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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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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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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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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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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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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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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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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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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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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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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A Connecticut nursing home petitioned the courts seeking Chapter 11 bankruptcy protection, after losing a case against in Supreme Court, as reported by Stamford Advocates in a February 25, 2013 online news article. The case was brought against the nursing home by five union representatives who sought to reinstate terms that were negotiated by the…

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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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Even media companies are significantly suffering financially. According to a March 27, 2013 Huffington Post article CommonSense Media filed for a Chapter 7 bankruptcy. The company, located in Washington D.C. petitioned the courts seeking to liquidate its assets. The media company, originally founded in 2007, works to publish and advertise via digital media. The media…

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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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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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With the bankruptcy court’s permission the Hostess Brands Inc. will now continue to auction off several of their brands, which includes their Twinkies brand and Wonder Bread. According to a February 11, 2013 Reuters online article, Hostess will begin to sell off selected assets by a bankruptcy trustee to help pay down the company’s debt.…

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General Motors Company will soon receive a judgment on their 2009 government-led restructuring. The GM is facing the possibility of having to pay nearly $1 billion, as reported by Reuters in a January 3, 2013 Huffington Post news article. The U.S. Bankruptcy Judge, Robert Gerber, will be deciding whether the restructure that caused a “lock-up…

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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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