How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Roger Your Own Question
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31687
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
Type Your Bankruptcy Law Question Here...
Roger is online now
A new question is answered every 9 seconds

i filed chapter 13 about a year ago. i am currently thinking

This answer was rated:

i filed chapter 13 about a year ago. i am currently thinking of bringing on a partner in my business. is this still possible, and what would i need to know in terms of legal limitations??
thank you

Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question.

Because your business is an asset, you would have to get permission from the bankruptcy court to add a partner/sell an interest in your business because that's an asset of your bankruptcy estate. The trustee could likely have a claim to the proceeds from selling an interest in the business. At the very least, the trustee would have an interest because the addition of a partner will affect the business ownership and the trustee's collateral.

Thus, you'll need to file a motion for permission to add a partner and find out what the trustee wants to do in terms of accounting for the interest, the money received, etc.

There shouldn't be much opposition from the trustee or your creditors IF you're receiving reasonable value for the interest AND if this is going to make your plan more viable than it already is. However, you still have to get permission.

Customer: replied 4 years ago.

thank you for your response... so would that mean i'd have to possibly give the trustee a portion of the interest paid from my new partner?

Yes, it is possible because your business is an asset or property of your bankruptcy estate, and if you're selling a part of your estate, then the trustee is going to be looking for his/her cut. Generally, you can negotiate the fee based on your need for the money and the affect this may have on your creditors.

The trustee would be collecting for unsecured creditors, so the fee should not be great, but you would still have to file the motion and go through the process and get court approval in order to make the sale of an interest in your company legitimate.
Roger and 2 other Bankruptcy Law Specialists are ready to help you
Hi -

Please let me now if you have any additional questions. Thanks.

Related Bankruptcy Law Questions