I might have to undergo expensive medical treatment. I have no insurance and no savings. I have a small business that makes very little profit but pays for itself with no problem. I make too much money for medicaid but not enough to afford health insurance. I would have to file bankruptcy as I won't be able to pay the medical bills but will I lose my small business if I do that? I'm a sole Proprietor.
Did you know that, as a result of the Coronavirus pandemic, you can enroll in Covered California right now. Even if you thought you could not afford coverage before, check again, talk to a Covered California agent. If you have a modest income from your business which is too high to qualify for Medi-Cal, see if you can enroll in a "Silver" plan through Covered California. Please check into this and get yourself covered! Don't "put the cart before the horse" and assume that the only option is to file a bankruptcy case!
Based on information provided, may/not be possible to file C& or C13 BK, retain all assets, eliminate all debt. Devil in details.
Important moving parts include, not limited to:
-BK exemptions available to you;
-value of exemptions avaiable to you;
-liquidation value of business, inventory, equipment, receivables;
-pre-BK planning options
Consult BK counsel, review all missing information, accept advice regarding BK and non-BK options.
I second Mr. Steingraber's comments. Many of my small business Chapter 7 clients keep their business without problem, but it really does depend on the details. Speak with an experienced bankruptcy attorney *before* you make any decisions.
It depends on the "value" of the business, its assets, receivables, inventory, etc. There are too many moving parts in your situation to give you useful advice. I recommend you use the Find a Lawyer feature offered by Avvo. Make a list of 4-5 having many 5 star reviews from satisfied clients. If you don't get a prompt call back from one, go on to the next on your list. Some offer a free consultation by phone or in person.
I'm sorry to hear about your health condition. I hope that you will get better soon.
To answer your question, you might have to sell your business under bankruptcy. If you file a chapter 7 bankruptcy, then probably you will have to liquidate your business to pay off creditors. If you file a Chapter 11 or 13, you will ask the court to reorganize your debt, maybe lower it or extend the payment period for creditors. Since you want to keep a sole proprietorship, you probably want to seek a chapter 13 bankruptcy to extend the payoff period. To be eligible for chapter 13: you must have less than $394,725 in unsecured debt and secured debts are less than $1,184,200.
I hope that helps.
