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My husbank and I own a small cafe in California valued at…

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My husbank and I own...
My husbank and I own a small cafe in California valued at $40,000 that has been open one year. Neither of us have been able to take a draw or recieve a paycheck yet. I have $80,000 in unsecured debt that I am going to file chapter 7 bankruptcy on and less than $10,000 in personal assets. I understand that the court will probably make me close the business once I file, but that my attorney would be able to file a motion or suit to pull the business out of the bankruptcy so that we could continue to work. How easily is this done and how long is the business usually required to be closed? Should I be worried that it may not be able to be pulled out and reopened at all?
Submitted: 8 years ago.Category: Bankruptcy Law
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Answered in 11 minutes by:
3/14/2009
Bankruptcy Lawyer: Phillips Esq., Attorney-at-Law replied 8 years ago
Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
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Is your business incorporated?
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Customer reply replied 8 years ago
No, it is a sole proprietorship
Bankruptcy Lawyer: Phillips Esq., Attorney-at-Law replied 8 years ago

Thanks for the quick response.

I am not too sure that your "attorney would be able to file a motion to pull your business out of the bankruptcy." When you are filing under a Chapter 7, you are asking the Court to relieve you of all your debts and to liquidate all property that is not exempt to pay your creditors. When you are a Sole Proprietor you and your business are one and the same. If you are insolvent your business is also insolvent. Your creditors will not lend to you and they will be looking for the liquidation of your inventory and equipment for satisfaction of their debts.

You could save yourself all this trouble by incorporating the business before you file, then the business will be separate and apart from you, a legal entity. Then, you can explore the possibility of filing for bankruptcy protection.

Hope this helps.

Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
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