forcefully that by paying less than the liquidation value to the creditors in the Ch. 13, the plan is not being proposed in good faith.
Again, a seasoned professional will be able to structure this for you.
Finally to answer your question, I do not see your sales proceeds or liquidation payments as being exempt. You are required to pay 90 percent of your disposable income to the Trustee, but this is not disposable income so its vulnerable to attack by the US Trustee, possibly the Ch. 13 trustee and the creditors.
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In addition to the other answers which I will not repeat that information, when you meet with an attorney as we all advise you to, the other issues are : (1) is there any reason why not delay filing so the value of your asset goes down and you have money on hand to live with. Can you file 2 years from now? any urgency? (2) Can you sell your note to someone else (which would incur a discount I am sure of probably too much ..50%?? and use the proceeds now to live on is some fashion that is possibly protected or more of it protected? The later one involves risks an experienced bankruptcy attorney will advise you on . We do NOT know why you want to file a chapter 13 and many persons who come to my office stating they want to file a chapter 13 end up filing a chapter 7 when they learn they had misconceptions of why they wanted to file a chapter 13. You might amend your schedules to indicate if you had a prior bankruptcy and if so when was it filed and which chapter, or if you are trying to save a home, or a lot of traffic infractions or prior divorce debt. Good luck. But seek an experienced bankruptcy attorney to carefully go through your options.
You mentioned you are considering a chapter 13 because you have property you want to keep. Is any of your property real property (real estate) in foreclosure? Is any of the property personal property such as a vehicle that will be repossessed if you don't file for bankruptcy protection? The reason I ask is that I agree with attorney Granvold that the timing of filing your case could be the easiest solution. I would be happy to go over the information with you. The consult is free.