I am filing personal bankruptcy and own a small business...
Coconut Creek, FL |
I understand the personal exemption limitations but am wondering how owning a small business will affect the petition. Is there a chance that I could lose my business by being ordered to sell or liquidate it?
The stock is personal property and the stock value will reflect the value of the business. If thebusiness has no A/R or inventory or equipment then there is no real issue. Depends on the value of the company.
Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.
The business is just another asset that is either exempt or not. If you own the business as a separate entity, such as a corporation, llc, etc, the value is what it might sell for. If you own the business as a sole proprietorship, you can consider whether each individual asset of the business is eligible for an exemption.
Any asset that isn't exempt, may be seized by the Trustee and sold at auction. So be sure you hire an attorney experienced with business bankruptcy cases. Your concern is real!
Most trustees are not going to want to liquidate your business even if the "asset" cannot be fully covered with exemptions.
Almost all trustees would work out a buy back agreement, if needed.
It has been my experience that most businesses have no value. That is not to say it is not valuable to you (generates income). It just means that the business usually has debt beyond its assets. If that is the case, the business is listed on the bankruptcy petition as value unknown, or $0.
In general, your business only represents an asset in your individual bankruptcy case if the assets of the business could be liquidated to pay all business creditors leaving surplus money. You should discuss the value/debt issues with your bankruptcy attorney, who can give a more detailed answer to your question.