What are the chances of a successful bankruptcy, without hurting my parents.

[JoeSeattle]

Quick history: My father owned a small restaurant for 15 years. In 2004, he basically transferred the business to me, provided that I pay $2000/rent. The business wasn't very profitable. Between 2004-2008, it's gross sales averaged about 140K/year, $10K net.

The business tanked in 2008, with sales of only $100k and a $5500 net. I couldn't afford the monthly rent. My father took over the business in November 2008.

Since I wasn't able to pay my rent, my father took the business over. I didn't transfer it to him.

I have accumulated $45K in personal debt, $25K of which were for business related expenses, primarily food inventory. I haven't used the cards in 4 months. I have zero assets, not even a car. My wife is expecting in June as well and I have no health insurance.

I want to file bankruptcy without impacting my fathers business, which only has about $7000 in assets.

What should I expect during a chapter 7 bankruptcy proceeding? I'm really freaking out. I don't want my parents hurt by this.

[JRScott]

First off without health insurance I would not file until after your wife has her baby as you may need to bk on some of the medical expenses.

When your father gave you the business did he transfer it to your name?

If it is in your name then it is very likely that any bankruptcy will lead to its liquidation.

If however it is in his name then it should be fine so long as it has always been in his name.

[Flamingo]

Good points by JRScott. Depending on whose name the business is in at this point, your father may be hurt financially by taking over a dying business unless he finds some way to make a comeback with it. So many restaurants, large chains and small family-owned, have gone under with this economy. Your key here is how the business was transferred as JR Scott states.

As to your second question as to filing Chapter 7, educate yourself in this forum with the numerous Stickys in the Chapter 7 forum.

[brokenbuthealed]

You should check with a lawyer regarding exemptions. If the business only has $7k in assets, there may be a way to exempt it. Also, if the trustee does decide to take/liquidate it, you have the option of buying it back from the trustee.

[JoeSeattle]

First off without health insurance I would not file until after your wife has her baby as you may need to bk on some of the medical expenses.

When your father gave you the business did he transfer it to your name?

If it is in your name then it is very likely that any bankruptcy will lead to its liquidation.

If however it is in his name then it should be fine so long as it has always been in his name.

The business and property have been under my fathers name since 1990, however in 2004 he transferred the business to me. He took back the business in 2008 after I stopped paying rent. He plans on leasing out the property once the market rebounds.