Archive for category filing for bankruptcy
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
Bankruptcy Questions Answered
Posted by hawkeye11 in bankruptcy, bankruptcy lawyers denver, denver bankruptcy lawyer, filing for bankruptcy on November 11th, 2009
Filing for bankruptcy after those endless debt issues may seem as the last resort. However, it might be more of a fearful act. Bankruptcy is a hard-nosed procedure with almost permanent impact. The menacing after effects of bankruptcy, which often are not properly assessed before filing for bankruptcy tend to confuse during the process, thus impelling many to cancel the proceedings.
Debt issues are difficult to deal with and even more strenuous are the problems which typically complement the financial agonies. Filing for bankruptcy, however, is not the very perfect answer to curb miseries. Instead, Filing for bankruptcy might just aggravate the issue, leading to even greater, unmanageable troubles. Therefore, before beginning with the official bankruptcy Filing act, read on to find all about bankruptcy and thus refrain from the insidious obligations.
Bankruptcy – The Concept
In the most positive terms, bankruptcy is a legal proceeding that allows individuals and companies to start over again without managing their debt obligations. When large corporations opt for bankruptcy, the leading media representatives talk about it, while when average earning people apply for one, they are an addition to the statistical reports and usually ends in a negative reflection on the person. In the UK, both the stated bankruptcy filing announcements are a norm, thus making bankruptcy sound as a very tempting debt solution route. To further entice the sufferers of the debt, bankruptcy promises to cease all financial stress, and suggest a way out with less to pay, thus eliminate all debt issues.
Bankruptcy has a Host of Harmful Consequences
If you are just thinking about filing for bankruptcy, then consider the matter deeply, because there is much more to it than the benefits stated above, Bankruptcy also has a host of disadvantageous consequences. Once an entity begins filing for bankruptcy and declares the bankrupt is devoid of assets of value such as a house or other equity. Businesses could be sold, including machinery to repay creditors. Those who have declared bankrupts may have accommodation issues, with landlords not too delighted to accept them as tenants. Remember, bankruptcy, is a legal procedure, and therefore is recorded by bankruptcy law. Bankruptcy stays in files for years (see enterprise act for updates) and therefore negatively impacts financial transactions until the same time. The image is not very helpful in envisaged career moves as well. Employers are hard on potential employees with bankruptcy records in their credit files and often are apprehensive to hire an individual with bankruptcy in their past. Of course, seeking and obtaining competitive credit terms can be just a dream after filing for bankruptcy.
Bank current accounts suddenly seem unobtainable. And after all this mess, there are certain debts which even bankruptcy cannot deal with and there are secured creditors, who have every right to their share, even after the bankruptcy has been declared.
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