eBay Selling, Inventory, Paypal Credit -- and Bankruptcy

[daisyaday]

Hi all,

This is my first post here. I am very grateful to find this site. I am considering bankruptcy (Chapter 7). I've read about the process, but have a few questions specific to my situation:

I am a full-time eBay seller. My sales have gone down this past year, and I have not been able to keep up with cc debts. I understand about not transferring assets in a BK case - but wonder how this effects full-time eBay sellers who sell online for a living?

How do you declare eBay inventory as assets? Does this count as tools of the trade? Is it exempt? If I lose my inventory, I will lose my ability to generate income.

I have Paypal Credit and owe money there. If I declare BK, will Paypal Credit close my regular Paypal account? This is key, as I need my regular Paypal account in order to sell online.

Thank you in advance for any help and info!

[Flamingo]

There has been much discussion about Paypal, eBay, etc. over the years in this forum. Have you done a search yet for some past postings? Money in a Paypal account is considered an asset and will have to be disclosed - attorneys and trustees are all aware of paypal accounts so the best thing to do is ensure you go over this with an attorney as you may have to provide copies of several months of paypal statements, etc. as to your online business. Your regular Paypal account probably will not be closed as a result of any BK but you can bet your Paypal Credit account probably will be.

[daisyaday]

Thanks so much for writing back!

I understand about Paypal needing to be declared, and have no problem with closing the Paypal Smart Connect credit ... I just don't want to close my actual Paypal account.

I am also very concerned about the inventory/assets issue. I did a search but didn't find any posts related to that, so am hoping that someone out there has some info on that.

Again, thanks for writing!

[keepsmiling]

There has not been a huge amount of discussion about ebay selling/inventory.
It comes up once in a while but not usually as a real business.
What do you sell? is it new or used merchandise? Stuff you actually buy for resale? You are going to have to figure out how much this stuff is worth at fire sale prices. The tt is not going to photo it, write up individual listings, hold bidders' hands, answer emails, ship, etc.... it's going to be a giant garage sale if it gets liquidated at all.
Share that info and we'll go from there.

[daisyaday]

Thanks for writing back. I sell vintage items - books and collectibles. I do buy for resale (I buy cheap, and in bulk). I am not selling personal possessions on eBay. I have a store on eBay with over 2000 items stock. This is a full time business for me - it pays the bills. If my stock is liquidated, I will not have an income ... which is a HUGE problem. That is what I am trying to figure out before going further with Ch. 7.

Thanks again!

[keepsmiling]

Have you spoken to any attorneys yet?
Any idea what your exemptions might be?
What kind of income do you get from this monthly?
If you had to put all this stuff out in a giant garage sale tomorrow, how much might you get for it?

[daisyaday]

Hi,

I have not spoken to an attorney yet ... I am still trying to figure whether to file or not. I have read a couple of very basic books on bankruptcy, but they did not address anything like this question.

My income fluctuates monthly, unfortunately. :-( Vintage/antique is not nearly as strong an online market as it once was, in this economy.

Garage sale prices would depend on whether I priced at "estate sale" prices or just regular garage sale prices. Is that the key to pricing inventory for assets? It would be priced like a garage sale item, and not something vintage or antique? Would this go under tools of the trade, or as part of my household assets? I live frugally - normal household items, but would not want to lose personal items to keep inventory either.

[df04527]

Does your state have tools of the trade? Florida doesn't is why I ask.

[LadyInTheRed]

I have not spoken to an attorney yet ... I am still trying to figure whether to file or not.

Consultations with an attorney or two could help you decide whether to file. Most BK attorneys give free consultations.

I understand about not transferring assets in a BK case - but wonder how this effects full-time eBay sellers who sell online for a living?

As long as you sell things for market value, sales are not a problem before BK, unless the sales make your income too high to pass the means test or leave you with non-exempt cash.

Whether your inventory is exempt depends on your state's bankruptcy exemptions. You may get some help with that if you tell us what state you are in.

[keepsmiling]

Most attorneys do not charge for a visit. Start making some appointments tomorrow so you can start to think straight.
I have sold on ebay and have a pretty good idea what the market is like... S-L-O-W.....
My guess is it could be MONTHS or more before the right buyer comes along for your items.
That's why you should think about garage sale pricing. Do you have any truly rare and valuable items? 1st ed To Kill a Mockingbird? That's important.
I don't know if inventory counts as TOT. Anyone? Bueller?
If you give us more info- annual income, estimated value of inventory if you could get a good price, whether you own a home and other exemptions, we could probably help you more. Are you married and would your spouse file?
Could be you are collection proof. Maybe. We don't know enough yet to say.

[daisyaday]

Thanks! I looked up exemptions in my state and it includes: Implements, books, & tools of trade to $1,500. I am assuming that eBay inventory would be included in that?

Thank you again for your help.

BTW - how do you add an avatar photo here? I didn't see a help file with info.

[AngelinaCat]

Hi daisyaday:

Welcome to the forum.

To upload an avatar photo, click on your username, and you will see your profile. Go up to the dark blue bar near the top of your screen. You will see a list of options. from left to right: New Posts, Private Messages, FAQ, and several other things.

Click on 'Private Messages', and you will be taken to a screen that on the left hand side has a column of categories: 'My Messages'; 'My Subscriptions'; 'My Settings', etc. Under 'My Settings', you will see several options you can use to personalize your profile. One of these, is 'Edit Avatar'.

Click on that, and you will be taken to a screen where you have the option of uploading a picture from another website, or from your computer. Mine is one that I uploaded from my computer.

As to the eBay inventory, I would price everything for your paperwork, at yard sale prices--not what you hope to sell them for. Things I sold last year for $5.99, won't move today, even if I price them at .99 cents each.

Good wishes to you.

[Tater]

Hi Daisy,

First welcome to the forum! I agree with the others when they say to start going to free consults with BK attorneys. They will be able to give you bk advice on your particular situation. Each filer has a different situation and each state is different with exemptions, etc. You may need to meet with a few attorneys to find the right one if you do decide to file. Once we knew how bk would work for us, what the trustees were like in our area, and what our options truly were, it made the decision process easier for us. We had already made up our minds to file but it was a relief once we spoke with a variety of attorneys.

Also as others have stated, you would list things at garage sale prices. We did this on our paperwork before we filed. You may even be able to do a phone consult over the phone, I am not really sure. Good luck to you!

[tobee43]

paypal will close the credit card you have with them, but not your account. the bk really doesn't effect much with them directly.

as far as your inventory, it depends on what it is. IF you are for example selling used children's clothing well, it's really not something you need to declare unless you do it as a gain, even if you make money on it according to paypal or ebay records, as it was the cost of goods to what you sold them at. i.e. example you paid $40 for a dress but sold it for $20 on ebay. but if it's new goods then it is considered property and can be covered under you're tools of the trade.

best of luck to you!

ps i never stopped selling during my bk.

[daisyaday]

Thanks for the replies! AngelinaCat, also thanks for the avatar help!

I will definitely look into free consults with the BK attorneys. Can most BK attorneys also settle debt, or do you have to go to a different type of attorney for that?

Thanks for the info on eBay inventory and assets ... that helps a lot!