Will I lose my assets if I file for bankruptcy?
When an individual or married couple files for bankruptcy relief, all of their assets become property of the bankruptcy estate. Before any assets can be administered by the court, the person(s) filing for bankruptcy relief are entitled to exempt (or withdraw from the bankruptcy estate) certain assets. Through careful pre-bankruptcy planning, we can minimize or eliminate entirely the risk that any assets will be lost by virtue of a bankruptcy filing
Should I file for bankruptcy now or later?
The decision of whether or not to file a bankruptcy case is a serious one. Often we find other solutions to a client’s problem. As experienced bankruptcy attorneys, a bankruptcy filing is only one of the tools in our toolbox. There are occasions when bankruptcy is the right tool.
Once it becomes clear that a bankruptcy filing should take place, the question of the best time to file arises. We carefully assess all factual and legal issues of each client on a case-by-case basis in order to ensure the best outcome. Because of this careful approach, our clients are not unpleasantly surprised: our clients do not lose assets in a bankruptcy cases unless the client knew in advance of the possibility and decided to proceed in any event..
Will filing a bankruptcy affect my credit rating?
Of course, the answer to this question is yes. A bankruptcy filing is a derogatory credit item. Nearly all people who consult a bankruptcy lawyer already have significant amounts of debt and are well behind on their obligations, or have judgments or tax liens recorded against them. As a result, their credit rating is already low or will soon be affected by imminent default to their creditors. It is unlikely that any lender or leasing company will advance credit to such people due to their current financial circumstances. There are many more important factors, such as future savings, retirement planning, and current credit issues, about which we consult with our clients.
How long will a bankruptcy show on my credit report?
We are not specialists in consumer credit issues or credit ratings. Experts in this area have advised us that the rule is between 7 and 10 years. We recommend to clients that they consider that their credit will be impaired for 10 years. We can suggest ways that clients can begin to rehabilitate their credit immediately after the bankruptcy filing.
Can I still operate my business in bankruptcy?
The answer depends upon which type of bankruptcy you file. Chapter 11 of the Bankruptcy Code enables business operations to continue after the bankruptcy is filed. Chapter 11 is available to individuals and to businesses.
The Law Offices of Leslie Richards has experience and expertise in filing Chapter 11 for individuals as well as for businesses. Chapter 11 is most appropriate for individuals who have significant debt problems but also have significant equity in assets, such as their home or their business, which they wish to preserve. For businesses, Chapter 11 is intended to enable a transition from pre- to post-bankruptcy operations, though special financial reporting is required of businesses in Chapter 11. Essentially, they are required to provide a profit/loss statement and cash report each month. Because a business in bankruptcy does not pay its pre-bankruptcy creditors until the court permits it to do so (typically many, many months later), cash flow often improves immediately. In Chapter 7, a business is liquidated and operations do not continue.
How will bankruptcy affect my business?
Trade creditors are often less willing to provide credit to a company once a bankruptcy is filed, though this is not a blanket rule. Often, trade creditors are willing to provide new credit because they are entitled to priority status as a result of post-bankruptcy sales. We have devised strategies designed to help maintain relationships with suppliers. A company in Chapter 11 bankruptcy has additional administrative tasks, such as the opening of new bank accounts and the providing on a monthly basis of a profit and loss statement and cash report to the Office of the United States Trustee. Of course, there is also the burden imposed as a result of legal fees incurred in connection with a Chapter 11 case. Our firm has devised a creative way of easing this burden for our clients.
What are my rights if a tenant files for bankruptcy?
If a tenant files for bankruptcy, you are generally entitled to the tenant’s full performance under the lease. However, the bankruptcy filing completely changes your ability to enforce your rights. As an example, you may not undertake any enforcement action for breaches in the lease without the express permission of the bankruptcy court – this includes the commencement of an unlawful detainer action. Landlords are well advised to contact a bankruptcy attorney immediately upon learning that a tenant has filed for bankruptcy relief. Through early intervention, the landlord is often able to better protect his or her rights. It is important for an attorney to monitor the bankruptcy case closely, to meet all applicable deadlines and timely file a proof of claim.
Senior Litigating Attorney
Esquire Senior Litigation Attorney
For than 30 years, the Law Offices of Leslie Richards, P.C. has been providing individuals and small-to-medium size business owners with experienced legal counsel.
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