Personal Bankruptcy Sale of store stock post chpt. 7

[nomorebiz]

Hi All.
I'm new here, and hope that someone out there might have an answer for me. I filed chapter 7 on my small business (which had inadvertently gotten linked to my personal finance) back in November 2009. The case was discharged in January 2010.

I sold all of my equipment and what stock and materials I had on hand before filing- I ran clearance sales at my store. I am in the process of cleaning out a storage area and recently found some left over stock.

My question is this...is it okay to sell this product now, if even through Ebay or a garage sale? Or, will it be traced to me and somehow effect the bankruptcy? My husband is totally freaked out by me wanting to sell it- it is only a few hundred dollars worth.

Any information would be greatly appreciated!! Thanks in advance.
T.

 

[despritfreya]

Ok you have not given enough facts.

1. Who filed bk and got a discharge? Must have been you personally since a corporation or LLC does not get a discharge.

2. Who owns the assets you wish to sell, you or the corporation/LLC?

3. If the debtor (which ever one of you filed the bk) owns the assets were the assets disclosed in Schedule B so that the Trustee knew about them?

4. If the assets belonged to the debtor and were disclosed, has the Trustee CLOSED the case? (A discharge does not end the administration of the case - assets are not "abandoned" until the case is closed or the Trustee files a Notice of Abandonment.)

I will assume that you filed bk and that you own the assets. I will further assume that these assets were not disclosed or, if disclosed, the Trustee has not abandoned them. If all of my assumptions are correct you cannot sell the assets as they do not belong to you. They belong to the Trustee and you need to contact him.

If you filed bk and your business (corporation/LLC) did not AND the assets belong to the business you should wait to sell them until such time as the Trustee abandons his interest in the corporation or LLC. Has he closed the case? If so there has been an abandonment of the business.

If the business (corporation/LLC) has filed bk and the Trustee knew about the assets AND has closed the administration of the case then you are free to do with the assets as you please.

There are too many variables and not enough information to give you a definitive answer.

 

[nomorebiz]

More information on Chp. 7

Okay, sorry for the incomplete nature of the first post.
My business was an LLC in NY. I was sole member at 100%.
The file was discharged, not sure if this means completely? Have not received anything additional after that (Jan. 2010).

I was unaware of this stock at the time of the BK. I was in a hurry to get the store emptied and its contents sold before it began to cost me even more in rent and utilities.

So, these items were not revealed at the time of discharge.
The only things that I bk'ed on were lines of credit for the business, that until the time of the bk I thought were not linked to my SS#, but to my surprise they had been. So I ended up filing personally to relieve these creditors. I did not file on anything on my own "personal" debt.

If there is more information needed...please let me know.

 

[despritfreya]

Ok, still not positive of the facts but, who filed bk - you or the LLC? I will assume it was you, not the LLC. I will also assume you filed pro se (w/out an attny).

First issue is that when you filed you needed to list ALL of your debt, regardless of what type of debt it was. This included car loans, mortgages, credit cards, medical bills, student loans, personal loans, LLC debt that you personally guaranteed, taxes, and anything else you could think of.

You also needed to list all of your assets which included the membership in the LLC. I will assume the Trustee was aware of the LLC and did his due diligence in investigating whether or not it had any value, which would have included all of the assets of the LLC and all of the debt of the LLC. Generally a business entity has no value if its debts exceed the value of its assets. Generally, once a Trustee knows this he will walk away from the membership since he can't sell something that has no value. If the membership interest was disclosed you should call the Clerk of the Court to find out if your case has been "closed". If it has been "closed" then the Trustee has abandoned the LLC and you can do what you want. If it has not been "closed" call the Trustee and get his permission to sell the remaining stock.

If the LLC filed bk you need to contact the Trustee for the LLC and let him know you found some additional stock. Let him decide what to do with it. He may tell you to keep it or he may want to sell it for the benefit of the LLC creditors. You need to confirm with the Trustee even if the case has been "closed" since this is remaining stock that he did not know about.

Hope this helps.

 

[nomorebiz]

Thank you for your reply.
The bk was filed by me (with an attorney) and it dissolved the debt from the LLC which were guranteed by me. I reaffirmed my household debts like uitility and a small loan, credit card through my credit union to keep that relationship open. Our house and the car are in my husband's name.

I will check with the court clerk to see what has happened with regard to whether or not the file is "closed" and if so get rid of the stock for good.

Thanks again- T.

 

[esterlydsl]

You have discovered the left out things in your storage area after filing bankruptcy. You have not hidden those assets, and neither did you have any intentions of doing it. Now, you can disclose this fact to your trustee. I don't feel it is going to cast a bad effect on your reputation, if you are showing your sincerity.