California Bankruptcy Lawyer Blog

San Jose Bankruptcy Lawyer Talks about Bankruptcy in Other Countries.

Bankruptcy is not a concept unique to the United States, almost every modern country has some form of bankruptcy. The laws vary from country to country and it is interesting to note the subtle differences. For example, in the United States, the US Trustee’s Office is the government’s branch to analyze and control much of the bankruptcy process, although the Federal Bankruptcy Court makes any final decisions. In Australia, the US Trustee counter part is called the Insolvency and Trustee Service Australia (ITSA). People filing bankruptcy in Australia may have certain restrictions placed on them such as a need for official permission to travel overseas.

In Canada, the US Trustee counterpart is called the Superintendent of Bankruptcy. In Canada, a debtor can, in the alternative to a bankruptcy, offer a “proposal” for paying off their debt. This sounds very similar to a chapter 13 plan except because the debtor pays a “Proposal Administrator” and the creditors are barred from taking further legal action as long as the proposal is honored.

In the United Kingdom, only individuals and partnerships can file for bankruptcy, corporations must file for a liquidation or administration. In Scotland, a bankruptcy is called a sequestration. The US Trustee counterparts are called an Official Receiver or a licensed insolvency practitioner.

In Hong Kong, a bankruptcy process starts when a creditor files a Creditor’s Bankruptcy Petition against the debtor as a means to collect a debt. A debtor would have to file a Petition against themselves to start a bankruptcy on their own. A debt can also propose an Individual Voluntary Agreement which is a negotiated payment plan to avoid a bankruptcy.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy lawyers in San Mateo, Fremont, Sacramento, Roseville, San Francisco, Salinas and San Jose.

Redwood City Bankruptcy Attorney Grandmother of California Octulpets Filed for Bankruptcy Last Year

Following all the publicity regarding the birth of the octuplets in Southern California last month, it has been revealed that the mother of the children is single, divorced, and resides with her parents and her six other children. It also became known that in March 2008, the grandmother filed for bankruptcy claiming nearly $1 million in liabilities. It has been further revealed a history of financial woes, including tax liens and a foreclosure. These financial woes likely prompted the bankruptcy filing.

There are two main kinds of bankruptcy for individuals: Chapter 7 bankruptcy and Chapter 13 bankruptcy. (There are other kinds but those are reserved for special circumstances). It is unclear whether the grandmother filed for a Chapter 7 or Chapter 13. However, both types allow a debtor to stop a foreclosure, even if the ultimate solution is for the property to be surrendered in the bankruptcy.

Additionally, certain types of tax debts can be discharged in a bankruptcy. Even in a Chapter 13 payment plan, creditors (including the IRS) can take less than the total owed. Bankruptcy may be a good option for a family in financial distress, even if it does not result in a complete discharge but a payment plan.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento, Roseville, San Francisco, Salinas and San Jose.

San Jose Bankruptcy Attorney Talks About Muzak Bankruptcy

The current recession is hitting all areas of the economy including companies that people love to hate. If the economy does not recover soon, then people may have to ride elevators without the calming string versions of their favorite rock songs because the company who makes elevator music, Muzak, filed for Chapter 11 Bankruptcy in February. The company missed a large payment of over $100 million dollars to it creditors.

Muzak was a wonder story by itself as its cash flow has doubled over the last three years which shows that demand for soothing sounds is still strong. The company also makes on hold messages systems, install sound systems, and drive through systems for retail buildings. Oddly enough, the company states that the weakening global economy was not a factor for its bankruptcy filing as it has solid cash flow and rising profits. However, Muzak has several hundreds of millions of dollars of debt due this year and the tightening credit market surely had some play because Muzak (along with most companies) will find banks reluctant to issue more credit.

As a reminder, a Chapter 11 Bankruptcy does not mean that Muzak has closed its doors but rather that it will be given time to restructure its debt. This may mean a reduction of debt or a new repayment plan. Once the debt is restructured, Muzac should emerge a leaner and more profitable company. Plus, elevator rides are extremely boring without our familiar Muzac.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.

Sacramento Bankruptcy Attorney talks about Property of the Estate Acquired Post-Petition in a Chapter 11 filing

Most debtors understand that when they file a petition for bankruptcy under Chapter 11 that a new legal entity referred to as an “estate” is created, which is an entity that is separate and apart from the debtor. The “estate” is broadly defined by federal bankruptcy law to cover nearly all of the debtor’s property that he or she has an interest in at the time the petition is filed. What debtor’s who file for bankruptcy under Chapter 11 may be surprised to know is that 11 USC § 1115 provides that all property covered under 11 USC § 541 that the debtor acquires after the petition is filed and before the case is closed, dismissed, or converted to a case under chapter 7, 12, or chapter 13, is included in the property of the estate. In addition to all property acquired after the date the petition is filed, earnings from services performed by the debtor after the commencement of the case are also the property of the estate. This definition of “estate” applies to all Chapter 11bankruptcy filings effective 180 days after April 20, 2005. It is important for debtors who file Chapter 11 bankruptcy to understand that the property they acquire after filing the petition, including earned income, will most likely be considered property of the estate. Furthermore, debtors who file for bankruptcy under Chapter 11 generally must use property acquired post-petition to fund their reorganization plan, regardless of whether the property is technically considered property of the estate.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy lawyers in San Mateo, Fremont, Sacramento and San Jose.

Fremont Bankruptcy Attorney discusses Student Loans in Bankruptcy

The current financial crisis has caused unemployment rates to skyrocket all over the country and bankruptcy filings have increased. The national unemployment rate is currently around 8% while California has recently reported unemployment statistics of 10.1%. That means that one in ten people in the state of California is unemployed. It also means that thousands of people with tens of thousands and sometimes even hundreds of thousands dollars in student debt are unemployed.

Under the current Bankruptcy code, educational loans are generally not dischargeable in bankruptcy. Unfortunately these rules apply regardless of whether the debt was acquired directly by the student. This means that parent borrowers are subject to the same standard and cannot obtain bankruptcy relief from the student loans incurred on behalf of their children, even though their bankruptcy proceeding may in all other aspects be completely independent of their children. However, there is a provision in the code under § 523(a)(8) which permits discharge of a student loan where the debt “would impose an undue hardship on the debtor and the debtor’s dependents.” This relief can be obtained by filing a petition with the court for undue hardship. It is ultimately up to the bankruptcy judge in each case to determine whether the debt will be discharged. However, in cases where student loans are crippling a person’s finances it can be well worth the effort.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.

San Jose Bankruptcy Attorney discusses Chapter 13 Eligibility

Are you the owner of an LLC or LLP and trying to avoid the high cost of a Chapter 11 bankruptcy by filing a Chapter 13? Unfortunately you’ll have no such luck. Chapter 13 bankruptcy filings are limited to individual debtors. While LLCs and LLPs are separate “entities,” they do not meet the “individual” requirement for a Chapter 13 bankruptcy. This means that while the debtor may file for a personal bankruptcy under Chapter 13, and place his/her personal debts into a 5 year repayment plan, the debtor’s LLC or LLP must file separately under Chapter 11.

The rules are less strict for individuals who are self-employed or operate an unincorporated business. In that situation, the individual can obtain relief under Chapter 13 as long as the individual’s unsecured debts are less than the statutory limit. But again, this does not apply to partnerships and corporations.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.

Sacramento Bankruptcy Attorney Talks About Winery Bankruptcy

The current economic climate is affecting all types of industries besides banks such as Washington Mutual or consumer electronics, such as Circuit City. Even local wineries as close as El Dorado County are feeling the effects of this down economy. MC2 Wines, which has does business under Conti Estate/Charles B. Mitchell Vineyards, filed for Chapter 11 bankruptcy in early February of this year. The Winery believes it has less than $50,000.00 in estimated assets and millions in liabilities, including multimillion dollar agricultural loans as would be expected for a winery.

As a reminder, a Chapter 11 does not automatically mean that MC2 Wines will close its doors. The Chapter 11 gives MC2 Wines a chance to reorganize its debts to create a plan to become more profitable. In this case, MC2 Wines will probably negotiate a payment plan to certain lenders, try to discount certain debts to a payoff amount, or try to find an alternative source of capital.

This is a slow and complicated process. For example, MC2 Wines obtained grapes from other wineries in order to produce different types of wine. (A common practice in the industry) Now that MC2 Wines filed for bankruptcy, it cannot afford to pay those other wineries for the grapes. The other wineries now want to halt the sale of the wines produced with their grapes because the other wineries would probably fair better if they sold the actual wine than taking a reduced amount or a long term payment plan.

If MC2 Wines is unable to come up with a plan or find alternative capital then the government will move to liquidate MC2 Wines. This would mean closing the doors on MC2 and may put the actual winery up for sale.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.