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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2891
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I own a small business for 29 years in Brooklyn, NY. The last

Customer Question

I own a small business for 29 years in Brooklyn, NY. The last few years I have been losing money. I owe $165,000.00 in bank loans that I have signed a personel guarantee's for. My accounts recievable would omly cover 15% of it. Too many clients have gone under while owing me.
The banks do not know that I own co-op apartment. It might be worth about $225,ooo.oo, (If someone would buy it in this market.) If I declare bankrutcy, would I lose my home? Would I retain any part of it?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
Since you have personal guarantees, if the business closes, or the creditor sues, they can pursue your assets. If you chose to file a personal bankruptcy, you can discharge any of the personal guarantees. In NY, you can exempt the following for your homestead exemption in excess of the mortgages.
  • Homestead (equity in dwelling used as residence)
    • Up to $10,000 in value (Double if married)
    Therefore, if your co-op is paid in full, you may be looking at chapter 13 to repay the debt over the next 3-5 years.
Customer: replied 7 years ago.
If I add my daughter as co-owner, ( She is an adult) will that protect my co-op?
Expert:  Terry L. replied 7 years ago.
Unfortunately no. That would be considered a transfer of an asset, that the court could set asside for 2 years before a bankruptcy, unless you receive fair value in return, then spend that down on necessities. So, that won't work to help protect the equity and file chapter 7. Chapter 13 debt repayment or else just negotiating with the lender seem to be your best options.
Customer: replied 7 years ago.

If I go with a chapter 13, how do they calcuate the payments, personel or business income?

Expert:  Terry L. replied 7 years ago.
Chapter 13 payments are based on 2 things, 1. disposable monthly income as calculated with the last 6 months of income, and 2. asset protection (paying enough to protect unexempt equity in assets, such as the co-op)