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The Effects of Bankruptcy on Your Tax Obligations
While tax obligations generally cannot be avoided by filing for bankruptcy, there are certain exceptions. Taxes may be dischargeable depending upon the nature of the tax debt and the debtor’s actions prior to filing bankruptcy. There are two prerequisites for seeking discharge of taxes in bankruptcy. First, the obligations must be for federal, state or […]
How Subchapter V Helps Individual Debtors Get Chapter 11 Plans Confirmed
Chapter 11 is used mostly by financially stressed companies seeking protection from creditors while working to pay off debt and return to solvency. This form of bankruptcy relief is also available to qualifying individual debtors, but until recently it was too complex and costly to be feasible for them. However, the Small Business Reorganization Act […]
Avoiding Conduct That Could Amount to Bankruptcy Fraud
Fraud occurs when a person makes a material misstatement of fact with the intent of deceiving someone else for personal gain. Fraud committed by a debtor can derail a bankruptcy case and have other disastrous consequences. There are two general types of bankruptcy fraud: pre-filing fraud and fraud committed while the bankruptcy case is in […]
Methods of Determining Reorganization Value in Chapter 11
The goal of a Chapter 11 bankruptcy is to allow a troubled business to stay in operation while it resolves its debts and to emerge in a solvent condition. A Chapter 11 reorganization plan must ensure that creditors will be repaid more on their debts than if the company had been closed and its assets […]
The Timeline for Completing Chapter 11: How to Avoid Delays
Chapter 11 bankruptcy offers a company the opportunity to get relief from debt, reorganize and emerge as a financially viable entity. It is a powerful remedy, but it can involve a lengthy process. A Chapter 11 can take anywhere from a few months to five years or more, depending on the size of the company […]
Meeting the Subchapter V Test of Being “Engaged in Commercial or Business Activities”
The Small Business Reorganization Act (SBRA), enacted in 2020, created a new procedure called Subchapter V, which made it easier for small businesses to file for Chapter 11 protection. Since then, Subchapter V has been used extensively to help business owners regroup, reorganize and return to solvency when they otherwise would have gone under. However, […]
What to Do if the Bankruptcy Trustee Tries to Dismiss Your Chapter 13 Case
The core benefit of Chapter 13 bankruptcy is that it restructures your unsecured debt into a three- to five-year repayment plan. However, you have an obligation to make those payments on time, every time. If you fall behind, the trustee in charge of your case could file a motion to dismiss if. If you are […]
Overcoming Objections to Plan Confirmation in Chapter 11
In Chapter 11, a financially struggling company uses bankruptcy protection to stay in business while restructuring certain debts and reorganizing business operations in accordance with a bankruptcy plan. One of the major challenges of a Chapter 11 bankruptcy is getting the plan approved by the bankruptcy court. A Chapter 11 plan is a highly detailed […]
Lien Stripping of Second Mortgages in Chapter 13
One of the main reasons consumers file Chapter 13 bankruptcy is to save their homes from foreclosure. With Chapter 13, also known as a wage earner’s plan, the debtor may be able to keep the home by paying off mortgage arrearages over a period of years. However, a homeowner may have more than one loan […]