MasConcepts Incorporated

I’m seriously contemplating filing Chapter 7 bankruptcy. I currently have about $100,000 in unsecured debt, and after speaking with a bankruptcy attorney, I was told I would likely qualify for and successfully complete a Chapter 7.

A little background: I was employed for six years before being terminated after the birth of my son, who had significant medical needs as an infant. I requested an additional month of leave to complete his treatments and appointments. My employer’s position was essentially that they could not continue to accommodate my inability to return to work because the disability belonged to my son rather than to me. As a result, I lost my job and have been trying to recover financially ever since.

The complication in my case is that I own a patent for a pet product that I invented. The attorney I spoke with said he could not guarantee that a Chapter 7 trustee would allow me to keep the patent. Although I am listed as the sole inventor on all of the official patent paperwork, my fiancé paid the entire cost of obtaining the patent.

While the patent currently generates no income and has never been licensed, sold, or commercialized, there is a concern that a trustee could try to sell it in order to pay creditors if the trustee believes it is worth more than the approximately $17,000 wildcard exemption that would be available to me under my state’s exemption scheme.

I’m wondering whether the fact that my fiancé paid all of the costs associated with obtaining the patent has any practical significance in a bankruptcy case. Would a trustee view my fiancé’s financial contribution as relevant when evaluating the asset or determining whether it could be administered for the benefit of creditors?

The patent means a lot to me personally. I created the product with my dog in mind, and tragically, he passed away while the patent application was still pending. Because of that, I’m emotionally attached to it in a way that goes beyond its potential financial value. My long-term plan has always been to try to license or sell the invention, but I haven’t taken any meaningful steps toward commercialization yet.

My question is whether anyone here has filed Chapter 7 while owning a patent, trademark, copyright, or other intellectual property. Were you able to keep it? How did the trustee determine its value? Did anyone have a situation where the intellectual property had little or no current income but potentially had future value?

I’d really appreciate hearing from anyone who has been through something similar.