Can You File Personal Bankruptcy and Keep Business Assets

[cdef1960]

My question involves bankruptcy in the state of: RI

I started a business as a single-member LLC in 2006. I had my LLC status revoked in 2008 for back tax debt to the state.

Am I considered a sole proprietor since the 2008 LLC revocation and, if so, am I eligible to file a personal Chapter 13 and keep the business assets?

[despritfreya]

Yes. . . In a Chapter 13 you can operate your business to fund your Plan. The non-exempt value of the business is just something you have to account for in formulating the Plan. Take the time to consult with numerous bk attnys as most give free consultations.

Des.

[cdef1960]

Yes. . . In a Chapter 13 you can operate your business to fund your Plan. The non-exempt value of the business is just something you have to account for in formulating the Plan. Take the time to consult with numerous bk attnys as most give free consultations.

Des.

What if the business is not operating in the black? It is the reason I must file, but can't afford a chapter 11 (it's a tiny business but I employ 10 people.) I am the single member of the LLC whose status has been revoked. I had some free consults but the 2 I spoke with seemed like it would not be possible for me to file Chap 13 and keep the biz since it was originally established as an LLC, even though it's LLC status was revoked in 2008.

[despritfreya]

What if the business is not operating in the black?

If the business (any business for that matter) is losing $$ it probably needs to be shut down and its owner needs to go out and find employment with steady income.

I had some free consults but the 2 I spoke with seemed like it would not be possible for me to file Chap 13 and keep the biz since it was originally established as an LLC, even though it's LLC status was revoked in 2008.

The attnys probably did not indicate that you cannot keep the LLC and file a 13. Such is done all the time (regardless of whether or not the business is an Inc., LLC or sole proprietorship). What they probably said is that if you cannot produce positive cash flow (for yourself), you do not qualify for a 13 as you will not be able to fund the Plan. In this regard both would be correct. You have to have "regular income" to file a 13 and if your only source of income (the business) is losing $$ you, presumably, do not have the ability to take regular draws or paychecks.

Des.