There is no question that Bankruptcy is usually the best choice for someone who is struggling to pay their debts. The question that does remain is whether or not that person qualifies to file a Bankruptcy (this depends mainly on one's income), and what - if anything - that person would have to give up if he or she files.
In Ohio a Bankruptcy filer is able to keep a home with equity of $20,200 (plus about 5%), and a car with equity of $3,225 (plus the cost to sell the car).
What is the equity in the business property?
Does the business have a market value? (Could it continue to run if it was sold - without you to run it?) If so, what is the market value of the business?
I own 51% and my father owns 49%. Since my lay-off, my son and a longtime salesman (10 years) are running it, along with one other employee. Could the business run without me overseeing what goes on long term.....No, probably not. My dad has pretty much retired at this point and is gone alot. I have no idea what market value the business has: we have some inventory, but not near as much as a few years ago, lots of used stuff that's not ready for sale, so it's worthless right now, our building, which needs a new roof and our parking lot is shot. We bought the bldg for $325,000 several years ago, and borrowed about $45,000 for a bldg repair that we had to make last year. The guy we're buying the bldg from loaned us that money and we'll pay it back along with the loan. We have several years left to pay on the bldg loan, like 7-10, I think.....
Like I said before, we're having trouble paying the taxes this year, as our sales are approx 1/2 of what they were two years ago.
If you file a Bankruptcy, you would be able to keep your furniture, unless it is extraordinarily valuable.
If the business has no market value, you would also be able to keep that, and it would overall have no affect on the Bankruptcy. Additionally, since there is no equity in the building the business owns, that will also be unaffected.
If you are receiving unemployment, you would be eligible to file.
With a Bankruptcy filing, all assets of the debtor are taken into account, including the value of the debtor's share of a business. If your share of the business - including any value in the building the business owns, has a market value - if your share can be sold - that portion of the business (your share that can be sold) becomes part of the Bankruptcy estate, and the Bankruptcy trustee can sell your share if he thinks it worthwhile to do so. If your share cannot be sold - especially if you are needed to run the business - or can only be sold for a small amount, the Bankruptcy trustee will not be interested in your business.I can only provide legal information, not legal advice, so I cannot suggest to you what you should do, but if it were me, I would go ahead and file.
Call the Kentucky Bar Association for a recommendation for a Bankruptcy attorney, and don't be afraid to "shop around", because there is a large variation in what Bankruptcy attorneys charge, (I have seen them charge $800 - $3000 for the same service), and a higher price does not mean a better attorney. The number for the Bar is (502)(NNN) NNN-NNNNMost Bankruptcy attorneys will give a free or low-cost initial consultation. Go to a few to get a better idea of what is involved.
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