Small Business Bankruptcy Archives

What Happens If You Can’t Pay Your Business Credit Card?

Posted on January 22, 2025by Admin

If your business has fallen on hard times, and you can no longer afford to pay your business credit card, you have options. But ignoring the debt will only make matters worse.

In the perfect world, inconsistent cash flow would never be an issue for a small business. But many businesses face it, along with economic uncertainty, and inflation.

Failing to make payments on a business credit card can result in late fees, higher interest rates, and significantly damage your business and personal credit scores.

Missing payments on your business credit card can trigger a series of penalties and actions. The most severe being legal action against you and your business. Consequences for nonpayment include:

Late payment fees
Penalty annual percentage rate, or APR.
Lower credit scores (both your business and personal)
Debt collections
Lawsuits

The personal guarantee on a credit card applies to all business types, including limited liability companies, or LLCs, and corporations. The personal guarantee surpasses any limited liability protections and gives the credit card issuer the explicit right to come to you personally for payment.

The personal guarantee is typically spelled out in the terms and conditions you agree to when signing up for a business credit card. The card issuer checks your personal credit using your social security number to determine how likely you are to repay the debt, when qualifying you for the card.

If you are struggling with business credit debt, contact your card issuer as soon as possible, to minimize penalties and damage to your credit. Your card issuer may be willing to establish a payment arrangement and can inform you of available hardship programs.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

SOURCE: https://www.nerdwallet.com/article/credit-cards/business-credit-card-personal-guarantee-explained

Small Business Bankruptcy

The Future of Small Business Bankruptcy

Posted on April 13, 2022by Admin

The COVID-19 pandemic hit the nation’s economy hard, forcing many businessowners to make some tough decisions regarding their business’s future. Government stimulus efforts, as well as lower interest rates, kept many businesses afloat, which brought Chapter 11 bankruptcy filings to an all-time low.

At the same time, Subchapter V of the 2019 Small Business Reorganization Act (SRBA), opened the doors and made filing for Chapter 11 bankruptcy simpler and more streamlined for attorneys and business owners. The CARES Act temporarily also tripled the debt limit for eligible small businesses to file for bankruptcy. However, now that those measures are coming to an end, Congress has been asked to pass legislation to extend the measures, keeping the elevated limit of $7.5 million. These measures failed last week, and the limit expires as of Sunday.

Consumer Bankruptcy, Coronavirus, COVID-19, Small Business Bankruptcy

U.S. Bankruptcy Filings Drop 38 Percent

Posted on May 3, 2021by Admin

Bankruptcy filings are on the decline, according to a recent report. Statistics released by the Administrative Office of the U.S. Courts, reveal bankruptcy filings dropped 38.1 percent for the 12-month period ending March 31, 2021. This dramatic drop in filings coincides with the COVID-19 pandemic, which first disrupted the economy in March 2020.

Bankruptcy filings fell for both personal and business bankruptcies. Non-business filings fell by a total of 38.8 percent, while business filings fell 13.9 percent.

Bankruptcy Law, COVID-19, Small Business Bankruptcy

Personal and Business Bankruptcies Increase in the Month of July

Posted on August 10, 2020by Admin

The number of individuals and businesses seeking bankruptcy protection increased last month, while the coronavirus (COVID-19) pandemic continues. Financial experts have predicted this jump for months since states began to shut down in mid-March.

According to the legal-services firm, Epiq Systems Inc., the number of businesses that have filed for Chapter 11 bankruptcy increased by 52 percent when compared to July 2019. Additionally, the number of personal bankruptcy cases have gone up. The number of personal bankruptcy filings are expected to increase, when the Covid-19 economic stimulus relief is cut or reduced.

Bankruptcy Law, COVID-19, Debt Relief, Small Business Bankruptcy

How to Handle Business Bankruptcy in the Aftermath of the Coronavirus

Posted on June 15, 2020by Admin

The coronavirus (COVID-19) pandemic has hit South Florida businesses hard. Many small businesses have struggled to survive the shutdowns and drop in revenue, while others are pursuing bankruptcy as a means of remaining in operation while receiving financial assistance. For businesses who wish to make it through this time of crisis, help is available.

It has been reported that the number of businesses that filed Chapter 11 bankruptcy increased by 26 percent from the previous year, even though overall bankruptcy filings were down. These numbers are expected to continue to increase over the summer months as businesses begin to reopen.