Blog Posts

Proactive Creditors Can Prevent Debts Being Discharged in Bankruptcy

5/4/2020

Author: Spiros Avramidis

Most individual debtors file bankruptcy expecting to discharge most, if not all, of their debts. There is, however, no absolute right to receive a discharge. Although a general discharge is granted in most filed cases, all debts are not necessarily discharged. Some debts cannot be discharged statutorily under Section 523. In those instances the creditor need not take any action. Certain other debts described in Section 523 are excepted from discharge, but only if the creditor brings a timely law suit—called an adversary proceeding—against the debtor. The lawsuit will seek a ruling from the court that the debt should not be discharged. A creditor with such a claim should be aware of their right to challenge discharge of their claim.

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Difficult Decisions for Business Owners in the Age of the Pandemic

4/28/2020

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Author: Andrew M. Thaler

In the age of the pandemic, the only certainty for businesses is that there will be uncertainty until there is certainty. That sounds like an absurd riddle but it is true. Consider what is now on the plate of the small business owner. If application was made for a Payment Protection Program loan (“PPP”) but awaits approval, will it ever be funded? In the meanwhile should employers lay people off or reduce salaries? If employees are laid off will they come back to work when things settle down? What is the likelihood of employees coming back to work if they can make more money from unemployment benefits than their regular pay? Do employees not return because of fear of exposure to the virus at work? If a PPP loan is obtained, will at least 75% of the loan be utilized for payroll and approved expenses such that the loan will be forgiven?

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COVID-19 and Personal Bankruptcy for Small Business Owners

4/17/2020

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Author: Andrew M. Thaler

Most small business owners unavoidably have to either incur business debt in their own name (think of an American Express Card) or personally guarantee business debt. The Coronavirus has had a devastating effect on small business. Many small businesses will simply not be able to weather the storm and survive. In this scenario, an inability of non-operating companies to pay its debts will leave small business owners with personal liability on business debt. Now is the time to educate oneself on personal bankruptcy because if an individual has more business than consumer debt, they may be exempt from chapter 7 bankruptcy’s rigorous Means Test and, instead, subject only to a more flexible and forgiving budget test.

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The CARES Act Provides Bankruptcy Relief to Individuals and Businesses

3/31/2020

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Authors: Andrew M. Thaler & Spiros Avramidis

The Coronavirus pandemic has and will continue to cause financial hardship for many individuals and businesses in the weeks and months ahead. The Coronavirus Aid, Relief and Economic Security Act known as the “CARES Act”, which was recently passed into law by Congress, provides financially distressed consumers and small businesses greater access to bankruptcy relief. Major takeaways from the CARES Act include:

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Strategic Planning when Confronted with Overwhelming Debt: Part 1

3/3/2020

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Author: Andrew M. Thaler

Faced with a problem, the stress of not knowing what to do can be debilitating and result in procrastination and indecision. In the world of debt, knowledge is power. An understanding of debtor and creditor rights enables one to not only know what is likely to happen in the future but to take proactive measures to alter, to your benefit, what might otherwise happen if nothing is done. Developing a strategy to tackle worrying debt can lead to a fresh start, and financial stability. On the other hand, putting one’s head in the sand is usually a poor option because doing nothing leaves everything to chance.

The first step is to identify that there is a problem. The second step is to deal with the problem head on by getting proper and timely advice on how to solve the problem. Unfortunately many people wait too long, or never seek the advice they need in order to make good life choices. As they say, an ounce of prevention is worth a pound of cure. This is the first in a series of articles that illustrate how having pertinent knowledge can drastically affect the outcome.

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