Can a Bankruptcy Filing Help You Save a Business?

Can a Bankruptcy Filing Help You Save a Business?

If your business is facing hard times, you may be inclined to shut it down, declare bankruptcy and give your creditors what you can. But bankruptcy can often be a way to save a business, particularly if the market’s starting to turn and you just need some time to get into the black. A Chapter 11 bankruptcy petition can do more than simply make your monthly payments more affordable. It can buy you that precious time without a lot of cash going out, where you can finally right the ship.

The Benefits of a Chapter 11 Bankruptcy Filing

When you seek to reorganize your business debt under Chapter 11, you’ll get the immediate and immense benefit of the automatic stay. The automatic stay prevents creditors from calling, writing or taking legal action to collect on any debt, other than through the bankruptcy process. You won’t have to deal with continual calls or threatening letters, and all legal proceedings will be suspended until your bankruptcy filing is complete.

In addition, once you file for Chapter 11 protection, you’ll have a certain amount of time to work out new payment arrangements with all of your creditors. Often, you can negotiate new arrangements that involve the waiving of fees and penalties, and work out payments that significantly reduce your monthly outflow.

You’ll usually be allowed to continue regular business operations while in Chapter 11, but you will have some restrictions on business activity without permission of the bankruptcy trustee or the court. For example, you may be prohibited from taking on new debt or buying or selling certain assets without the approval of the bankruptcy court.

It is never too early to consider these options. Chapter 11 is risky and expensive but may well be worth it. A high percentage of small businesses in Chapter 11 will fail, but with proper advance planning, the chances of success are much higher.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, weprovide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Will a Bankruptcy Filing Make It More Difficult to Earn a Living?

Will a Bankruptcy Filing Make It More Difficult to Earn a Living?

If you have been struggling to make ends meet, you may have been reluctant to seek protection in bankruptcy because you’re afraid it will either put your job at risk, or make it difficult for you to find employment in your chosen field. It’s an important question to address—can your employer take any action against you for filing for personal bankruptcy protection? Can a prospective employer disqualify you because you have a prior bankruptcy filing?

Your Current Job

The bankruptcy laws do not allow an employer to take any type of retaliatory action against an employee because of a personal bankruptcy filing. Accordingly, you can’t be fired, demoted, transferred or incur the change or denial of benefits of privileges because you file for bankruptcy. There are no exceptions—it doesn’t matter if you work in a top secret job, as a trust officer or a construction worker. In fact, you may be at greater risk if you don’t seek bankruptcy protection. Workers in sensitive positions who have financial problems are generally considered more likely to be susceptible to blackmail than workers who have sought bankruptcy protection. This is an area, however, where you have to handle it correctly with your employer to minimize problems.

These rules only apply, though, to actions that take place after a bankruptcy filing. If you have been notified of an impending change in employment status, including termination, before filing for bankruptcy, the bankruptcy laws won’t prevent such change.

Future Employment Opportunities

While private employers are free to exclude candidates who have filed for bankruptcy, state, local and federal governments and agencies cannot discriminate in hiring because of a bankruptcy filing. Even with private employment, a proper approach with the guidance of an experienced attorney can make all the difference. We have many clients who have found jobs after a bankruptcy.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, weknow that the bankruptcy process can be intimidating and confusing. Weoffer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Can I Save My Home from Foreclosure with a Bankruptcy Filing?

Bankruptcy Filing

If you are behind in your mortgage payments and fear that a foreclosure proceeding may be imminent, or if you are already facing foreclosure action, you may be considering filing for bankruptcy protection, so that you can save your home. It’s more than a question of if you can save your home, though. You also want to consider whether it’s in your best interests to try to save your home. Here are some factors to consider.

A Bankruptcy Filing Will Suspend a Foreclosure Action

You can temporarily suspend all legal action, including foreclosure proceedings, by filing for bankruptcy protection. With a Chapter 7, you can often keep a certain amount of equity in your home while forfeiting other assets, but you won’t be able to keep your home and discharge the mortgage. With a Chapter 13, you can restructure payments on your home to make them more affordable.

Reasons For and Against Trying to Save Your Home from Foreclosure

The first question you need to ask yourself is whether or not you can realistically afford your home. If not, there’s no point in trying to save it. You’ll be better suited by trying to sell it for fair market value, even if that’s less than what you owe. In such a situation, you may be able to dispose of the property through a short sale. This will discharge any remaining liability for mortgage payments, but may cause you to recognize income on your taxes, though the Foreclosure Tax Relief Act may minimize the impact.

If you have equity in the home, though, it may be a good idea to try to save it. If you file bankruptcy and discharge other debts, you may be able to bring your mortgage current and keep it that way, provided you don’t incur new debt.

Another question to ask yourself—is it more important that you have reliable transportation or that you have a nice home. If you work from home, transportation is not as important, but if you need a vehicle to get to your job, you may be better off downsizing your living arrangement.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know that the bankruptcy process can be intimidating and confusing. We offer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

What to Do If You Have Been Sued on a Fraudulent Transfer

Fraudulent Transfer

Under the federal bankruptcy laws, there are very tight restrictions on the transfer of property, both before and after you file. If the bankruptcy court determines that you improperly conveyed property to keep it out of your bankruptcy estate, you could face legal action alleging fraudulent transfer, a form of bankruptcy fraud. What should you do if you are sued for fraudulent transfer?

First and foremost, don’t ignore or minimize the seriousness of an allegation of wrongful transfer. Start by gathering all the documentation you have related to the item or transfer in question. Find anything that confirms when the item as transferred, why the transfer was made, and what the perceived value of the item was at the time of transfer.

It’s not uncommon for people to make transfers without knowing what they are doing. The key, with respect to fraudulent transfers, is that they require intent. If you can demonstrate to the court that you had no knowledge that your transfer was wrongful, or you had no intent to hide assets or wrongfully keep assets out of the hands of creditors, the transfer may not be considered fraudulent. The court may still have the power to recover the asset, but you won’t be personally liable.

Another situation where you may avoid liability is where there’s no perceived value in the property. For example, if you have a home that has no equity, a court may rule that there’s no fraudulent transfer as there was nothing of value for a creditor.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Recognized Quality & Experience