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Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

I'm Bankrupt But My Business Is Doing Well...

Posted By admin || 19-Nov-2008

A common question amongst debtors filing for bankruptcy is, "can a bankruptcy trustee take my business if I file a Chapter 7 bankruptcy ?" Well the answer is, yes the bankruptcy trustee can take your business..."well maybe." Many business owners go through the trouble of incorporating their business because they want to protect themselves from liability if something goes wrong with the business. But what happens when a business owner files for personal bankruptcy? Well, it all depends on the debtor's stake in the company.

Is the debtor a shareholder? If so, the bankruptcy trustee can liquidate the debtor's share of the company during a bankruptcy court if it is not exempt. This is especially true if the debtor is the sole shareholder. You see, although the bankrupt debtor does not own any assets in an incorporated business, he/she does own the stock. Any stock the bankrupt debtor owns becomes part of the bankruptcy estate. So, if a debtor filing for bankruptcy owns 100% of the stock in a company, then the bankruptcy trustee owns 100% of the shares thus 100% of the assets of the company and as the owner can liquidate all of the company's assets in bankruptcy to repay creditors. What this means is that the bankruptcy trustee can sell the company's computers, technology, furniture, etc.

Categories: Bankruptcy
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