Can I Be Turned Down For Bankruptcy?  A client asked me recently, “Can I be turned down for a bankruptcy?” That’s a maybe.   How it works First, you answer all the questions honestly and you provide all the documents to your lawyer. The lawyer prepares the petition, and you fill it out and sign…

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Last March, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law to mitigate the economic effect of COVID-19 on U.S. residents. It included temporary modifications of the U.S. Bankruptcy Code, which are summarized below. Some federal income is excluded from the “income” definition Traditionally, courts have looked at your disposable…

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When you file for bankruptcy in New York, your debts will become creditor claims. Under bankruptcy law, they are divided into two categories: secured vs. unsecured and, within the latter, priority vs. non-priority. These distinctions dictate which ones get paid first and which ones get paid at all. What are secured claims? Secured debts are…

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To most of us, social media accounts are recreational tools used to share life updates, photos, opinions, and other social commentaries. However, if you are a New York business owner declaring bankruptcy, then the Facebook, Twitter, and Instagram photos you use to advertise your products and services can be considered assets. In May 2015, a…

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You may have filed for Chapter 7 because you lost your job or had your hours cut back at work and couldn’t find suitable replacement employment. Now you’re thinking about taking your financial future into your own hands by starting a new business. While there is technically nothing stopping you from becoming an entrepreneur after…

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You’ve heard about how bad faith on the part of a debtor can impact their bankruptcy filing. When they are motivated by anything other than unmanageable debt and the desire to start over, the court can dismiss their case. However, there are also cases where creditors can act in bad faith, particularly when they force…

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When you think of bankruptcy, you probably imagine an indebted person or business owner visiting a bankruptcy attorney’s office and filing a chapter that is best suited to their circumstances. While this is the most common way to file, it’s not the only one. There are actually two types of bankruptcy in New York: voluntary…

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When two or more people agree to go into business together and do not establish themselves as a corporation, limited liability partnership (LLP), the result is a general partnership. Each partner is personally responsible for all debt arising from the partnership, meaning that if the new enterprise defaults on any of its obligations, creditors can…

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When you start your own business, you’re excited about the future possibilities. Ideally, it will be a success that allows you to support your family and even your future generations. Unfortunately, not every small business meets with success. Debt such as commercial leases, supplier contracts, and business loans can exceed income until bankruptcy is the…

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If you own a New York LLC, you are likely wondering how it will be affected by a Chapter 7 filing. If you are a single-member LLC, will you have to shut the business down? What about the other members if you are part of a multi-member LLC? Like corporations, LLCs are separate legal entities…

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Many New Yorkers who start their own businesses, alone or with someone else, choose to incorporate. Their personal assets are differentiated from the company’s, offering greater protection, banks are more receptive to lending money to incorporated businesses, and having “Inc.” or “Corp” after the company name enhances credibility and opens up more opportunities. When an…

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The Japanese company behind one of the worst automobile safety scandals has filed for bankruptcy. Airbags have been instrumental in minimizing the injuries of automobile drivers and passengers, but once the danger presented by Takata airbags became known, the National Highway Traffic Safety Administration (NHTSA), the federal agency responsible for automotive safety in the United…

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Hounded by creditors and low on financial resources, Puerto Rico recently filed a Title III petition in federal court. This is apparently the first time that an American state or territory has sought this type of relief from a crushing debt load (in this instance, $74 billion to creditors and over $40 billion in pension…

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You started your small business with the best intentions, but thanks to a competitive marketplace, reduced consumer spending, and difficult economic climate, the once-promising venture is now drowning in debt. Could bankruptcy—specifically, Chapter 7—resolve your difficulties? It’s possible, but it also depends. What type of business is it? Chapter 7 bankruptcy will only eliminate dischargeable…

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When homeowners experience financial difficulties, meeting their mortgage obligations may eventually become impossible. For many of them, bankruptcy is an opportunity to get a fresh start by discharging all non-exempt debts or organizing them into an affordable payment plan. Each type of bankruptcy treats mortgage debt differently, however, so it is important to evaluate all…

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Chapter 13 has often been referred to as a wage earner’s bankruptcy plan, because those who file must earn a regular income and be able to prove to the court that they can repay some or all of their debts. Unlike Chapter 7, which can eliminate credit card bills, unpaid medical accounts, outstanding utility balances,…

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Chapter 11 bankruptcy is usually filed by financially-troubled businesses. These companies, which are forced to seek help in the bankruptcy courts, run the gamut from small neighborhood stores to mega-corporations like United Airlines and General Motors. Under Chapter 11, the indebted company’s assets, debts, and business affairs are reorganized in a court-approved plan. These plans…

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Puerto Rico is dealing with large amounts of public debt. The island has racked up debt over many years and the Supreme Court recently heard a case dealing with the issue of the bankruptcy and debt according to a March 22, 2016 New York Times article. As a territory, Puerto Rico cannot file for Chapter…

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In the State of New York, bankruptcy can be sudden or gradual. Those who have experienced a gradual transition to bankruptcy may identify with the recent case of the New York City Opera. Started in 1943 and referred to as the People Opera, for more than 70 years this New York landmark focused primarily on…

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In February, RadioShack, under crumbling sales and rising debts, filed for federal bankruptcy protection. Some conceded that the electronics store had too many locations, too small of a typical store and could not compete against online retailers that offered low-costs and convenience. Now, the nearly 100-year-old brand is trying to reemerge in a slightly new…

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The Erie Otters, a hockey team, filed Chapter 11 bankruptcy recently according to an April 8, 2015 article on GoErie.com. The team owes $4.6 million to another team, the Edmonton Oilers. The Oilers are trying to force the Otters to sell themselves in order to pay that debt. This bankruptcy would allow the Otters to…

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It has been in the news for months that RadioShack’s finances were weak. People speculated that the electronics retailer would file for bankruptcy. Those people were correct. On February 5, 2015, the company filed for Chapter 11 bankruptcy protection according to a February 9, 2015 Wall Street Journal article. The company hopes for its bankruptcy…

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You may already have heard of Binder & Binder from their television advertisements. Binder  & Binder is a Hauppauge, New York-based law firm with offices throughout the country. They employ nearly 1,000 people and handle cases related to Social Security disability and veteran’s benefits. The firm has filed for Chapter 11 bankruptcy protection in a…

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The Great Northern Paper Co. has filed for Chapter 7 bankruptcy in court in Delaware. This business, which is approximately 100 years old, used to produce paper for books, newspapers and other uses. They recently stopped operations at their last plant in Maine, according to the Portland Press Herald on September 29, 2014 and the…

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Retailer Radio Shack may be near bankruptcy according to one of its regulatory filings that hinted at such action. The store sells electronics parts such as cables and batteries as well as the electronics like phones, cameras and, of course, radios themselves. There has been evidence that the business has been trying to change in…

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In 2009, the US government bailed out the automotive industry. General Motors was one of the companies that the government helped during the financial crisis. GM became a new entity, essentially creating a “new” GM and an “old” GM in bankruptcy court. The bankruptcy settlement left pre-2009 liabilities in the “old” GM. The “new” GM is…

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Bankruptcy is usually filed by the person or entity that is unable to pay its debts, and that is looking for either a discharge of such liability or to establish some sort of a repayment plan, as per a Chapter 11 or a Chapter 13 bankruptcy respectively.  However, recently a few creditors filed a petition…

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Recently, a large amount of peanut butter was discarded at a New Mexico dump as reported by the AP in a March 28, 2014 article. This was done so that the plant that manufactured the peanut butter, Sunland Inc., could be sold faster. This peanut butter manufacturing facility is well known because it “was at…

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Creditors of a personal bankruptcy law firm, Jacoby & Meyers Bankruptcy LLP, have forced the company into involuntary Chapter 7 bankruptcy. The firm had closed itself facing financial difficulties in December 2013. The firm formed a trust that would pay out the creditors of the firm. Legal Zoom, a legal document service company, is one…

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One of the major issues in Kentucky today is whether the enactment of the Affordable Care Act (ACA) will do more harm than good? Rand Paul, who is currently one of Kentucky’s senators, does not support the Affordable Care Act. He alleges that the ACA might cause some of Kentucky’s hospitals to close down as…

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Bankruptcy cases can take a while, especially when the court has to approve the discharge and the reorganization plan under a Chapter 11 Bankruptcy filing. The law firm Dewey and LeBoeuf filed for a Chapter 11 bankruptcy two years ago. Two members, who were responsible for running the company, requested that “discovery of a trustee…

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One may think that casinos are thriving businesses today due to the millions of players that they have on a monthly basis. However, this is not true as some casinos are bringing in fewer people and with fewer people this might mean low revenue. In addition, due to the tough economic times, some people might…

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The Archdiocese of Wisconsin filed for bankruptcy about three years ago due to pending litigation regarding sexual abuse and costs that it has, as reported by ABC News in a February 13, 2014 article. The Church said it took precautions because if the Court ruled against it, it would have to compensate the plaintiffs or…

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One of Detroit’s major creditors, one of its pension funds for retired city workers, was able to reach a deal with the city of Detroit this past week, as reported by Reuters in an April 15, 2014 article. Detroit’s debt is valued at about $18 billion and, after filing for bankruptcy, it was waiting for…

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Mt. Gox, which is the Bitcoin exchange company that filed for bankruptcy a few weeks ago, might be on the road to recovery.  “A group of investors with Hollywood ties is seeking to revive bankrupt bitcoin-trading exchange Mt. Gox,” as reported by the Wall Street Journal in an April 11, 2014 article. Mt. Gox was…

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Sbarro is a famous pizza chain, and it is usually located in food courts present in malls or shopping areas. Currently Sbarro has over 800 stores nationwide. However, it decided to file for Chapter 11 bankruptcy because it was unable to manage its debt, as reported by Bloomberg News in a February 28, 2014 article.…

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Bitcoins are becoming more and more ubiquitous. While some people have no idea what they are, many people are investing in them because as of today, one bitcoin is worth about $560 dollars, as reported by Reuters in a February 28, 2014 article. Bitcoins are virtual currency and Mt. Gox, which is partially responsible for…

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General Motors (GM), a car company, recently discovered a flaw with its ignition switch and it was forced to withdraw about over one million vehicles from the market, as reported by Reuters in a March 22, 2014 article. As a result, the government is trying to determine whether it concealed the “ignition switch defect when…

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Bankruptcy is becoming more common within the restaurant arena. Recently, Quiznos which is a famous sandwich franchise, filed for a Chapter 11 bankruptcy in Delaware, since it is unable to repay its high debt and it is unable to remain in the same arena with its rivals or other restaurant chains, as reported by the…

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We have blogged extensively on the bankruptcy of American Airlines and the legal background behind its subsequent merger with US Airways. We are happy to learn that this Chapter 11 reorganization and the two airlines’ merger have been largely successfully and this blog may, in fact, be the last one on this topic. AMR, the…

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Common questions that clients filing for bankruptcy ask are about taxes, especially around this time of the year. What should I do if I owe taxes? What should I do if I expect a large refund? First thing first is to file taxes, on time–by April 15th. The Bankruptcy Tax Guide (IRS Publication 908) specifies…

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Jefferson County, which is located in the state of Alabama, filed for bankruptcy about two years ago, and it is still trying to finalize its bankruptcy plan.  As part of its bankruptcy proposal, it is planning to sell its “sewer-refinancing bonds” which is estimated to be worth about “$1.7 billion” as reported by Bloomberg News…

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Comcast, the nation’s largest cable provider, has forced Houston Regional Sports Networks LP into Chapter 11 bankruptcy, according to a February 11, 2014 Bloomberg News article. The local network televises the Astros’ baseball games. A creditor can force a debtor into bankruptcy into Chapter 7 or Chapter 11 under very specific circumstances governed by 11…

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The Roman Catholic Church in the State of Montana, recently claimed Chapter 11 bankruptcy protections as reported by NBC News in a January 31, 2014 article. The Church felt that this was a good option because this would allow the Church to reduce or eliminate the numerous lawsuits that are currently pending against its members…

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JC Penney a widely known retail chain in America that controls many stores across the nation. In addition, it has numerous shareholders, and some might have a greater stake in the company than others. Thus, these shareholders became a little weary when the talk of the town was that JC Penney might file for bankruptcy.…

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Antitrust laws The US government has antitrust acts in place to ensure that there is fair competition between businesses. This is a practice that benefits consumers. For example, if an apple grower had 100% of the market share of apples in the US, then that would be a problem because consumers would have no choices…

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American Airlines, which has merged with US Airways, has gotten the final clearance to take off from bankruptcy protection according to the New York Times in a September 12, 2013 news article The company has been under bankruptcy protection for about two years. The bankruptcy court in Manhattan has given American approval to finish the…

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Dewey & LeBoeuf had filed Chapter 11 bankruptcy but there was a magnitude of opposition to the liquidation plan as reported by the New York Law Journal. Chapter 11 offers the opportunity to restructure its debts, and is generally filed by corporations. As opposed to Chapter 7 bankruptcy, where a company goes out of business…

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Dewey and LeBoeuf, one of the largest law firms in the United States, filed for a Chapter 11 Bankruptcy in 2012. The lawyers working on the bankruptcy submitted  detailed fees incurred for the bankruptcy, and the judge held that the fees were “excessive,” as reported by the New York Law Journal in a January 28,…

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Even the gold industry is feeling the pains caused by economic hardships, according to a February 25, 2013 Bloomberg News article. Rodeo Creek Gold Inc. and three of its partnering companies filed for bankruptcy. The gold company is an international mining company that develops and works with high-quality gold properties. In the bankruptcy petition the…

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According to Thompson Reuters News and Insight in a June 6, 2013 article the city of San Bernardino and its creditors had a court date scheduled today. Calpers, its biggest creditor, was at this hearing and it argued that the city should provide more information pertaining to its financials. However, the judge did not agree…

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Many companies, counties, cities and health care facilities are facing financial problems or difficulties today. As a result, they have no other option than to file for bankruptcy. A New York City health care company, Sound Shoue Systems Inc., recently filed for bankruptcy under Chapter 11 protection as reported by Thomson Reuters News and Insight…

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Dewey & LeBoeuf was one of New York’s largest law firms and it had offices worldwide. However, it filed for bankruptcy last year in the spring and when it did so “it became the largest U.S. law firm to file for bankruptcy” as reported by Thomson Reuters News and Insight in a May 31, 2013…

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According to an April 1, 2013 NJ News article an engineering firm, Birdsall Services Group, was denied their bankruptcy petition for falsely filing. Deputy Attorney General Derek Miller argued in his court documents that the firm’s filing was an attempt to prevent prosecution of the firm’s seven current and former executives. The state’s Attorney General…

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A Miami Herald news article published on April 1, 2013 reported that GMX Resources Inc. has filed for Chapter 11 bankruptcy protection. GMX Resources Inc. is an oil and gas production company who was forced to seek financial assistance after natural gas prices hit an extreme low.  The Oklahoma company included their sister units in…

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U.S. District Courts, that is, federal courts, handle bankruptcy cases. In New York, these courts are broken into four geographical districts—the Northern, Eastern, Southern and Western districts—according to the National Archives online. According to research by a New York law firm, there are visible trends in bankruptcy filings in upstate New York, as reported by…

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Parking lots near Yankee Stadium owned by Bronx Parking Development Company are in financial trouble. The company defaulted on $240 million in bonds. The company could not keep its parking lots full, even during popular Yankee games. During an average ball game, lots were 46% full in the 2011 season and that number dropped to…

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Midwest Meat Packing Facilities filed an involuntary Chapter 7 bankruptcy in the U.S. Bankruptcy Court this month, as reported by KearneyHub.com in a March 2nd, 2013 news article. The petition revealed that the meat packing company had $4.43 million in debt this number included both secured and unsecured debt. However, the company listed their current…

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American Airlines has been under Chapter 11 bankruptcy protection since November 2011. This type of bankruptcy is often sought by corporations seeking temporary court protection from creditors and time to reorganize their company. Fodors and Air Transit World reported in January 2013 on losses by the airline as well as its efforts for success. The…

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In an effort to protect its business interest and future Atari is filing for a Chapter 11 bankruptcy, as reported in a January 22nd, 2013 NBC news article. According to the report, Atari’s parent company is filing for bankruptcy in France. To help separate their finances so that the parent company’s creditors cannot go after…

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A special pharmacy company, New England Compounding Center (NECC), has filed for Chapter 11 bankruptcy. This pharmacy was responsible for a meningitis outbreak that killed 39 and injured 600. The people affected by the outbreak received specially mixed steroid injections, which were often used as a painkiller for their backs, as reported by Thomson Reuters…

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Currently, AMR, the parent company of American Airlines is under bankruptcy protection. It has been under Chapter 11 protection for over one year—since November 2011. The company sought to save $1 billion in labor costs. It has found ways to cut these costs, but the bankruptcy has been complicated by a possible merger with US…

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Recently, the Interfaith Medical Center, has decided to file Chapter 11 bankruptcy. The New York Times, on December 2, 2012, wrote that this Brooklyn hospital has had financial problems for decades. The hospital serves the Bedford-Stuyvesant and Crown Heights neighborhoods and is having a difficult time paying its employees. Over the years, the hospital has…

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