Question How to deal ebay inventory for filling chapter 7

[travel1000]

I earn my income to sell used car lamps on ebay. I sell on ebay on my own name. I purchase used lamps from junkyard. I prepare to fill out B106A/B as business inventory under business property. My inventory estimates 30 pcs with purchased price $25 per pcs. The total purchased price is $750. Is using purchased price $750 acceptable? The only possible exempt property in B106C is wild card classification. From reading original text in law, I believe the wild card is refer personal property. I can assume business inventory cannot classify as wild card. is my guess correct? Can I continue to sell this inventory on ebay after filing chapter 7 if keep my same inventory value with purchasing additional inventory? This way, I have same value of inventory if trustee decide to liquidate it. Otherwise, I will have difficult to get income after filling.

[justbroke]

First, you would use either fair market value (FMV) or liquidation value depending on how your local district deals with valuation of property.

For your second question, business property is "business personal property." The inventory is likely property of the bankruptcy estate so you can't keep selling after the day you file. I agree with you that it is likely not protected under any "personal property" exemption. If the "lamps" were tools of the trade, then you could probably get them in. But, because you are a sole proprietor, that inventory appears to be just that... inventory.

You need a good bankruptcy attorney that can help guide you. Your issue is that you are a sole proprietor. You may be able to start a new business with a different type of organization but that is advice that I cannot provide.

[travel1000]

Thanks. If I claim ebay inventory as personal wild card property exemption, May I continue to sell on ebay on my believing that is exempt property. of course, my believing might be wrong, trustee might ask back inventory which I have maintain by adding new stocks. in this case, will trustee pose additional sanction beside ask inventory back. I do not worry the inventory because low purchased price. continuing to sell is more important. if I value inventory as purchase price, will trustee pose additional sanction or just revalue it?

[justbroke]

I can't tell you that. Only an Indiana attorney could tell you whether inventory is "personal property" under Indiana bankruptcy law. Now whether you can continue your business is a different story.

I highly suggest obtaining 3 to 5 free bankruptcy consultations with Indiana bankruptcy attorneys and express your concern. You want to keep running your business but are worried about inventory levels and the impact of Indiana bankruptcy exemptions on that.

I can't tell you to plead ignorance (by asking for "forgiveness" after the fact).

[travel1000]

delete

[travel1000]

delete

[travel1000]

Sole proprietorship. You're operating a sole proprietorship if your business is not a partnership or incorporated. For example, if you're a carpenter, you might operate as "Elaine Watson, doing business as Watson's Cabinet Shop." As a sole proprietor, you own the equipment you use in the business, the inventory, the accounts receivable, and all other assets. In Chapter 7, there's no difference between business and personal assets and debts of a sole proprietor. They're all treated as yours.

I find nolo article above.
justbroke please comment.

[justbroke]

You need an Indiana attorney to answer the question. An exemption, such as "personal property exemption" may not be the sames as a "business property exemption." The distinction probably matters even if you are a sole proprietor. Think of it as some things are exempt and some things are not exempt. The bankruptcy code protects the debtor and not so much the business in a Chapter 7.

Yes, a sole proprietorship is just the alter ego of the business owner. However, exemptions are different. An exemption will define how it applies. You may own the business equipment, but there's a difference between business equipment and tools of the trade. Another example is that the bankruptcy code was intended to keep your personal property such as clothing, furniture, books, food, electronics and other things that are clearly "personal" property. Whether or not Indiana considers "business inventory" as personal property--for a sole proprietor--requires someone to look at Indiana law.

For example, while some may consider computers, furniture, and tools "business personal property" they will not consider "inventory" to be either personal or business personal property.

I highly suggest you not use the Internet to define whether business personal property is exempt as "personal property" under Indiana bankruptcy law. I highly suggest obtaining three to five free consultations and ask a licensed Indiana bankruptcy attorney.

I just can't answer your question because it depends on whether "inventory" is "business personal property" and if such is also included in the exemption for "personal" property.

[travel1000]

thanks. after comparing reading other state law and fed law, I think indiana law does not include business property as exemption. in some state, there is business section such as tool of trade. in fed code, there is wild card refer any asset. for valuation, i think different person has different idea. I just put purchase price, let trustee decide how much is worth because it is non exempt anyway. For continuing business after filling, I just take one week break and purchasing new inventory and keep old inventory un touch . I think this way ?I do not violate any rule.