Tag: Business Bankruptcy

Business Bankruptcy

6 Steps to Returning to the Business World After Bankruptcy

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After a bankruptcy case, the idea of returning to the business world can seem like a pipe dream or a near impossibility. While a bankruptcy case can certainly put a dent in an individual’s credit, it should not hinder that person from successfully starting a business or returning to an already-existing business.

The good news is succeeding in business after a bankruptcy can be and has been done. Many entrepreneurs have gone through personal bankruptcy and come back stronger and better. Several well-known companies, such as General Motors (GM) or Delta Airlines have filed for bankruptcy only to restructure their businesses and rebuild their brands successfully. The following tips can help an individual or business recover after filing bankruptcy.

Business Bankruptcy, COVID-19

Stimulus Relief Fails to Save Hundreds of Businesses

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The financial ramifications of the COVID-19 pandemic have been significant for countless businesses throughout the United States.  At the start of the pandemic, federal stimulus funds were issued in various forms to help businesses survive the economic crisis. However, as the virus continues, many of these businesses are being forced to close.  

According to a Wall Street Journal analysis of legal filings and government data, over 300 U.S. companies that received approximately half a billion dollars in stimulus relief have also filed for bankruptcy this year. These 300 companies employ a total of 23,400 workers who are being adversely affected.  

Bankruptcy Law, Business Bankruptcy

Cheesecake Factory, Dave & Busters & Outback Steakhouse Facing Bankruptcy

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The coronavirus (COVID-19) pandemic has hit countless businesses hard, but the restaurant industry has been hit particularly hard.  According to a recent report from S&P Global, some popular large chain restaurants have made the list of businesses struggling to stay afloat.

Three restaurants are going through serious financial difficulties, namely the Cheesecake Factory, Dave & Busters and Bloomin’ Brands, the parent company of Outback Steakhouse.

Bankruptcy Law

Retailers and U.S. Businesses that Filed for Bankruptcy in 2019

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This past year was not a profitable one for a number of U.S. businesses and retailers, resulting in many of them filing for bankruptcy in 2019. These businesses ranged from brick-and-mortar companies to online stores, and by the end of the year, more than 7,000 stores closed nationwide. Some of the well-known ones include:

Barneys New York

The luxury department store filed for bankruptcy in August 2019, which came as a surprise to many since the business has been running for a century and has survived many financial ups and downs. However, after filing for bankruptcy this summer, the company was purchased by Authentic Brands Group, a company that also owns Nine West. Authentic Brands will be licensing the Barneys New York product to Sakes Fifth Avenue, and B. Riley Financial has also purchased remaining company assets in November 2019. B. Riley intends to take Barneys’ luxury products and sell them at much lower price points through private sales.

Bankruptcy Law, Debt Relief

How Small Business Owners Can Protect Assets in Bankruptcy

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Many business owners worry about what will happen to their companies and their business assets when facing bankruptcy or a lawsuit. It is important for any business owner that he or she creates an asset protection plan for these exact types of situations.

The first step is to develop a debt management plan for the business. Having debt is not always a bad thing. The key is to manage the debt in an intelligent manner to stay out of trouble.  Business loans will usually involve offering business assets as collateral, which means that if the business owner ends up defaulting on the loan, the lender can seize the collateral to pay the debt. Some lenders will require borrowers to sign a personal guarantee if the collateral is not enough to cover the debt.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Which Business Debts Are Discharged in a Chapter 7 Bankruptcy?

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If you are struggling to pay off business debts, filing for bankruptcy can help.  A bankruptcy is not just a way to liquidate a business, it can serve as a way for you to keep your doors open while you reorganize and regroup.  Business owners can file for Chapter 7, Chapter 11 or Chapter 13 bankruptcy.  You may have questions about what types of business debts can be discharged in an individual Chapter 7 bankruptcy case. It depends ultimately on the type of business as well as the debt.

The types of debts that can be discharged in a Chapter 7 bankruptcy case include:

  • Unsecured debts, such as credit card bills or medical bills;
  • Some legal judgments;
  • Unsecured debts owned by a sole proprietor;
  • Obligations included under a lease or contract that were entered into by a sole proprietor, including commercial and residential property leases or equipment rental leases; and
  • Personal loans or promissory notes.

This list of debts includes only unsecured debts, meaning these debts are not connected to collateral or a piece of property. Secured debts are handled under different rules and require other considerations and depend on other factors, including whether a deficiency between what the property is worth and the amount that is owed on the property exists.

If your business is a sole proprietorship, you and your business are treated equally, which means that any unsecured debt that was obtained under the sole proprietorship can be discharged through a Chapter 7 bankruptcy case. If the business owes on a secured debt, this secured debt will be treated just as it would be treated in an individual bankruptcy filing.

If the business is a partnership, it is considered a separate legal entity. If the partnership files for bankruptcy, no discharge exists for the business debt. Normally the bankruptcy trustee will close and liquidate the business, selling the business or its assets to pay off the creditors. In a general partnership, all partners are personally liable for any business debt under the partnership. If the partnership fails and the bankruptcy court must liquidate the debts of the business, if there is still money owed on the debts due to the assets not being enough to satisfy the debts, the bankruptcy trustee can go personally after the partners to satisfy any outstanding obligation. It is usually advisable for the individual partners to file for Chapter 7 bankruptcy in their own names and discharge both the personal and business debts.

If the business is a corporation, it can file for Chapter 7 but will not receive a bankruptcy discharge of the business debts. Just like a partnership, the bankruptcy trustee will close the business and liquidate it under a Chapter 7 case, using that money to pay off the outstanding obligations. However, since shareholders are normally involved in a corporation, other complications do arise when it comes to closing a corporation and paying off business debts.

Lastly, if the business is a limited liability company (LLC), the same rules apply. The LLC can be liquidated through a business bankruptcy, but the debts must be either paid through the assets of the business or the debts can be discharged through a personal bankruptcy case.

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

Related Resources: https://www.nolo.com/legal-encyclopedia/business-debts-discharged-chapter-7-bankruptcy-32415.html

Bankruptcy Law, Foreclosures, Timothy Kingcade Posts

Bankruptcy Filings Dramatically Decline in 2012

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The International News Agency, Reuters, has reported that U.S. bankruptcy filings for both consumers and businesses have dropped 14% during the first half of 2012 and are on track to reach the lowest rate since before the start of the recession in 2008.
According to statistics from Eqic Systems Inc., consumers filing for bankruptcy have fallen 13% from the first half of 2011 and businesses filing for bankruptcy have taken a 22% decline. Samuel Gerdano of the American Bankruptcy Institute attributes the decline of bankruptcy filings to new, lower interest rates. Others have attributed the decline in bankruptcy filings to the high fees charged by the courts and attorneys.
While bankruptcy filings are at a low point, several large companies have made headlines this year by filing for bankruptcy such as, Eastman Kodak Co., textbook publisher, Houghton Mifflin Harcourt Publishers Inc., and Hostess Brands Inc., the maker of Wonder Bread and Twinkies.
To read more on this story visit: http://www.chicagotribune.com/business/sns-rt-us-bankruptcy-stats-declinebre8640ub-20120705,0,6184420.story
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced 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, P.A. 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, P.A. at www.miamibankruptcy.com.