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Chapter 13 and sole proprietorship

Discussion in 'Bankruptcy Law' started by coximus, Jun 2, 2020.

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  1. coximus

    coximus Law Topic Starter New Member

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    Jurisdiction:
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    Hello

    I want to file an individual Chapter 13 petition. There is a question there:

    12. Are you a sole proprietor of any full- or part-time business?

    I'm. Can I mark answer NO? I want to file Chapter 13 against my personal credit card and taxes. The sole proprietorship is doing fine. Is this legally possible?

    Thank You
     
  2. Zigner

    Zigner Well-Known Member

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    If you're a sole proprietor, then the business is you.
     
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  3. PayrollHRGuy

    PayrollHRGuy Well-Known Member

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    Can you? Sure, but it at the bottom of the form it says this...

    I have examined this petition, and I declare under penalty of perjury that the information provided is true and correct.

    If I have chosen to file under Chapter 7, I am aware that I may proceed, if eligible, under Chapter 7, 11,12, or 13 of title 11, United States Code. I understand the relief available under each chapter, and I choose to proceed under Chapter 7.

    If no attorney represents me and I did not pay or agree to pay someone who is not an attorney to help me fill out this document, I have obtained and read the notice required by 11 U.S.C. § 342(b).

    I request relief in accordance with the chapter of title 11, United States Code, specified in this petition.

    I understand making a false statement, concealing property, or obtaining money or property by fraud in connection with a bankruptcy case can result in fines up to $250,000, or imprisonment for up to 20 years, or both.
    18 U.S.C. §§ 152, 1341, 1519, and 3571.

    And there is no doubt that you would be making a "False Statement".
     
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  4. zddoodah

    zddoodah Well-Known Member

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    Can you? We have no reason to believe you lack the ability to do so.

    Apparently, however, you cannot do so truthfully, and lying on your bankruptcy petition would be a phenomenally bad idea.

    Your sole proprietorship has no separate legal existence. A sole proprietorship is simply a means by which an individual conducts business either in his/her own name or using a fictitious business name. If you wanted your business to have a separate legal existence, you would have needed to set it up as a corporation or LLC.
     
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  5. Tax Counsel

    Tax Counsel Well-Known Member

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    Your post suggests you do have a sole proprietorship. The question asks if you are a sole proprietor of any business. That being the case, you cannot truthfully answer no to that question. And lying on the petition can, in addition exposing you to charges for perjury, get your bankruptcy petition chucked out and any discharge denied. Given that the fact that you are a sole proprietor will almost certainly be revealed during the course of the bankruptcy it would be, as zzddoodah says, a very bad idea to lie about it on your petition. Note that the bankruptcy need not have an adverse impact on the business if your Chapter 13 plan is approved. I suggest consulting a bankruptcy attorney. You risk making errors that could screw things up for you if you go it alone.
     
  6. coximus

    coximus Law Topic Starter New Member

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    Thank you all very much for the answers.
     

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