What happens to my ebay shop when I file bankruptcy?

Same as any other business … we list it, value it, try to protect it, and use it to help calculate your household income.

When you file bankruptcy, you are required to list any assets you have.  Your asset list includes any businesses your own and/or operate.  If your business is profitable, we add that profit to your income, if it is losing money, we may even use it to reduce your household income.

Brick and mortar businesses (like a convenience store) need to list all of their inventory and equipment.  Equipment and tools of the trade can be exempted (or protected) up to $5,000 in value.  Inventory is never protected.  Virtual businesses, like an ebay shop, need to do the same thing.  Arguably, we can list your home computer and website as tools of the trade and protect them, but any inventory in your shop may be subject to a trustee turnover motion.  This means that if your ebay shop owns $10,000 in rare My Little Pony TM dolls, then the trustee could demand that you turn over those ponies so that he can sell them.  ebay shop

On the other hand, if people simply list their property on shop site and pay you a commission, then you do not own the inventory.  When you operate as a middle-man, never holding property but simply buying and selling it, you never actually own the inventory for long enough to create any real issues.

I have had clients try to conveniently “forget” that they had ebay shops.  Hiding an asset from the trustee is always a bad idea and seldom works.  Especially if it is an income generating asset.  Those paypal credits into your bank account show up when the trustee is reviewing your bank statement, and he will follow up with more questions.