Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy and Consumer Protection attorney here to assist you.
You are allowed to engage in 'pre-Bankruptcy planning' - which includes converting non-exempt assets into exempt assets.
So there would be no problem purchasing tools of the trade with non-exempt assets.
However, you would not be allowed to use the Tools of Trade exemption for your truck - for which you would be allowed to use only the $5,000 motor vehicle exemption.
Purchasing tools of the trade for a new career is also ok as opposed to my previous career? What burden of proof is required for a new career?
There is no requirement that the business be in existence for any length of time.
The burden of proof would be minimal.
Any evidence to show the BBQ is being used to make money (instead of for personal use) would be sufficient.
Are you planning on forming a business (sole proprietorship, LLC, corporation, etc.)?
Yes, eventually. Initially, I will be competing on the professional BBQ circuit for cash prizes.
Any concerns or do I need to form a LLC first?
Competing for prizes does not sound like a business.
It would be better if an LLC was formed before a Bankruptcy was filed.
Competing for prizes - alone - would not be considered to be a business. If you sold food to the public, in addition to competing, that would be a legitimate business.
It would be better if an LLC was formed before a Bankruptcy is filed.