Probably nothing at all.
Whether you file a chapter 7 or a chapter 13 case, we are required to submit profit/loss statements for your business. We also list all of your equipment, inventory, and accounts receivable. Each of these is treated a little differently in bankruptcy.
1. Equipment: Up to $5,000 of your equipment is protected. I filed a case this morning listing the following equipment for a home-based businesses: capes, aprons, blades, shears, texturizers, shear sharpeners, hand dryer, combs, brushes, hot tools, chair, clippers, cap dryer, sink. (This was the first time I ever listed a “cape” in bankruptcy). All of it was exempt (protected).
Under Utah law, I can protect up to $5,000 of your tools of the trade. Utah Code, Title 78B Chapter 5 Section 506 states that
An individual is entitled to an exemption, not exceeding $5,000 in aggregate value, of implements, professional books, or tools of the individual’s trade, including motor vehicles to which no other exemption has been applied, and that are actually used by the individual in the individual’s principal business, trade, or profession.
2. Inventory: I can protect NONE of this. Hair dyes, shampoos, styling products, etc. all count as revolving inventory. Thankfully, it is not worth much, and you generally rotate through it quickly.
3. Accounts Receivable: These are not protected, so if you have $10,000 of outstanding a/r, then you may lose it. However, realistically, your a/r probably has no real value since you have not been able to collect on it, so you are not losing much of anything.
We value the business in the bankruptcy, but since the business is only you, it has no real value outside of your efforts and hard work.