A preference action refers to a lawsuit brought under the U.S. Bankruptcy Code in which a creditor or bankruptcy trustee seeks to get pre-bankruptcy payments reversed. Under U.S. law, bankruptcy courts can automatically review all payments made by the filing business, to any party, within the last 90 days before the bankruptcy petition was filed. Courts have the authority to force individuals and companies that received inappropriate payments to compensate damaged creditors. In this post, our top-rated San Jose business bankruptcy attorneys discuss one of the common defenses that can be used to fight against preference lawsuits: contemporaneous exchange for new value.
An executory contract is simply a contract that has yet to be fulfilled by either party. In other words, both parties to the contract will still have remaining performance obligations. Executory contracts can play a significant role in a business bankruptcy case. If you have any questions or concerns about how an executory contract might impact a bankruptcy case, contact an experienced San Jose business bankruptcy attorney to learn more.
Many business owners whose businesses have gotten into financial trouble wonder if they can be held personally liable for the debts incurred by their business. In addition, they are often concerned that filing for a business bankruptcy will affect their personal finances. Whether a business owner will be held liable or affected by a business bankruptcy depends on a number of factors, some of which are discussed below.
Chapter 11 bankruptcy is a type of reorganization bankruptcy that is available to both individuals and business entities, although it is predominantly utilized by businesses. It is important to understand some of the ways that businesses can benefit for filing for Chapter 11 bankruptcy protections. For more information or for answers to specific questions regarding your case, call our office today to speak with a San Jose bankruptcy attorney.
When you file a petition for Chapter 7 bankruptcy, you are disclosing personal and financial information to the bankruptcy court. In order to file for bankruptcy, the court needs to be aware of your debts, property, income and general state of your financial affairs. In turn, the bankruptcy court will appoint a bankruptcy trustee to oversee and administer your case. The trustee will essentially review your petition and verify that what you submitted was true and accurate using independent sources of verification.
If you have incurred a substantial amount of unsecured debt related to credit cards and medical bills, Chapter 13 bankruptcy might be a perfect solution for you. Chapter 13 bankruptcy is only available to you so long as you are petitioning as an individual, or operate a self-employed, unincorporated business. Additionally, in order to qualify, your unsecured debts must not exceed $383,175 and your secured debts, such as home mortgages and automobile loans, must be less than $1,149,525.
Bankruptcy is not a fun topic to discuss, but it is necessary for you to understand what it is and how it will work to the benefit of your business if you are considering filing. If you have a small business that is struggling financially, and you do not have enough resources to pay your creditors, bankruptcy may be an option for you to consider.
Deciding to declare bankruptcy is a difficult decision and one not to be taken lightly. In some situations it can be the right or wrong thing to do. You need to remember that bankruptcy will affect your reputation, self-image, and future credit. However, it can improve your quality of life as the communications from creditors begin to dwindle down.
California has consistently been at the top of the list for states with the highest number of bankruptcies in the country. It was number one in 2011 reporting over 240,000 bankruptcies, according to Debt.org. For the millions of Individuals who face financial problems, there may be an opportunity to avoid bankruptcy.
Filing for bankruptcy is never something that a business wants to have to consider, but it can be a way for a company to reorganize and find a financial solution to work its way out of debt. The Department of Justice has researched trends in Chapter 11 bankruptcy filing and have seen numbers of filed cases exceed 3,000 over the past few years. However, this is a significant drop compared to the two decades previous.