Sole propreitorship and bankruptcy

April 15th, 2008 by Questions

My assets: I operate a small grocery store as a sole propreitorship in Toronto. My wife helps me run the store. We don`t employ anybody else. I lease the premises. At any point of time I have about 40K in inventory. We make anywhere between a 2K loss per month to a 5K profit.

My liabilities: I had a good job till October 2006. An automobile accident has left me jobless with an unsecured debt of about 140K which has become a year past due. My wife is not a signor on any of those loans.

My questions: If I declare Bankruptcy will I be allowed to continue running the store? Will my inventory be seized? How will my income and my wife`s income be calculated from the grocery store profit/loss during bankruptcy?

Questions

One Response to “Sole propreitorship and bankruptcy”



, Barton Goth GCO Bankruptcy Trustees said:

This is quite an involved quesiton and that the explanation will be a little to long for this type of a forum. So you are better off consulting directly with a local trustee.

With out knowing the specifics of the operation it is difficult to say, but I have seen some situations where this has been possible. However, the big problem is that when you file for bankruptcy “all your assets” except for the provincial exemptions are lost and the ownership is automatically transfered to your trustee for the benefit of your creditors. This could pose a problem with the inventory etc. So on the surface I would suggest you consider the filing of a proposal as opposed to a bankruptcy, but realistically I would have to look at things in much greater detail than I am able to do here.

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