Selling Non-Exempt Assets - before and after

[rcoveles]

From what I've been told and from what I read here in various threads - it is perfectly OK to sell some non-exempt assets before filing CH13, as long as you keep track of what you sell etc. I'll probably be selling off some stuff over the coming weeks to fill our oil tanks, a few repairs, lawyer's fee, get some essentials for the house etc.

What about selling non-exempts AFTER filing? Is this allowed? Since I'll be keeping the inventory of my business, and continuing operations, and since that inventory is non-exempt, I'm assuming it is OK? I'm more wondering about selling other non-exempts, outside of my inventory, that I claimed pre-13. Since I'm continuing my business, I'll need to replenish inventory on occasion.

I'm thinking this should be an allowable (within reason) expense of doing business, but if the funds aren't there in the early going, I'd be willing to part with some things to fund inventory purchases and keep the business headed in the right direction.

Anyone have any thoughts or experience with this?

[BKDefender]

rcoveles,
You should take a look at 11 USC 1304 which addresses your exact situation.

You cannot sell non-exempt assets AFTER filing bankruptcy without your trustee's approval, unless it is in the ordinary course of business. If you have a business and you're operating the business, and the business sells inventory, as long as the business is profitable then it is in yours and the trustee's best interest to keep the business operating and selling inventory as usual. Make sure, though, that you don't sell the inventory, put the money in your personal account, then close the business. i.e. don't convert non-exempt assets of the business to your personal property.

--William

[rcoveles]

rcoveles,
You should take a look at 11 USC 1304 which addresses your exact situation.

You cannot sell non-exempt assets AFTER filing bankruptcy without your trustee's approval, unless it is in the ordinary course of business. If you have a business and you're operating the business, and the business sells inventory, as long as the business is profitable then it is in yours and the trustee's best interest to keep the business operating and selling inventory as usual. Make sure, though, that you don't sell the inventory, put the money in your personal account, then close the business. i.e. don't convert non-exempt assets of the business to your personal property.

--William

Thanks William - that makes sense. I have no intentions of closing, but the money (profits) made, WILL be going to my personal account in the form of my draw/salary in the big picture, but I guess that is allowed. I guess it also depends on how flexible your trustee is. If business were slow, and I wanted to sell off a few things to finance inventory, or even pay bills, I think a reasonable trustee would probably allow it...I hope.