Can I still keep my business open if I file bankruptcy?
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Can I still keep my business open if I file bankruptcy?
I am a sole owner of a business and I am considering bankruptcy. My wife and I would declare personal and I for my business as well.
Asked on July 7, 2011 under Bankruptcy Law, California
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
Is this business just a dba of yours, or is it a corporation? If the latter, for sure you can keep it operating. If the former, it depends on a number of factors, including what the Trustees in your jurisdiction allow and what chapter of bankruptcy you file. In a Chapter 13, you for sure can continue operating a sole proprietorship. In a Chapter 7 you usually can, but you need an experienced attorney to analyze your situation fully to make sure. You would need to list all the receivables and assets of the business (there really is no separateness of the business and yourself personally in a sole proprietorship anyway) and hopefully exempt them. There may be other intangible assets of the business that need to be valued and exempted such as goodwill, your phone number, client lists, etc.
In most cases where it's simply personal services, there's no problem continuing a self-employed business in a Chapter 7 case, but if you're operating an ongoing business (like a restaurant or something), then it would have to close in a Chapter 7 case.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
Follow Me on Twitter: @bklawr
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
Is this business just a dba of yours, or is it a corporation? If the latter, for sure you can keep it operating. If the former, it depends on a number of factors, including what the Trustees in your jurisdiction allow and what chapter of bankruptcy you file. In a Chapter 13, you for sure can continue operating a sole proprietorship. In a Chapter 7 you usually can, but you need an experienced attorney to analyze your situation fully to make sure. You would need to list all the receivables and assets of the business (there really is no separateness of the business and yourself personally in a sole proprietorship anyway) and hopefully exempt them. There may be other intangible assets of the business that need to be valued and exempted such as goodwill, your phone number, client lists, etc.
In most cases where it's simply personal services, there's no problem continuing a self-employed business in a Chapter 7 case, but if you're operating an ongoing business (like a restaurant or something), then it would have to close in a Chapter 7 case.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
Follow Me on Twitter: @bklawr
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