The Hazards of Self Employment in Chapter 7

By Cathy Moran, Esq.

Why would a Chapter 7 trustee shut down a proprietorship business with no value?

That question comes up again and again particularly from newish bankruptcy lawyers who can’t imagine that a trustee would demand the closing of the debtor’s business. After all, goes the argument, the debtor needs to make a living and the business has no non-exempt value.

The trustee’s insistence on closing the business is more understandable when you hear this nightmare.

The postman, the . . .

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