The Sader Law Firm Attorneys Explain the Benefits of Bankruptcy
Bankruptcy provides benefits that individuals and businesses should consider.
Kansas City, MO, August 26, 2020 --(PR.com)-- The spread of the novel coronavirus (SARS-CoV-2) has caused widespread economic disruption across the country. As of early July, more than 51 million Americans filed for unemployment and numerous brand-name stores filed Chapter 11 bankruptcy cases. GNC, Chuck E. Cheese, California Pizza Kitchen and 24-Hour Fitness have all filed for Chapter 11 bankruptcy in recent months.
On July 30, the U.S. Department of Commerce announced a 32.9% drop in GDP during the second quarter.
The economic situation is dire for workers across the country. Many U.S. workers who suffered pay cuts or lost their jobs are potentially facing evictions, foreclosures and other property seizures depending on the outcome of federal relief legislation. The United States has not seen an economic crisis this severe since the Great Depression almost 100 years ago.
Bankruptcy cases are likely to increase in the near future for individuals and businesses. However, bankruptcy provides benefits that individuals and businesses should consider. Below, the bankruptcy attorneys at The Sader Law Firm discuss what business owners and individuals should know about filing for bankruptcy during the pandemic.
- Chapter 11 Bankruptcy Does Not Mean A Business Is Closing Its Doors -
There is a misconception that Chapter 11 bankruptcy means a business is closing its doors forever. History tells us this assumption is false. There are numerous cases of businesses, some of which are very well-known, that bounced back from Chapter 11 bankruptcy. Marvel Entertainment and Colt Manufacturing Company are examples.
Chapter 11 bankruptcy can grant business owners a lifeline during their most desperate times. Businesses that file for Chapter 11 bankruptcy can prevent creditors from seizing important assets. Specifically, Chapter 11 bankruptcy’s automatic stay prevents creditor collection actions, including lawsuits, wage garnishments, bank levies, foreclosures and repossessions.
Additionally, businesses may continue operations and can restructure cumbersome debts. Chapter 11 bankruptcy allows businesses to reduce debts, increase cash flow and protect employees.
Small businesses may also have an easier time taking advantage of the benefits Chapter 11 provides. In 2019, the Small Business Reorganization Act (SBRA) added a new Subchapter V to Chapter 11 of the Bankruptcy Code. Subchapter V streamlines the bankruptcy process for small businesses. The CARES Act, which provides financial relief for businesses and individuals, expanded access to Subchapter V for small businesses.
Depending on the circumstances, struggling restaurants, retail outlets, oil and gas companies, hotels, motels, transportation companies and logistics companies should consider taking advantage of Chapter 11 bankruptcy.
- Chapter 7 Bankruptcy Does Not Mean Losing Everything -
Much like Chapter 11 bankruptcy, there are misconceptions about Chapter 7 bankruptcy. Many people filing can take advantage of bankruptcy exemptions for certain assets and properties. When an asset or property is exempt, it is not included in the bankruptcy estate. This means filers get to keep exempt assets and properties after filing for Chapter 7 bankruptcy.
Chapter 7 bankruptcy throws struggling debtors a lifeline by discharging debts and preventing creditors from carrying out collection activities.
- Chapter 13 Bankruptcy Can Save Assets -
Chapter 13 bankruptcy is another possible option for individuals who want to save important assets and receive a fresh start on their finances.
There is a major difference between Chapter 7 and Chapter 13 bankruptcy. With a Chapter 13 bankruptcy, a portion of debts are repaid through a three to five-year repayment plan. Creditors cannot seize wages or assets while the automatic stay is in place. Filers could use Chapter 13 bankruptcy to prevent foreclosure and keep vehicles.
However, a filer must have income to satisfy the requirements of the repayment plan. The income does not necessarily have to come from a job.
- Bankruptcy Courts Are Open During The Pandemic -
Many well-known companies filed Chapter 11 cases despite the spread of the novel coronavirus and the resulting shutdowns. The bankruptcy filing system remains in place for individuals and businesses during the pandemic.
However, depending on where cases are filed, the bankruptcy process may be different. Meetings pertaining to cases may not take place in person. For meetings that take place in person, courts may have certain requirements to reduce the spread of the novel coronavirus. Filers should continue to meet payment and filing deadlines.
About The Sader Law Firm
The Sader Law Firm is a Kansas City bankruptcy law firm. Neil Sader, the founder of The Sader Law Firm, has extensive experience helping individuals and businesses find effective options for debt relief.
On July 30, the U.S. Department of Commerce announced a 32.9% drop in GDP during the second quarter.
The economic situation is dire for workers across the country. Many U.S. workers who suffered pay cuts or lost their jobs are potentially facing evictions, foreclosures and other property seizures depending on the outcome of federal relief legislation. The United States has not seen an economic crisis this severe since the Great Depression almost 100 years ago.
Bankruptcy cases are likely to increase in the near future for individuals and businesses. However, bankruptcy provides benefits that individuals and businesses should consider. Below, the bankruptcy attorneys at The Sader Law Firm discuss what business owners and individuals should know about filing for bankruptcy during the pandemic.
- Chapter 11 Bankruptcy Does Not Mean A Business Is Closing Its Doors -
There is a misconception that Chapter 11 bankruptcy means a business is closing its doors forever. History tells us this assumption is false. There are numerous cases of businesses, some of which are very well-known, that bounced back from Chapter 11 bankruptcy. Marvel Entertainment and Colt Manufacturing Company are examples.
Chapter 11 bankruptcy can grant business owners a lifeline during their most desperate times. Businesses that file for Chapter 11 bankruptcy can prevent creditors from seizing important assets. Specifically, Chapter 11 bankruptcy’s automatic stay prevents creditor collection actions, including lawsuits, wage garnishments, bank levies, foreclosures and repossessions.
Additionally, businesses may continue operations and can restructure cumbersome debts. Chapter 11 bankruptcy allows businesses to reduce debts, increase cash flow and protect employees.
Small businesses may also have an easier time taking advantage of the benefits Chapter 11 provides. In 2019, the Small Business Reorganization Act (SBRA) added a new Subchapter V to Chapter 11 of the Bankruptcy Code. Subchapter V streamlines the bankruptcy process for small businesses. The CARES Act, which provides financial relief for businesses and individuals, expanded access to Subchapter V for small businesses.
Depending on the circumstances, struggling restaurants, retail outlets, oil and gas companies, hotels, motels, transportation companies and logistics companies should consider taking advantage of Chapter 11 bankruptcy.
- Chapter 7 Bankruptcy Does Not Mean Losing Everything -
Much like Chapter 11 bankruptcy, there are misconceptions about Chapter 7 bankruptcy. Many people filing can take advantage of bankruptcy exemptions for certain assets and properties. When an asset or property is exempt, it is not included in the bankruptcy estate. This means filers get to keep exempt assets and properties after filing for Chapter 7 bankruptcy.
Chapter 7 bankruptcy throws struggling debtors a lifeline by discharging debts and preventing creditors from carrying out collection activities.
- Chapter 13 Bankruptcy Can Save Assets -
Chapter 13 bankruptcy is another possible option for individuals who want to save important assets and receive a fresh start on their finances.
There is a major difference between Chapter 7 and Chapter 13 bankruptcy. With a Chapter 13 bankruptcy, a portion of debts are repaid through a three to five-year repayment plan. Creditors cannot seize wages or assets while the automatic stay is in place. Filers could use Chapter 13 bankruptcy to prevent foreclosure and keep vehicles.
However, a filer must have income to satisfy the requirements of the repayment plan. The income does not necessarily have to come from a job.
- Bankruptcy Courts Are Open During The Pandemic -
Many well-known companies filed Chapter 11 cases despite the spread of the novel coronavirus and the resulting shutdowns. The bankruptcy filing system remains in place for individuals and businesses during the pandemic.
However, depending on where cases are filed, the bankruptcy process may be different. Meetings pertaining to cases may not take place in person. For meetings that take place in person, courts may have certain requirements to reduce the spread of the novel coronavirus. Filers should continue to meet payment and filing deadlines.
About The Sader Law Firm
The Sader Law Firm is a Kansas City bankruptcy law firm. Neil Sader, the founder of The Sader Law Firm, has extensive experience helping individuals and businesses find effective options for debt relief.
Contact
MediaSmack
Zach Thompson
(888) 530-2935
https://www.mediasmack.com/
Zach Thompson
(888) 530-2935
https://www.mediasmack.com/
Contact
Categories