Legal Question in Bankruptcy in California

Re: Bankruptcy question

The answer depends upon a large number of factors. First, have they filed yet? Was the business purchased by the buyers as individuals, or did they form some entity (Corporation, LLC, Partnership) to buy the Dance Studio. Finally, are there any assets - sounds like the sales price was essentially for goodwill, and I assume there are not a lot of tangible assets in a dance studio business. As such, if they file Chapter 7, unless they have other assets, the chances of recovery are slim, but not impossible. If they have not yet filed bankruptcy, you may wish to file suit now and try to get a judgment on the note. By obtaining a judgment, and recording an abstract of judgment in the county in which they live and own assets, you may be better served in a bankruptcy, but it still an involuntary lien that generally may be avoided. I'd suggest sitting down with an attorney to review all the facts before giving up or taking any action on this matter. There are too many factors to give you a conclusive answer on this forum.

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