Chapter 11 May Help Small Businesses Weather Downturn

Since a good percentage of our bankruptcy clients are small business owners, I keep an eye out for articles on financing. This article from  Christian Science Monitor caught my eye because of the contradictory messages about small business lending.  While the federal reserve system is “encouraging” banks to lend to small businesses, banks counter that [...]

The Power of the Automatic Stay

Firethorne Country Club filed for Chapter 11 in March. In a prime example of the power of the automatic stay, the club’s owners bought some time to reorganize before a creditor could seize operations. A 2 p.m. hearing in federal court on was canceled after Firethorne’s owner’s filed the bankruptcy petition just after 1 p.m. How [...]

Life After Bankruptcy

There are scores of inaccurate beliefs about what happens to someone after they’ve received bankruptcy protection.  What people read on the Internet, hear from friends and family, see in advertisements from “tax repair” services, “credit repair” services, “debt consolidation” services and the like is often (at best) misleading or misinformed, and (at worst) downright criminal. [...]

Chapter 11 Bankruptcy: Businesses and Individuals

Chapter 11 bankruptcy is a reorganization. More businesses than individuals file for Chapter 11; it is an orderly process that allows the debtor time and space to reorganize its financial affairs and repay its creditors some or all of the debt owed. It is a vehicle through which debtors can reject or cancel certain leases, [...]

What’s it Cost to File for Bankruptcy?

This requires a two-part answer. First, filing fees must be considered. Filing fees are charged by the bankruptcy court and are due upon filing; these fees help fund the bankruptcy court system. The filing fee for a Chapter 7 bankruptcy is $299.00; for Chapter 13, $274.00; and for Chapter 11, $1039.00. Second, if you wish [...]

Bankruptcy 101: What Every Lawyer Needs to Know About Bankruptcy

In this economy, most attorneys — no matter what their practice area — have established relationships with clients who are now either in financial difficulty, or are affected by someone else’s financial difficulties. Divorce attorneys, personal injury attorneys, real estate attorneys, employment law attorneys, and construction law attorneys are just a few of the types [...]

Lessons from Reader’s Digest

Reader’s Digest just announced that it is filing a prepackaged Chapter 11 bankruptcy case.  Its goal is to reduce its debt to one-fourth of the present level ($2.2 billion).  The company is essentially using Federal bankruptcy law as a financial planning tool. At the present level of debt, Reader’s Digest is not a viable company.  [...]

Moving Through the Python, Bankruptcy Cycles

Today’s economy is force-feeding the bankruptcy python: developers who can’t pay their subcontractors force the subs into bankruptcy. Most small contractors and subcontractors are owned by individuals who guaranteed the business’s debts and will eventually seek personal bankruptcy protection. Bankruptcies always come in waves.

Who’s filing for bankruptcy now?

A report released today by the Institute for Financial Literacy (IFL) shows that the recession is noticeably shifting more middle class Americans into bankruptcy. IFL’s 2008 Annual Consumer Bankruptcy Demographics Report found that the average American in financial distress and seeking credit counseling and financial education is a 35-to-44 year-old married Caucasian with a high [...]