Asset vs. Non Asset

[BrokeInCali]

I'm a little confused on one topic.

What constitutes a bankruptcy being an Asset case vs a Non-Asset case?

[debee]

Whether there is anything to distribute to the creditors.

[BrokeInCali]

So you wouldn't really know if your case was asset or no asset until after the 341, huh?

I have an s-corp with about $2,500 worth of equipment/tools (vs $70,000 of debt) If the trustee want's the equipment that would make it an asset case and if he abandoned it the case would be no asset? (all of my personal property falls under exemptions and I don't own a house)

Just want to make sure I understand correctly!

[debee]

Yes. After the 341. You'll be looking for the report of no distribution on PACER. That will indicate he has abandoned your assets. Also, if your case changes from "Asset:No" to "Asset:Yes" it will further indicate that you have become an asset case.

I don't know a thing about s-corps so my comments assume that the trustee's reports and how they appear will be the same as for a standard chapter 7 consumer. Someone will come along and correct me if I'm wrong.

[frogger]

I have an s-corp with about $2,500 worth of equipment/tools

You're an asset case........

[BrokeInCali]

You're an asset case........

Okay..

So from my research if I am an asset case the following could happen:

1) The trustee could take the equipment (boy that would be a pain! It's really heavy stuff)
2) The trustee could abandon the equipment (if that happens it just comes back to me, right?)
3) The trustee could offer me the opportunity to purchase the equipment back from him (Is this something that the trustee offers, or is it something that I have to offer the trustee)

[BrokeInCali]

Just bumping this up to see if anyone has any insight on my last post (the one above )

[frogger]

Okay..

So from my research if I am an asset case the following could happen:

1) The trustee could take the equipment (boy that would be a pain! It's really heavy stuff)
2) The trustee could abandon the equipment (if that happens it just comes back to me, right?)
3) The trustee could offer me the opportunity to purchase the equipment back from him (Is this something that the trustee offers, or is it something that I have to offer the trustee)

1. Yes
2. Yes
3. Yes

With that being said however, the trustee does not want your stuff. They want the $$$$$ in order to make their commission and pay the creditors if anything is left after all of their expenses.

At some point, if you and the trustee have not come to any arrangements on the equipment, you will get a document stating to turn over the assets to the trustee. This will be another opportunity to bargain with the trustee.

It's not uncommon for a trustee to give the filer a payment plan for a few months (with no interest), but if the value is this low, be ready to pay if you want to keep your stuff.

Make the trustee an offer...... (and lowball it!)

[murphsmom]

Now I'm confused, I thought if your assets were exemptable, then there is nothing for them to distribute, and wouldn't it then be a no asset case?

[frogger]

Now I'm confused, I thought if your assets were exemptable, then there is nothing for them to distribute, and wouldn't it then be a no asset case?

The OP has a LLC that contains assets. Any and all assets that belong to the corporation have no exemption protection. The corporation is a part of the bk estate.

[BrokeInCali]

I was looking over my schedules (They haven't been filed yet, I will be filing next week) and noticed the following:

Schedule B
Line 13 - Stock & interests in incorporated and unincoporated businesses - The lawyer has a description of my corp along with $2,500 under "current value"

Schedule C
Stocks & interests in Business - Same description and has the following listed:
CCP 703.140(b)(6) $2,000 (This is the tolls & Equipment)
CCP 703.140(b)(5) $500 (This is some misc. supplies)

So my attorney is attempting to exempt $2,000 under "Tools of the Trade" (CCP 703.140(b)(6)) & $500 under "Wildcard" 703.140(b)(5)

Anyone know if this will fly or have experience in attempting to exempt corporate tools of the trade?

[frogger]

You can't exempt what is not yours. The tools and supplies belong to the corporation, not you. You just own the corporate stock.

With the value so low, the trustee might not fuss, but don't count on it.