did he file it himself or with a lawyer? this is stuff the lawyer should have already explained. i can try to answer but my memory may be foggy.Resurrecting this thread to ask a few questions that have come up. Dad filed Chapter 13 bankruptcy in December.
1) Am I correct that any personal creditors (or business creditors for which there is a personal guarantee or personal liability) have to file a claim in court against the bankruptcy to get anything? If they don't file within a certain time, the debt is simply discharged? Do you know what that time frame is?
2) How can I tell which business debts are personally-guaranteed or have personal liability? Is it safe to assume business credit cards are personally guaranteed? In going through some business mail I found unpaid bills (internet for the office, shredding/document management, some other suppliers) - are these business or personal debts? He also owes months of back rent on the office, but the lease looks to be in the business's name, so I assume there is no personal liability there.
3) He may be eligible for the Employee Retention Credit in the amount of ~$70,000. The IRS paused reviewing these claims due to the high number of fraudulent claims, but they say they have resumed and I believe my dad's business is legitimately entitled to it. If a check for the credit shows up in the mail, what would be the consequences of him withdrawing the entire amount to a personal account without paying off business debts like back rent? I strongly suspect this would be something he would want to do.
4) If he starts working again as an independent contractor, is it correct to say that he should set up a separate LLC for the income, to avoid having new income be potentially exposed to debts from the current business?
1 - when you file you have to give the fullest most accurate picture you can. i don't remember the timeframe for the creditors you forgot to list.
2 - the answer is in every contract, but yeah, you can assume all the business credit cards had personal guarantees, and almost surely the lease too, just read it, who are the parties to the agreement, how did he sign, does it say anything about this. im concerned he filed the case already but you still have this question. i hope he used a lawyer.
3 - i don't know but he should definitely not do that unless a lawyer tells him it is ok.
4 - yes he can earn new income under a new business after his plan is approved and there's no problem as far as old debts attaching to his new work.
Statistics: Posted by cchrissyy — Sun Jan 26, 2025 8:50 pm — Replies 46 — Views 9232