Filing Bankruptcy for Small Business

When you run a small business it’s not easy to get to the point that you have to file bankruptcy. It means possibly shutting the door on your dream of running your own business. But there could be a way that you may be able to keep your doors open and still file for bankruptcy.

Chapter 11 Bankruptcy

This type of bankruptcy is set up to be used by corporations and individuals who own businesses. When you run a small business and your getting to the point of where you unable to pay all the bills you have you may want to consider this option. With this type of bankruptcy a business can reorganize their debts. Hopefully with this reorganization they should be able to make payments and keep their small business running.

An Attorney

Most of the bigger corporations out there will usually have a lawyer or a few lawyers on their payroll to handle these problems. But most likely if you run a small business you will not have a lawyer on your payroll. But they shouldn’t be that hard to find. Open up the yellow pages or go on the internet and do a search engine search for bankruptcy lawyers. Talk to a few before you make your final decision, this isn’t going to be a cheap undertaking by far. Just to file for a chapter 11 bankruptcy it will run you over $1,000. That doesn’t even include the fees that your attorney will charge you. But it’s really important to get an attorney to make sure all the records that are needed by the court are filled out and filed correctly. This is why you need to see a few Tampa bankruptcy attorneys and see if you can get the best fees possible.

Paperwork

There are certain things the courts will ask for with a person who runs a business they will need to provide not only the business information, but also they need to supply their personal financial information. Another reason why you should hire a lawyer, they know ins and outs that might help you out in filing the bankruptcy. With the information you will need both the assets of your business and personal assets, liabilities of both. How much you make and what you pay out, again for both business and personal. To find out more specifics of what you will need to provide you can read up more on the internet or you can call an attorney. Several attorneys will most likely meet with you for the first time for free. So get to looking if you feel you need to take this step. Make sure you take the step after much thinking. Don’t wait too long though, you may not be able to try and save the business even once your bills are reorganized. With all the paperwork ready your attorney will be able to file your petition for bankruptcy, than it’s only waiting for court and the judgment.

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Bankruptcy Laws

There are three different bankruptcies that are available to people out there. Chapter 13 allows you to reorganize your bills and at times even pay around 50% less on the bills that you owe. You can see how this would help you out if you are running short on money. If you are thinking about filing for Chapter 13 bankruptcy you should find an attorney who will help you out.

Filing

Most of the time when you file for Chapter 13 bankruptcy you won’t even need to go in front of a judge. When you file the petition with the clerk of court you will need to pay fees for the filing. The filing fee will run you $235, plus another $39 for an administrative fee. It’s not near as much as a Chapter 11, but a bit more than what a Chapter 7 will cost you.

Why File a Chapter 13?

Filing a Chapter 13 is a good idea for those people who have the money to be able to pay on their bills. If you are just running a bit short each month filing a Chapter 13 will let you reorganize the bills and give you a lot longer time to pay off the bills. You will need to provide a listing of your creditors and their addresses to provide the court with. Also how you will pay back the bills; this is where the attorney’s help will come in handy. With the attorney who has handled these types of cases before they will know how to file these forms and have them set up in the right way.

Finding an Attorney

When you go looking for an attorney to help file your Chapter 13 bankruptcy, you should compare several. Don’t pick the first one that you talk too, some attorney’s may not charge as much to take your case. While some others will accept payments for their fee, the only catch you will have with this is they will not file until you have fully paid their fees. But once you have hired them, you can refer the collection calls to their office. So it’s not a bad deal at all. Check in your yellow pages you will see pages and pages of attorney’s that only deal with bankruptcies. Of course you should pick one of those. Call them and ask about their fees and see if they accept payments. Sometimes you might want to meet with them in person too. This will give you the opportunity to see how the attorney is in person. Make sure you have no problem communicating with them, and that you feel comfortable talking to them.

Paying your Creditors

Like stated above you will need to come up with a payment plan, and provide financial records that will show that you will in deed be able to pay the plan that you have set up. Each month you will send the check in the amount agreed to in to the trustee who was assigned to your case. The trustee will than split up the check and send the payments to the right creditors.

** This is not legal advice. Please consult with a local attorney regarding your specific situation.**

About the Author – This article was provided by Gerrid Smith and sponsored by the Jodat Law Group in Sarasota, FL.

Bankruptcy: Is it Right for you?

When you begin to have money problems and they begin to get really bad you will most likely consider filing for bankruptcy. Everyone has problems once in a while, but there is a certain point you may come to where it’s just not possibly to keep going on like you are. That’s when you should call a bankruptcy attorney and see what you can do.

Finding an Attorney

You can find your attorney by either looking in the yellow pages, or on the internet. Don’t settle on the first Sarasota attorney you call though. See what their fees are and if you are able to make payments on the amount. An attorney who works with you for their fees is a nice thing when your having problems paying all your bills. Make sure that the lawyer you pick is easy to talk to and that they return your calls quickly, within 24 hours.

Filing the Petition

The next step is filing the petition; actually your lawyer will do that for you. Most of the time your attorney’s fees will include the filing fee for the court and the administration fee that needs to be paid too.

What needs to be filed?

You will need to provide your lawyer with a listing of your assets and liabilities, paychecks, monthly expenditures, and if you have copies of any of those past due notices you have gotten in the mail. With all this paperwork given to your lawyer it will make their job so much easier.

Is it the Right Choice?

If you are so far behind on your bills that you in no way can catch up it’s probably the best idea for you to do. But you should really talk to a lawyer because they are the experts and know how to set you the right way. When you go to find your attorney this is one of the best reasons to find one you can talk too, one that you trust.

Clearing your Credit

With a Chapter 7 bankruptcy you will need to qualify for it. This is another thing you will be wise to ask an attorney. A Chapter 7 will allow you to clear up your credit and get those bills discharged off your credit. But if you have a house you may lose it, or a vehicle, especially if it’s not claimed as exempt on your petition. These things are liable to be liquidated and help to pay bills that will not be discharged. It’s not something that happens often, but just in case it is something that you should be aware of, but a good lawyer will have told you that already. Now a Chapter 13 you will not have the things that you owe discharged, but you will have to pay about 50% less than what was left to pay. But if you have a house that is in foreclosure this is one way that will allow you to stop the proceedings from going on, and may actually allow you to save the house.

** This is not legal advice. Please consult with a local attorney regarding your specific situation.**

About the Author – This article was provided by Gerrid Smith and sponsored by the Jodat Law Group in Sarasota, FL.

A New Start after Bankruptcy

There may come a point in your life that you are faced with over whelming bills, the financial stress you are facing may seem hopeless. At this point you may decide that you have no way out except to file for bankruptcy.

Comparison of 2007 and 2008

In 2008 when compared to bankruptcy filings, there were over 200,000 more bankruptcies that were filed. And if you compare the states totals from year to year almost every state had an increase in the amount of filings. It’s a sad statistic that shows just how bad the economy has gotten. With the crash of the housing market, tons of people were faced with losing their homes, and several of these may have helped to contribute to the higher rates.

What Attorney to Choose

You should compare a few different attorneys before you pick the one to help you. Picking the first attorney may be a bad way to go but if you talk to more than one you may find a lawyer who will charge you less in fees. Feeling at ease with the lawyer you choose is very important too. Plus you should find out if the fees of the lawyer you pick and whether they include the filing costs of your bankruptcy. Another great thing to find out from the lawyer is if they will accept payments for the fees. The only thing about this way of paying your attorney is that they will not file the petition until you have the fees all paid off. However, what’s nice about this is that once you have agreed to hire the lawyer you will be able to refer those collection calls to your new lawyer.

Which Chapter?

Now it’s best to ask the Sarasota lawyer that you hire which chapter is best, but these are a few highlights of the choices you have. There are three different chapters of bankruptcy; they are the chapter 7, chapter 11, and chapter 13. First off the chapter 11 is normally used by corporations in order to reorganize their bills. However, there are a few people who may file with a chapter 11 if they own a business. With a chapter 7 you will need to qualify for it first, this is where your lawyer comes in very handy. They will find out a few specifics about your finances and what you would like to have happen. Than they will let you know which bankruptcy is the best for you. A chapter 7 will allow you to have credit card and medical bills discharged. But it will not protect a house from foreclosure hearings. While a chapter 13 will stop the proceedings of a foreclosure when it’s filed in the courts. This will give you the chance to be able to catch up the mortgage payments and keep your house. However, with a chapter 13 you will need to reorganize your bills and make payments on them. Of course it will normally be around 50% of what was owed on the bills, and you will have anywhere from 36 to 60 months.

How to File

Your attorney will help you get all the paperwork ready once you hire them. But you will need to provide them with a listing of all your assets and liabilities as well as how much you make and what you pay out each month.

** This is not legal advice. Please consult with a local attorney regarding your specific situation.**

About the Author – This article was provided by Gerrid Smith and sponsored by the Jodat Law Group in Sarasota, FL.

Most Common Types of Bankruptcy

Growing up in a small rural community, I never really knew much about bankruptcy. It was a word that was whispered occasionally or said in a hushed tone as someone walked by, but not a common word. As I have grown older and as economic times have grown worse, it is becoming a very common word in our society. If you want to understand more about bankruptcy and bankruptcy law then continue reading and learn about the process and the best way to insure that you handle it properly.

Bankruptcy is when a person legally declares that they are unable to pay their creditors. Normally bankruptcy is a last resort for an individual after they have exhausted all means of paying their bills. With the current financial crisis that is occurring in the United States, there is a plethora of people declaring bankruptcy. It is very important to understand the different types of bankruptcy and the laws surrounding them if you find that you are in this situation.

There are a number of different “types” of bankruptcy. Perhaps you’ve heard terms tossed about such as Chapter 7 or Chapter 11 and wondered what they meant. For the most part, these are the two terms that you probably heard about. If an individual declares bankruptcy, they normally file Chapter 7 or Chapter 11. In a Chapter 7 type of bankruptcy claim, the individual normally gets to keep one vehicle, their main home, and personal assets such as clothing. Excess personal items, such as other vehicles are sold and the money earned is doled out between the creditors. Normally, most or all of the dept that the debtor owed is “forgiven”. This is a common type of bankruptcy declared in the United States. Another type of bankruptcy that is commonly declared is Chapter 11. Chapter 11 bankruptcy is normally declared by individuals who owe very large and substantial amounts of money. Because they owe such enormous amounts of money, their creditors will not “forgive” such large amounts, so they find they must declare Chapter 11. In Chapter 11 bankruptcy, the debtor also gets to keep most of their assets, but the court and creditors come up with a plan for the debtor to pay back the money that they owe over a number of years.

Whether you find that you are a person who needs to declare Chapter 7 bankruptcy, Chapter 11 bankruptcy, or another of the types of bankruptcy, the most important thing to do is know your rights as the debtor. The easiest way to make sure you are handling the process correctly is to find a lawyer who specializes in bankruptcy law. As with anything in life, it is better to find someone who knows the ins and outs of a topic. By choosing a lawyer who specializes in bankruptcy law, you will have someone on your side that knows the most current laws and can make sure that you are given the fairest treatment on your individual circumstances!

Disclaimer: This article provided by Jodat Law Group of Bradenton, FL

The Basics of Bankruptcy

Bankruptcy is a process whereby the court administers the assets of a debtor in order to satisfy the creditors. A debtor may choose bankruptcy as a way to resolve a hopeless financial situation or to hold off the debt collectors long enough to allow for the institution of financial reorganization. Either individuals or businesses may file for bankruptcy and in some cases a creditor may force a debtor into bankruptcy proceedings. The bankruptcy falls under US control and has two goals: fair treatment for creditors and to allow businesses and consumers to obtain a fresh start.
Whether you should file for bankruptcy depends on several different things and should be weighed carefully. However under certain conditions it is probably in our best interest to file bankruptcy. Some of the reasons that might render bankruptcy the best choice include the following:
• You are only able to make minimum payments on your bills
• You are unable to create a budget that will get you get you out of debt in five years
• Your mortgage or loans are facing foreclosure
• You have experienced a severe financial setback

There are a couple of alternatives to bankruptcy such as attempting to negotiate with creditors to reduce monthly payments or working with a non-profit credit counseling agency. Because there are some consequences one must face when filing for bankruptcy, if there are alternatives available, you should use them whenever possible. Bankruptcy will stay on your credit report for ten years, so even though you cannot be fired from your job for filing bankruptcy, you may find it very difficult to be approved for credit because you are considered by creditors to be a higher risk.

Bankruptcy laws differ from state to state, but each state has a list of exemptions that protect certain assets such as your house, car (if it falls below a certain value), retirement funds, household goods and clothing. The majority of people who file bankruptcy are able to keep all of their possessions. You can even keep your mortgage or car as long as you continue making the payments. Some debts are excluded from bankruptcy including the following:
• Alimony
• Child support
• Recent back taxes
• Student loans
• Large purchases that have been made recently
• Fines or penalties imposed by government agencies
• Fraudulent debts

There are several bankruptcy chapters that may be filed. The most common ones are the Chapter 7 where businesses and individuals give up some non-exempt assets and are discharged from most debts; Chapter 9 is the same as a Chapter 11 but is specifically for municipalities; Chapter 11 allows businesses to reorganize their debts and in order to remain operational;  Chapter 12 provides debt relief for farmers and fishermen who have a regular income; and Chapter 13 allows an individual with a regular income to repay debts under a court appointed payment plan.

An automatic stay is granted as soon as someone files for bankruptcy and stops any further collection action by creditors. When the procedure is finalized, any debts that are discharged do not have to be repaid. With a Chapter 7 this happens almost immediately but with a Chapter 11 and Chapter 13 any remaining debts are discharged at the end of the repayment period.

This article was provided by http://www.jodatlawgroup.com/bankruptcy-attorneys.nxg

Disclaimer: This article provided by Jodat Law Group of Bradenton, FL

How to Deal With Bankruptcy Law

Bankruptcy is a very unfortunate situation and can happen even to seasoned businessman or to a new entrepreneur. To avoid falling into such a trap one should ensure to keep his or her financial health in a very good state. Filing bankruptcy is not an easy job and one has to go through a very complex process involving lot of complex court procedure. Also it affects badly your financial rating for securing loans, which you may need for business development or for your personal requirements at any future stage of your life.

Bankruptcy is a law provided for those who are unable to pay their debts and this law is utilized to provide them with a way of paying their creditors. Since there is no debtor’s prison any more, no one has to worry about going to prison because of not being able to pay. Instead, bankruptcy consolidates the debts and sets up a schedule by which the debts can be paid.

One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts. Actually life is not always fair. Most people that file for bankruptcy do so out of necessity not because they simply want to avoid paying their debts. Of all the people that file for personal bankruptcies, nearly 40% of them file due to some financial crisis outside of their control. In many cases this financial crisis is some serious health issue.

The debtor has to file the bankruptcy report in the court to stop further payment of interest on the borrowings on account of his inability to repay with declaration that his income is not going to improve in the near future as well. This requires furnishing causes of bankruptcy viz. losses in business, family dispute, job loss, poor health or illness, heavy expanses on treatment, natural calamity resulting in damage to assets or business etc.

Economic and social changes have prompted the need for reform on the bankruptcy laws through the years. The past couple of decades have seen changes in the financial world as well as social upheaval. With credit flooding the nation the past several decades, consumer debt has sky rocketed and the rate of default on credit cards has caused many to seek bankruptcy protection. Medical problems, divorce and job losses have caused most of the Chapter 7 bankruptcies.

A record number of bankruptcies were filed in the 1980s and early 1990s. Job losses and business losses accounted for this record number of bankruptcies. Many small businesses closed during this period, but also large companies such as Texaco, Continental Airlines, Greyhound and Pan Am also filed for bankruptcy. This large number of bankruptcy filings put the bankruptcy courts in a bind to handle all of them; thus, they utilized the assistance of bankruptcy professionals to speed up the court procedure. These professionals were approved by the court to act as examiners and mediators.

Steve Buchanan writes article for http://www.bankruptcyinformations.com/ and http://www.bankruptcyinformations.com/california/bankruptcy-law/

Different Ways to File the Bankruptcy

A bankruptcy is the last option any businessman wants to take. They can cause a big dent on their credit rating and deeply ruin their reputation. But sometimes filing for bankruptcy is the only solution to get a person out of dire straits.

An important thing when looking for the right form is location. Make sure it is for the state and whatever locality that you are in. State laws vary widely, so it is especially important to find the form for the state you live in. It is worthless if it’s for the wrong state. Also, make sure that the form is official. Look for government seals, or compare it with the others, and it will be easy to see whether it is or not. Filing with an illegitimate form won’t do you much good.

There are various steps which you must follow when you want to file the bankruptcy. First, you have to fill out a bankruptcy form where you will provide your personal information and information on your finances, recent financial transactions, secured and unsecured debts, expenses, creditors, assets, and tax returns. This will serve as a petition. Upon filing, you will have to submit one original copy plus three other copies to your local United States bankruptcy court. You will keep one copy for yourself for reference. At this stage, you can ask the help of a bankruptcy lawyer to help you decide on what kind of bankruptcy you want to file. If you choose to file a Chapter 13 bankruptcy, you will be required to pass a repayment plan of three to five years.

Research your options as it relates to filing. Some people choose to file without the aid of a lawyer. But it’s highly recommended to hire a lawyer. Your research should help you decide on a lawyer. In most cases, people who choose large firms to represent them will work with a paralegal and not the lawyer. Try to find a firm in which you have direct contact with your lawyer.

In filing a bankruptcy case, do not use your credit cards. If you do so with the intent to file, a creditor can challenge the discharge of the debt owed or even your right to discharge any debt. If you obtained the debt knowing that you could not repay it, you may not be able to discharge that debt if the creditor challenges it through a lawsuit, or adversary proceeding, in your bankruptcy case.

Immediately upon filing, there will be a provision to prevent creditors from contacting you or laying claim on your property for a month. After a month, the bankruptcy trustee will call for a meeting where you and your creditors will have to attend. This meeting is called the 341 meeting. This meeting usually lasts just five minutes. If both parties are not able to compromise and an objection is made, a judge will intervene. If a compromise is reached however, a notice from the court will be sent to you after four to six months discharging you from debts.

Steve Buchanan writes article on many topics including Bankruptcy advice and bankruptcy information.

Sub-prime Mortgage Crisis & Chapter 13 Filings

In recent months, the amount of foreclosures filed throughout the country has more than doubled from the same time period last year. The reasons for such high percentage of filings are numerous. Primarily, the sub-prime mortgages have landed in the hands of individuals who most likely did not qualify for convention financing. Thus, the interest rates on the loans remain higher than other conforming loans. Additionally, many of the sub-prime loan products involved adjustable rates (ARMS) which typically re-set within the first few years of the loans inception.

As sub-prime loans relate to Chapter 13, the typical scenario is as follows: The homeowner qualifies for the loan without a substantial down payment and without significant income documentation. The monthly payment is a stretch for the homeowner; however, it is temporarily manageable. Depending upon the type of ARM, the loan may reset in one, two or three years. It is at that point in time that the homeowner may not be able to make the new, higher mortgage payment. The homeowner is also unable to refinance the debt on the property since the type of loan products needed to accomplish that task no longer exists. Thus, the homeowner is in quite a tough situation. The current real estate market would make it nearly impossible for the homeowner to sell the property and pay off the mortgage. Chapter 13, known as the home saver case, would not be practicable in the case of adjusting ARMS.

The idea behind Chapter 13 bankruptcy is to allow a homeowner to catch-up on whatever mortgage arrears have arisen in addition to making the current mortgage payment on time. As rates adjust and loans reset, the homeowner simply cannot make the current mortgage payment, let alone a partial payment to catch-up. The situation is basically a doomsday for both the homeowner and the mortgage company. The homeowner was banking on the ability to make the payments and/or refinance the outstanding debt at a later date. The lack of real estate appreciation has led to the inability on the part of the homeowner to do just that.

What we are likely to see is a large number of homes on the market for sale. Many of the borrowers will file for Chapter 7 bankruptcy and not Chapter 13 bankruptcy. I believe that the market will take five to seven years to begin to show some signs of appreciation. It will be interesting to see if Congress amends the bankruptcy code to allow mortgage debts to be adjusted. If not permanently, then for a short time frame of three to five years.

David M. Siegel is the author of Chapter 7 Success: The Complete Guide to Surviving Personal Bankruptcy. He is a member of the American Bankruptcy Institute and currently practices bankruptcy law in Chicago and its surrounding suburbs. Additional information is available at http://www.chapter7success.com .

Auto Repossessions and Bankruptcy

What happens to an auto that is repossessed before, during or after a bankruptcy case? The answer will depend upon which type of bankruptcy or which chapter rather, that the debtor has filed. It also depends upon whether or not the debtor wants to recover the vehicle or simply let the vehicle go. The basic rule is as follows; the debtor remains the beneficial owner of the vehicle until such time that the vehicle is sold at auction. What this means is, the debtor has the ability to recover that vehicle and negotiate with the lender prior to the auto being sold at auction. This assumes of course that the debtor has filed a bankruptcy and that the automatic stay has gone into effect.

One typical case that I often see is a Chapter 13 bankruptcy filing where the vehicle is repossessed pre-filing. In that case, the auto finance company is often willing to negotiate for the return of the vehicle in exchange for certain documentation. That documentation usually includes proof of auto insurance and listing the finance company as the loss payee. In addition, the auto finance company will likely want to see a copy of the proposed chapter 13 plan indicating that the secured creditor is listed at the proper dollar amount at the proper interest rate. If all of those items could be shown, the auto lender is very likely to return the vehicle to the debtor without the debtor having to file an adversarial complaint in the bankruptcy court to recover the vehicle.

In a Chapter 7 case, whether not the debtor can recover the vehicle has to do with whether or not the debtor is current on the payments and/or can become current. If the debtor is behind on a vehicle in a Chapter 7 and the vehicle is repossessed pre-petition, the lender will simply bring a motion to modify the automatic stay, which will allow that lender to be able to keep the vehicle from the debtor. The debtor always has the ability to come up with the past due amount and become current to recover the vehicle, prior to the vehicle being sold at auction. The most important question that the Chapter 7 debtor needs to ask himself, is can I get current on that vehicle to the point where I can reaffirm the debt on that vehicle, continue to make monthly payments on time going forward, and maintain ownership of the vehicle. If the answer to any of those questions is, no, it really makes sense to surrender that vehicle back to the lender, because eventually the lender is going to move to modify the stay and repossess the vehicle down the road.

Additionally, if the debtor agrees to reaffirm the debt, and that it is subsequently repossessed post-petition, the debtor may in fact be on the hook for the rest of the balance or a deficiency on that vehicle unless the reaffirmation agreement can be rescinded in time.

Most people do not like to give up their autos. There is a pride factor, there is a love of the auto factor there is a transportation factor. The reality is this, if you cannot afford that vehicle, let it go. Do not reaffirm, do not stretch to fight to save the vehicle that you don’t have the ability to pay going forward. Maybe your economic circumstances have not changed since the bankruptcy filing. Maybe you really didn’t have the ability to afford that vehicle before the case was filed. These are all factors that a debtor must consider before agreeing to reaffirm a debt either under Chapter 7 or fighting to get the vehicle back and repaying it over time through a Chapter 13 bankruptcy case.

David M. Siegel is the author of Chapter 7 Success: The Complete Guide to Surviving Personal Bankruptcy. He is a member of the American Bankruptcy Institute and currently practices bankruptcy law in Chicago and its surrounding suburbs. Additional information is available at http://www.bankruptcy-lawyers-sanantonio.com .