Archive for category chapter 7
Can I File Bankruptcy If I Own A Small Business?
Posted by hawkeye11 in bankruptcy, chapter 7, chapter 7 bankruptcy, filing for bankruptcy on December 13th, 2009
The answer is Yes. For example, I had a prospective client come in recently, and he had a lot of credit card debt, about $75,000 but he also owned a small business that was just getting off the ground, a corporation, and he had a small rent house with some equity in it and he successfully filed bankruptcy.
If he filed a Chapter 7 bankruptcy, otherwise known as “liquidation” bankruptcy, there is a liquidation Trustee appointed, whose job is to sell any “non-exempt” or extra property that the debtor has, and use the money to pay the debts as far as the money will go.
In this example, a Chapter 7 Trustee or liquidation Trustee may take the client’s stock in the business away from him, and either sell it or liquidate the business and use the equity to pay the creditors. And, a liquidation Trustee may try to sell the rent house, which the debtor did not want to sell because a relative was renting it from him.
But, if the client files a Chapter 13 bankruptcy, we could propose a plan to pay about $250 per month to a Chapter 13 Trustee for 5 years. The Chapter 13 Trustee then pays that money to the creditors, and when the plan is completed, the rest of the $75,000 debt is “discharged” or cancelled, and the client no longer owes it.
And the client can keep and continue to operate the small business, and keep the rent house. In Chapter 13, the debtor remains in possession of all property, unless the plan provides otherwise.
Also, the creditors cannot try to collect the $75,000 during the Chapter 13, because the client is protected by the “automatic stay,” a bankruptcy court order that goes into effect as soon as a bankruptcy case is filed.
Chapter 13 bankruptcy can be an excellent tool to help a consumer reorganize or rehabilitate their finances, while keeping their property and paying their creditors at a level that they can afford. It also stops the debt collectors from calling, and stops all other collection actions such as lawsuit and garnishments from creditors.
Article Source: Bankruptcy Attorney | Legal Blog
Chapter 7 Liquidation
Posted by hawkeye11 in bankruptcy, chapter 7, chapter 7 bankruptcy, denver bankruptcy lawyer on November 20th, 2009
When one researches the generalities of bankruptcy, it is easy to get overwhelmed by the many different forms of bankruptcy one may choose to file. One of the most popular forms of bankruptcy filed by individuals is Chapter 7 bankruptcy. Often times individuals choose Chapter 7 when they have nothing to offer or give to their creditors. A general thought of bankruptcy is a debtor hounded by their creditor looking to take all of his assets and then distributes his assets to those creditors. In return, the debtor is discharged from all liabilities and is granted a “new start” or a clean slate.
This is not exactly what happens when an individual files Chapter 7 bankruptcy. In fact, there is no collection and distribution of the debtor’ assets, but rather the discharge of the debtor without any distribution whatsoever to his unsecured creditors. In a representative case, all of the assets belonging to the individual filing bankruptcy will be taken by a secured creditor. In some instances, the debtor will be able to keep some of their assets under certain exemption laws. There should be some allowance for legal fees to the debtor’s Denver bankruptcy lawyer.
It is incorrect ot think that Chapter 7 Bankruptcy primarily is a mode of collecting and distributing assets of the debtor. Chapter 7 filed by an individual is really a formal way of clearing their debt and allowing that individual a chance to start over with a “fresh start.”
-
-
You are currently browsing the archives for the chapter 7 category.
