Business Buyer Diaries: the Reality Before, During, and After
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Business Buyer Diaries: the Reality Before, During, and After
384. Bankruptcy in a different year than the discharge
All right. Well, it's been two and a half, almost three months since the last recording. I figured I'd just update here because it's something kind of in the business acquisition world. But ever since wrapping up the gym and closing things down, we talked with our CPA and, so glad, hired an expert to do the business returns, the personal returns and all that good stuff and one of the curveballs in this whole thing we filed bankruptcy protection.
Speaker 1:Well, so we reached out to our attorney I don't know August, september, october, I don't remember but it probably took us 30 days to like get all of our papers and ducks in a row so that we could like even file for chapter seven. And then after we filed, that was in like October I want to say October or November, can't remember but then after that you go through that. It's an application process. So we had to file our petition. We had to see our bankruptcy trustee like saying, hey, here's our name and info, here's why we are applying for bankruptcy. And then she goes back and then like reevaluates and then issues her verdict after so many hearings, and that verdict was not given until the January. And so here's where it all rolls together and why it's a hiccup and it's not a problem because it's just a tension to manage, it's not a problem to solve. But we filed for bankruptcy in 2024.
Speaker 1:Our bankruptcy was not discharged until 2025. So when you file, your credit drops, all the creditors realize they're probably not going to get paid, and so then that's where your credit just gets smashed overnight. But you don't get the financial benefit of the discharge until it's discharged by the trustee, which was until 25. So our CPA is like hey, you legally filed in 24, but you didn't get the reward until 25. So technically, this is going to impact your returns because sure, it happened in one calendar year, but you didn't get the financial gain or benefit or upside until the following year. So she's saying that, from what she understands, we'll do our normal returns in 24, like normal, but then our returns in 25 will be different, because that's when the financial benefits were received. So I don't know, I don't know how that's all going to pan out.
Speaker 1:Basically, it's middle of June and right now our bankruptcy lawyer and our CPA and the bankruptcy trustee are all on an email chain and the CPA is like hey, the legal side says this, however, the taxes say that. How do you want me to proceed Because even like right now, like the trustee said, hey, take your refund, have it mailed to the trustee and not to me, not to Nathan, um, because she gets like 80% of all the refund value. But when you file tax returns, the IRS, and like the state, they just send it to the address on file. So, like our home and it looks fraudulent if you say, hey, send the return to somebody else, not the person who's filing it, and so it's like our CPA says. It's not even like logistically possible to say, hey, here's Nathan and here's Nathan and family, here's their home address, but mail the refund to somebody else and no, this is not fraud, irs. And so I don't know. Cpa doesn't know how to proceed.
Speaker 1:Irs says one thing, department of Justice says another thing. I'm going to let the experts figure it out. So I am so glad we have a CPA and a bankruptcy attorney doing all the communications because they get to figure out all the mess. So no update as of now. Um, we have extensions and everything. We're basically waiting for the trustee to tell us. So that's the learnings If you can go bankrupt the same year, that you're going to get the discharge, if not, then you'll end up like us and you'll have to figure it out afterwards. So, anyhow, life is good, jobs are good, family's good. Um, we're going to rock and roll from there. That's it. That's where we're going. Let's rock and roll.
