How Does Income from Cannabis Affect Your Bankruptcy?

Are you considering filing for bankruptcy? Do you receive any income from the sale of cannabis or cannabis products? Even if you receive indirect income from the sale of cannabis, there are important things you should know:

This is a Developing Issue

Since this is still a matter that is developing around the country, there are emerging trends but no uniform rules. Many states have employed regulatory programs for medical cannabis and measures that allow and/or regulate its use by adults.

However, cannabis is still illegal under federal law.

So, How Does This Affect Your Bankruptcy?

The simple answer is yes. Being involved in a cannabis business is complicated due to the lack of federal support for the business.

For example, the U.S. Bankruptcy Court for the District of Arizona recently dismissed a Chapter 13 bankruptcy case due to the debtor’s affiliation with the cannabis industry. This occurred even though the filing debtor was not directly involved in a plant-touching cannabis operation. However, since the debtor was the president and a major shareholder in the company that received most income from the sale of equipment that processed and extracted cannabis, the income was considered revenue from an illegal activity.

What Can You Do?

So, what happens if you have a connection to cannabis and you need to file for bankruptcy? The simple answer is that it depends. Some other courts have not automatically dismissed bankruptcy relief to those associated with marijuana or cannabis. This is a developing issue, but for the time being it seems that bankruptcy is not always an available option. But, this does not mean that you do not have options for tackling your debt.

Need More Information?

At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like to get to know you and we would like you to get to know us. We want you to be sure you are the right fit for us and that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.