Chapter 13 for Individuals Who Own a Business

[spearmint]

What happens to income from the business when the owner files a personal Chapter 13?

[justbroke]

This depends on what the business organization is. If it's a self-contained entity (Corporation) then it could continue without interruption. However, your ownership interest could be subject to Trustee review. In other words, if the corporation pays you money, the Trustee would be interested. The Trustee could also be interested in the value of the shares that you own... for a liquidation analysis.

If it's a sole proprietorship, then the Trustee will want it to be in the black and be income producing (or at least with no negative cash flow). Otherwise, you may not be able to keep it.

[Granny]

We had a corp when we filed and the trustee didn't look at anything except our paystubs from the corp. I included a note that I had personally guaranteed for the corp and that didn't raise any flags either.

I also had a sole prop. and they wanted six months income and wanted to know what the monthly expenses were. That was it.