Tag: small business bankruptcy

Business Bankruptcy, Credit Card Debt, Small Business Bankruptcy

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

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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

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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.

Business Bankruptcy, Coronavirus, COVID-19

Growing Number of Retailers and Restaurants Are Folding as the Covid-19 Pandemic Continues

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Retailers and small businesses have been hit hard by the pandemic, after facing a brutal 2019.  Now a growing number of businesses and restaurants are folding, as Covid-19 continues to wreak havoc on the retail, restuarant industry and the global economy.

Here are the latest ‘big-name’ companies to file bankruptcy since mid-March.

Ruby Tuesday is the most recent restaurant to file for Chapter 11 bankruptcy.  It will permanently close 185 restaurants while it restructures.

Bankruptcy Law, Coronavirus, COVID-19

Bankruptcy and the Coronavirus: Help for Florida Small Businesses

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The coronavirus (COVID-19) pandemic has been hard on businesses. During the shutdown, countless South Florida businesses were forced to shutter or adjust to a new normal, bringing in significantly less income than before. Many of these business owners have also been compelled to make some tough decisions, including the decision on whether to proceed with bankruptcy.

Bankruptcy can be beneficial for businesses that are struggling during this difficult time. The bankruptcy framework and the automatic stay that occurs immediately upon filing for bankruptcy offers relief that individuals and business owners desperately need.

Bankruptcy Law

New Bankruptcy Law Takes Effect Benefiting Small Businesses

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For the most part, business bankruptcy, also known as Chapter 11 Bankruptcy, has not been a viable option for most struggling small businesses. The process can be long and complicated, and the costs associated with filing under Chapter 11 of the U.S. Bankruptcy Code have kept most small businesses out of this option, leaving them to either pursue a personal bankruptcy under Chapter 7 or Chapter 13 or to close their doors completely. However, the Small Business Reorganization Act (SBRA), which officially took effect two months ago, has taken away some of these barriers, opening the possibilities for Chapter 11 filings for small businesses.

Originally, the SBRA applied only to businesses or sole proprietors with less than $2.7 million in debt. However, when the coronavirus (COVID-19) crisis hit in March, Congress temporarily increased this debt cap to $7.5 million in debt, opening the doors to many more businesses to take advantage of the SBRA.

Bankruptcy Law, Coronavirus, COVID-19, Debt Relief

Coronavirus and the Changes it has had to the U.S. Bankruptcy Code

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The coronavirus pandemic has affected our country in so many ways. It has also affected the U.S. Bankruptcy Code, specifically through the recently passed $2.2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES Act).

Within the CARES Act were revisions to parts of the U.S. Bankruptcy Code, meant to help small businesses and consumers during this difficult time. The CARES Act amended the Small Business Reorganization Act of 2019 (SBRA), which temporarily increased the debt threshold for filing for Chapter 11 Bankruptcy relief. The debt threshold increased from $2,725,625 to $7,500,000. After one year, the threshold will go back down to the original amount.

Coronavirus, COVID-19, Debt Relief

How to Receive Financial Help During the COVID-19 Crisis

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The coronavirus (COVID-19) has hit our nation’s economy hard, with many Americans finding themselves suddenly out of work.  Countless small businesses have had to close their doors due to the spread of the coronavirus. Financial assistance is available during the COVID-19 crisis.

A record number of American workers filed for unemployment last week, which totaled 3.28 million people. The biggest form of financial help comes in the form of a recent $2.2 trillion stimulus package passed by Congress just last week. President Trump signed the stimulus bill into law on March 27, 2020.

Bankruptcy Law

New Bankruptcy Laws Offer Relief for Veterans, Small Businesses and Farmers

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President Trump signed legislation into law on August 23, 2019, that offers bankruptcy relief that will benefit veterans, small business owners and farmers. Now that these changes are being implemented, they will have long-lasting, positive effects when it comes to access to bankruptcy relief for these individuals.

The first piece of legislation is the Family Farmer Relief Act of 2019. It doubles the debt ceiling allowed under the Bankruptcy Code for a “family farmer.”  This relief increases the number of farmers eligible to receive relief under Chapter 12 reorganization bankruptcy, which is a special form of bankruptcy that is designed to meet the needs of farmers facing financial difficulty.