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Monday February 19th 2018

Bankruptcy for Small Businesses

The entrepreneurial spirit is among the touchstones of yank culture that has made our country so strong. The willingness of driven individuals to step out and risk their financial stability for the sake of a business they think in has been a catalyst of our country’s growth. However, a up to date study by the University of Nevada shows that one in seven bankruptcies are filed by individuals tying to handle the failure of a small business. While corporations or partnerships cannot file for bankruptcy, Chapter 7 and Chapter 13 are usually used by entrepreneurs who are attempting to handle personal and business debt.

Since small businesses are unincorporated, they don’t have an identical restrictions as larger corporations, because of this any business and personal debts are the responsibility of the business owner. So when a small business owner gets in over their head, the business doesn’t file for bankruptcy, rather the individual files. For small business owners who file for Chapter 7 bankruptcy there are several protections which make it a lovely choice. If you’re a sole proprietor, you operate your online business by yourself so what you are promoting debts are also your own debts, which will be dismissed in a bankruptcy case.

There are several benefits for small business owners to file for bankruptcy. To start with, there is uniform protection inside the U.s. on future assets, which offers a fresh start to the debtor. So, when you’re a business owner who files for bankruptcy, you’re able to start a new business or a new job without worrying about having future earnings seized to pay pre-bankruptcy debt.

Another important benefit for small business owners filing for Chapter 7 bankruptcy is exemptions. Exemptions vary from state to state and are set values above which debtors must surrender property. States with higher exemptions are more attractive to debtors because it protects more of their property. You will need to note that for small businesses filing for bankruptcy, the filer also needs to list all assets both business and personal, which makes the exemption value of the state a vital detail to grasp before filing. It’ll make the variation between keeping a home or having it liquidated.

If you’re a small business owner who is seriously considering bankruptcy and you live in Big apple, you might want to discuss with an attorney who understands The Big Apple bankruptcy laws. Not all bankruptcy attorneys are a similar. While the process appears complicated, a NY bankruptcy lawyer shall be in a position to let you understand your options and avoid making bad decisions. You get one chance to file bankruptcy right the first time. When bad things happen to good people, the brand new York bankruptcy lawyers at Doyaga and Schaefer are here to aid. Stop the harassment, the fear, the financial stress. For a free same-day consultation, call 718-488-7500 or 516-656-7500, or visit our website at bigapplebankruptcy.com for additional information.

Business Reorganization in Bankruptcy: Cases And Materials…  ($65)

This is a well written hornbook for those law students seeking to get their arms around Chapter 11 reorganizations. The concepts that one needs to master to understand business reorganizations can be especially difficult for law students. If you are taking a class in Chapter 11 reorganizations, this is a hornbook worth having. For a general overview of bankruptcy concepts, including Chapters 7 and 13, I recommend professor Epstein’s Nutshell Series book on Bankruptcy.

Bankruptcy  ($9)

I bought this book because it holds itself out to be geared towards small business. Truth is, this book covers personal bankruptcies and only touches on entity bankruptcies. The information is coarse and not very helpful. There are dozens of internet websites which give more information than what can be found in this book, and I am very disappointed. Tort lawsuit creditors, for example, are not even mentioned. If you are looking for information specifically relating to business bankruptcies then I strongly suggest looking elsewhere. If you want to know the 1-2-3’s of personal bankruptcies with some very basic business info, then this book may serve as starting, but utterly incomplete reference.

Bankruptcy, Foreclosure, Short Sales & Rebuilding your Credit – FINAN…  ($6)

This is an interesting dvd.

It has the look and feel of an infomercial, but it’s not one. It just looks like one.

The speakers range from solid and good to I couldn’t watch ’em.

Here is my take on the six segments of the dvd:

-David W. Langley on bankruptcy law: I gave him an A minus. He’s a AV rated bankruptcy lawyer with 25 years of experience, and he looks and sounds like it. The reason he didn’t get an A is that the discussion of bankruptcy law was simply oversimplified. And fairly light on information. It’s an okay very, very simple overview, but I wish that David had been given more time on this dvd, and had presented a more in-depth discussion of bankruptcy law and process. On the other hand, if I had a brother in Florida with a debt problem, I’d have no compunctions about referring him to David (this is not a guarantee of his work; I can’t guarantee the work of any other professional, nor would I; use your own common sense in finding a lawyer and try to find a Martindale av rated board certified bankruptcy lawyer in your State, or a bankruptcy attorney who has an AVVO.com score of 10.0).

-Sherri B. Simpson, another lawyer on this dvd, discusses foreclosures. Her lecture has some value and she says some smart things, like take documents to a lawyer before you sign them, and she does a good job of discussing mortgage rescue scams. That’s valuable. This discussion gets a B because it’s pretty state specific, even though she tries to make it available to a wider audience. But it’s obvious that she cares about her clients, and that she has a lot of experience in the area.

-Carlos Gieots is billed as a credit expert, and his information is generally both simple and accurate on credit issues. WARNING: he seems to suggest failing to list a creditor on your bankruptcy petition under some circumstances. That kind of advice can lose you a bankruptcy discharge, and send you to jail. So listen to him discuss credit and the credit reporting agencies and how to get errors removed from your credit report. DO NOT listen to his suggestion that not all creditors must be listed on a bankruptcy petition. He gets an F, based on a suggestion that sounded illegal, impolite and fattening to me. And if he didn’t mean it, he sure shouldn’t have said it.

-Scott Daniels, a realtor who specializes in short sales, discussed the process in general. It was an overview, again somewhat state-specific, but listening to him makes it clear that short sales are not very easy and not always possible. He gets a C because after listening to him a consumer would at least know a lot of questions to ask an in-state realtor about a short sale.

-There are people on this dvd who are billed as a Licensed Clinical Psychologist and another as a “Celebrity Life Coach, Relationship Expert, and Hypnotherapist”. No, I didn’t watch those segments, because I just couldn’t bring myself to watch a celebrity life coach talk about how bankruptcy is hard and there’s still life after bankruptcy. Because that’s obvious. Because I didn’t watch those segments, and I think they are not particularly valuable to a potential debtor, I didn’t give any points or demerits to those presentations.

Overall, this doesn’t seem terribly useful. The lawyers on this dvd are smart and sincere and experienced. Watching them will give you some useful information, but the bankruptcy lawyer spoke too briefly, and the foreclosure defense lawyer was primarily reporting on the way things go in that state. Well presented, but probably not enough to make this a must-have.

Now, let’s put this in perspective. If I were considering a bankruptcy proceeding or short sale, and I had no idea at all what either were, watching this could be useful. And being put on guard about folks who come to the door to rescue the homeowner from a foreclosure is a good thing.

But on balance, I don’t think this provides as much bang for the buck as the NOLO book, The New Bankruptcy, Will It Work for You.

Nothing in the foregoing should be used as or may be construed as legal advice; this is just a review, folks!

p.s. as I write this postscript, there is a raging debate in Congress over a provision in the Bankruptcy Code that may, after amendment, permit the stripdown of some OR all mortages on residential real property. Will that statute pass? Listen, I’ve practiced bankruptcy law in Phoenix, Arizona for about thirty years, and I’ve watched a long series of amendments to the “New Code” of 1979; and I’ve watched as Congress debated in the past. The 2005 amendments took about a decade to work their way through Congress. So MAYBE the Bankruptcy Code is about to change a lot. And MAYBE it’s not. But if you’re contemplating bankruptcy in Phoenix, Arizona, or anywhere else, you should be aware that the law is currently MAYBE about to change in a way that could be helpful to debtors, IF they qualify and are willing to put up with a Chapter 13 bankruptcy (which makes a root canal look like fun).

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