Law Offices of Buddy D. Ford, P.A. FindLaw IM Template2024-03-19T14:26:11Zhttps://www.tampaesq.com/feed/atom/WordPress/wp-content/uploads/sites/1200552/2021/02/cropped-fav-32x32.pngOn Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473622024-03-19T14:26:11Z2024-03-19T14:26:11ZUnsecured credit card debt
Unsecured credit card debt is one of the most common types of debt that individuals seek to discharge through bankruptcy in Florida. This kind of debt doesn’t require collateral, so credit card companies don’t have physical assets to claim if the debt goes unpaid. Charges for luxury goods or services made within 90 days before filing may not be eligible for discharge under the presumption of fraud.
Medical bills
Another significant type of debt that can be discharged in a Florida bankruptcy is medical debt. With health care costs continuing to rise, many individuals can’t keep up with exorbitant medical bills. Bankruptcy offers a solution to this overwhelming financial burden.
Personal loans and payday loans
Personal and payday loans are unsecured debts that can also be discharged in a Florida bankruptcy. These include debts from friends or family members, as well as loans from financial institutions or payday lenders. Since property doesn’t secure these debts, they can be completely eliminated in bankruptcy.
Past-due rent and lease agreements
Filing for bankruptcy in Florida can also discharge debts related to past-due rent and lease agreements. If someone is facing eviction or has already moved out and owes money for the remainder of a lease or months they didn't pay, bankruptcy may relieve them of this financial obligation. However, discharging this type of debt through bankruptcy will not necessarily allow them to stay in the rental if the landlord is seeking to evict for non-payment.
Utility bills
Utility bills, such as those for electricity, water and gas, can accumulate into significant debts over time. Filing for bankruptcy in Florida allows individuals to discharge these debts, preventing utility companies from seeking repayment for past due amounts.
Discharging debt through bankruptcy in Florida can provide a path to financial freedom for many struggling with overwhelming financial obligations. It's important for individuals considering bankruptcy to consult with a legal representative to understand fully which of their unique debts can be discharged and how to maximize the benefits of this process.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473612024-02-06T19:08:17Z2024-02-06T19:08:17ZChapter 13 (generally) only applies to personal bankruptcy
Two of the most available bankruptcy chapters that you’ve likely heard about are Chapter 7 and 13 bankruptcies. Of these two, Chapter 13 only applies to personal bankruptcy, while Chapter 7 can apply to businesses and individuals. Chapter 13 can be filed by business owners who are sole proprietors, however.
Chapter 13 bankruptcy is uniquely designed to cater to individuals who have a consistent source of income and can better manage their debt with a personalized repayment plan. In fact, it’s commonly referred to as the wage earner’s debt management plan. Suppose you choose this debt management plan; you can expect to pay some debts and enjoy an improved financial outcome.
Chapter 11 (generally) only applies to business bankruptcy
Chapter 11 bankruptcy is a lesser-known form of debt management because it’s almost exclusively reserved for businesses. This category for businesses shares some similarities with Chapter 13 personal bankruptcy because both plans allow filers to reorganize their debts. When a commercial organization files for Chapter 11, it may reorganize certain assets to pay off existing debts. How this works is that both the creditor and debtor propose reorganization plans and the creditor approves which of the plans will be implemented.
Different outcomes to Chapter 7
Both businesses and individuals can file for Chapter 7 bankruptcy, all with a different outcome. When an individual files for this chapter, some of their debts may qualify for discharge. On the other hand, when a business files for this chapter, the commercial organization and its operation will be dissolved as the outcome of the chapter. This is why most businesses prefer to file for Chapter 11 instead of Chapter 7 bankruptcy.
If you’re struggling with debt as an individual or a commercial organization, it helps to know which bankruptcy chapter is most suitable for your unique situation. By scheduling a consultation with a legal professional, you can gain access to the knowledge and insights you need to make an informed choice.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473602024-01-23T14:15:10Z2024-01-23T14:15:10Zbasics of business bankruptcy and its implications is crucial for business owners considering this route. It's a complex legal process that can offer relief but that also results in significant consequences.
What types of bankruptcies can businesses file?
For businesses, the most common types of bankruptcy are Chapter 11 and Chapter 7. Chapter 12 is another common type, limited to family farms and fisheries.
Chapter 11, often called reorganization bankruptcy, allows a business to continue operating while restructuring its debts.
Chapter 7 involves liquidating a business's assets to pay off debts, after which the company typically closes.
Chapter 12 bankruptcy enables family farmers and fishermen to reorganize their debts and develop a repayment plan.
Each type of bankruptcy is unique, so understanding its ins and outs is critical for all business owners. In a nutshell, each type of bankruptcy is a legal proceeding involving a person or business that is unable to repay their outstanding debts. The process begins with a petition filed by the debtor, which is most common, or on behalf of creditors, which is less common.
How can bankruptcy affect operations?
Filing for bankruptcy can have a significant impact on a business's operations. In a Chapter 11 or 12 bankruptcy, the company may continue to operate but must do so under the supervision of the court.
The business's management retains control, but significant decisions, such as selling assets, entering into lease agreements or expanding operations, require court approval. On the credit side, a bankruptcy filing will significantly impact the business’s credit rating, making it more difficult and expensive to borrow money in the future.
Business owners should ensure they understand precisely how filing will impact their company before committing to an approach. Seeking legal guidance is a good way to get started.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473592023-11-16T17:48:49Z2023-11-16T17:48:49ZChapter 11 can be useful for companies that need to weather unexpected changes in the economy without closing their doors.
How does it work?
If you are a small business owner and you are in need of debt relief, know that the goal of Chapter 11 bankruptcy is to help your business stay open. Ideally, you’ll get through this process with minimal remaining debt, and you will not have to liquidate all of your assets or close the business – as many people assume. Instead, Chapter 11 bankruptcy is all about reorganizing that debt so that it works for the business.
The first step in the process is creating a reorganization plan. This plan is generally crafted by a business owner with the assistance of a skilled lawyer. But the creditors are not excluded from this process. They may have the option to vote if it seems like the re-organization plan is going to impact what they are owed. In other words, the hope is to find a solution that works for everyone. Once the court confirms this reorganization plan, then the process can move forward.
The benefit of keeping assets
In this sense, Chapter 11 can be very beneficial for companies and business owners because they don’t have to liquidate all of their assets. Many people view bankruptcy in this light, but that is what happens under Chapter 7 bankruptcy, not Chapter 11. After all, if a business lost all of the assets that it controls, it would have to close its doors. Chapter 11 helps to create a viable financial future and a pathway toward success for the company. It just has to reorganize the business’s finances so that the debt works in the current economy.
If you are a business owner, it’s important that you understand how the process works and what legal options you have available to you. By seeking legal assistance now, you can potentially help your business remain operational later.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473582023-11-10T14:31:19Z2023-11-10T14:31:19Zsubstantial decrease in the demand for certain types of facilities, including office building rental spaces. Is business bankruptcy a viable solution for a business with commercial properties that have ceased generating revenue?
Business bankruptcy offers multiple solutions
There are multiple different forms of business bankruptcy, each of which can offer different benefits to organizations experiencing short-term financial hardship. Many businesses trying to remain solvent after multiple quarters of losses will attempt to restructure. They may eliminate certain components of the business and seek to renegotiate certain financial obligations.
Restructuring can be a useful step for businesses struggling with unprofitable commercial real estate holdings. In some cases, restructuring will lead to more favorable loan terms, as businesses can negotiate new arrangements with their lenders. They may also be able to halt certain collection efforts in order to retain as much of their commercial portfolio as possible.
Other times, bankruptcy may help businesses tap into resources that could prove useful if the company attempts to alter how it utilizes commercial spaces. Restructuring to eliminate certain debts could help a business connect with financing that might allow it to pursue zoning changes and invest in major overhauls to convert office spaces to residential lofts, for example.
Most businesses that have invested in real property do not want to sell when demand is low, as they may take a loss on the transaction. Looking into various ways to mitigate commercial real estate losses can help organizations remain solvent while preserving as much of their resources as possible.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473572023-09-20T14:07:09Z2023-09-20T14:07:09ZImpending collection efforts
Often, one of the most important considerations for the timing of a bankruptcy filing will be when lenders or other creditors will likely initiate aggressive collection efforts. A creditor filing a lawsuit or seeking to repossess business property could be a reason to initiate bankruptcy to prevent or delay such efforts with the automatic stay.
Any personal liability
Certain business models may generate liability for the owner of the company. An individual's personal assets or possibly even their future income could be at risk if the company fails or faces aggressive collection efforts, which could be a reason to consider a preemptive bankruptcy.
The company's future
In some cases, a business's future success or likely lack thereof might be the reason why an executive or owner files for business bankruptcy. If people expect that the company will soon close due to insolvency or other issues, a timely bankruptcy filing can help facilitate that process. On the other hand, those hoping to help save a struggling business may need to carefully plan the timing of a bankruptcy in order to preserve as much of the company's resources as possible.
Current operating expenses
The ability of an organization to continually cover all of its operating expenses could be an issue that leads to bankruptcy. Particularly when a business may need to restructure, looking at how much it currently costs to operate the company can help and executive or owner recognize when the right time to file may be. They may base their timeline on the projection for when the company will become insolvent or when it may run out of available credit.
Unexpected company setbacks
Perhaps there was a bad season for a certain crop that left an agricultural operation struggling. Maybe a key employee suddenly quit and opened a competing business, taking a huge number of clients with them. When a company suddenly has a major financial setback, it may go from profitable to insolvent in a number of weeks and may require assistance to get back into the black.
Discussing a company's current circumstances and projections for its near future can help those with control over the company's operations determine when bankruptcy might be the right choice.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473562023-08-12T01:48:49Z2023-08-12T01:48:49ZThere are multiple options for leases
A lease is a type of executory contract, and there are special bankruptcy rules for such agreements. Given that leases can lock an organization into multiple years of financial obligations, being able to change or end those recurring costs could make a major difference to a company trying to regain financial control after a difficult period.
The party filing for bankruptcy will have several options. They can reaffirm the lease and continue operating in the same facilities. In some cases, they may be able to renegotiate some of the terms of the lease to make it more realistic for them to complete the lease. Other times, they may be able to assign the lease to another party, which will lead to someone else occupying the space. Ending the lease could also be an option.
When a business has begun to struggle to meet basic operational expenses, terminating leases at certain facilities or renegotiating the terms of a lease could potentially be the best solution to help that company overcome its short-term financial challenges and become solvent again. Knowing how bankruptcy affects different types of financial obligations can help executives and owners choose the right path forward for their company that is experiencing financial challenges.
]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473552023-07-21T12:37:36Z2023-07-21T12:37:36Zfreight factoring services, they may not have enough revenue each month to cover their costs. More aggressive debt solutions, like bankruptcy, may become necessary.
Bankruptcy can mean closure or a more profitable future
Occasionally, the decision to file for bankruptcy is related to the realization that the company is not solvent and needs to close. A Chapter 7 bankruptcy is a way for a business to eliminate financial obligations while liquidating any valuable assets to repay creditors when necessary. Businesses can also file for Chapter 11 bankruptcy, which can facilitate restructuring.
Restructuring may lead to layoffs and negotiating new payment plans with various creditors. For example, a Chapter 11 bankruptcy might allow a trucking company to drastically reduce what it has to pay to a freight factoring service provider each month for prior lines of credit, which can help the company balance the budget and keep the paycheck clearing the bank account.
Chapter 11 proceedings can also give a business the leverage it needs to shut down some of its facilities despite an ongoing lease and redirect what assets it has toward the expenses that are absolutely necessary to keep the company operational. In a successful Chapter 11 filing, a trucking company may be able to get out of financial arrears and eventually discharge its remaining debt while simultaneously balancing the business budget.
Sometimes, trucking bankruptcies have major implications for employees and workers, including the possibility of keeping the company open and following through on obligations to both creditors and employees. Evaluating business bankruptcy as a possible solution for an organization plagued by unsustainable levels of business debt might mean the difference between the company closing down or overcoming a short-term financial issue to become a truly sustainable business.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473542023-05-23T13:21:14Z2023-05-23T13:21:14ZBusiness bankruptcy can be a way to resolve those financial issues, but many entrepreneurs and executives shy away from bankruptcy. When might bankruptcy be a smart approach?
When a company needs a short-term solution
Even generally successful companies can run into a rough patch. Perhaps there is a creditor who won't wait the three months it will take for a company to finish a big project and get paid for that work. Maybe there were a few large, one-time expenses that put the company in the red and has left the organization unable to balance its budget.
In a scenario where the company overall has a workable business model and a track record of success, reorganization bankruptcy can be a way to repay creditors without liquidating resources and closing off a company's access to credit. The alternatives to this process might include short-term business loans or factoring services. Companies with unpaid invoices, like commercial transportation companies, can work with a factoring company to receive an advance on the money that clients will pay for services already rendered or soon to be rendered. These solutions may help some but may lead to worse debts in other cases.
When a business owner intends to close the company
Business bankruptcy is also a viable option when an organization is going to close. Whether an unbalanced budget or the owner's impending retirement is the actual cause of the company closing, bankruptcy can help. By discharging outstanding debts in a business bankruptcy, owners and executives can reduce their risk of personal responsibility for amounts still owed when the company ceases operations.
Seeking legal guidance to learn the basics about business bankruptcy can potentially help those who are worried about the financial solvency of the organizations that they own or run.]]>On Behalf of Law Offices of Buddy D. Ford, P.A.https://www.tampaesq.com/?p=2473532023-05-06T15:08:11Z2023-05-06T15:08:11ZWorker wages are often dischargeable debts
Current bankruptcy laws give employers the option of reporting past-due wages owed to workers among their other debts when they file for bankruptcy protection. The individual workers can then make claims as creditors during the bankruptcy process. Each worker, at most, could make a high-priority claim for unpaid wages during the bankruptcy.
However, as of 2023, each worker could typically only seek up to $15,150 in wages regardless of how much they should receive. The wages owed to hourly workers in low-level positions will likely be eligible for full repayment, as $15,000 would represent many months of full-time work, and most employees will not continue working when they don't receive a paycheck. For executives, salespeople and other highly-compensated professionals, a portion of what they hope to collect may be subject to discharge if the business's bankruptcy is successful.
There is more than one solution for wage-related debt
In some scenarios where a company has unionized employees, it may be possible to negotiate a compromise with union representatives that allows for the partial repayment of wage debts in order to keep as many workers on the payroll as possible. Sometimes, organizations need to downsize and eliminate numerous positions and can then renegotiate arrangements with some of the workers that they hope to retain for their new, streamlined operations.
Even after an organization has filed for bankruptcy, there are still numerous possible solutions available to address specific debts, including wages still owed to workers. Seeking legal guidance to explore how a company’s bankruptcy can affect its finances can help executives to plan the best path forward for a struggling business.]]>