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Orlando Bankruptcy And Estate Planning Blog

Chapter 7 bankruptcy is an option for struggling businesses

Bankruptcy isn't always the first thing you want to try if you're falling behind on bills, but it is an option when you can't see a way to get control of your debt. As a business owner, you want to see your business succeed, but there are outside influences that could hold you back.

If your small business ends up being in over its head in debt, you have three types of bankruptcy that you can choose from that could help. Keep in mind that you, personally, might be responsible for the debts of your business unless you structured it as a corporation or LLC.

Is debt consolidation an option before bankruptcy?

Declaring bankruptcy is scary. Are there alternatives to try before you take such a step? One option is to try debt consolidation.

Debt consolidation is a way for you to gather your debts and address them. You need to weight the benefit of avoiding bankruptcy against the discipline and additional costs necessary for you to try debt consolidation.

It's never too early to start your estate plans

It is never too early to begin planning for your future, and that includes your estate plan. Estate planning as early as in your 20s is a wise choice because there is never a guarantee on the length of a person's life.

As a 20-something-year-old, you might think it's too soon to plan for your future retirement or to set up a will, but it's not. You may not plan to die any time soon, but a good estate plan still protects you in the case of serious injury (if you can't take care of yourself). A health care advocate, your health care proxy, is designated through your estate plan. This person helps take care of your needs if you are unable to due to injury or illness.

Here are the top reasons to file for Chapter 7 bankruptcy

If you realize Chapter 7 bankruptcy is the best way to improve your finances, it won't be long before you're learning more about the process and focusing on the next steps.

Before you can make a final decision, it's a must to understand the benefits of Chapter 7 bankruptcy. Here are a few of the best:

  • A fresh start: Once your Chapter 7 bankruptcy is complete, a good portion of your debt is gone for good. This gives you a fresh start, thus allowing you to better plan your finances in the future.
  • No repayment plan: The biggest concern with Chapter 13 bankruptcy is the repayment plan that lasts three to five years. With Chapter 7 bankruptcy, you get to keep all the income you earn in the future.
  • No debt limit: It doesn't matter how much debt you have, you can file for Chapter 7 bankruptcy as long as you pass the means test.
  • It's fast: A Chapter 7 bankruptcy discharge typically occurs within two to three months of filing. With Chapter 13, the repayment plan means that you'll be dealing with this for a minimum of three years.

Why choose Chapter 13 bankruptcy?

Chapter 13 bankruptcy, unlike Chapter 7, is not a liquidation bankruptcy. With this form of bankruptcy, you repay what you owe over a three-to-five-year timeframe.

With Chapter 7 bankruptcies, your assets may be sold to pay down debts, but your remaining debts are discharged soon after. Your debts may also be discharged in Chapter 13 bankruptcy, but only after you complete the repayment plan.

Can trust assets be protected during a bankruptcy?

Are you considering filing for bankruptcy but are concerned about how your assets could be affected? If you have set up a trust as part of an estate plan, you may have worries of what may happen to that property due to your bankruptcy.

As an individual, when you file for bankruptcy, you will be assigned a trustee by the court. This trustee will oversee your assets and can take unprotected assets to sell off and pay your creditors. Assets that are not eligible to be used to pay off bankruptcy debts include your home, retirement savings accounts and any vehicles you own.

Keeping credit cards can actually help heal your credit score

Credit card debt has reached a high point in America, according to an annual study by Experian, and many people are having to face the hard task of paying off their balances. If you have already reached your goal of paying off credit card debt, your instinct might be to get rid of the cards and avoid temptation. But, rebuilding your credit may actually be easier if you keep the same credit card. 

Chapter 11 bankruptcy could save your business

As a small-business owner, you want to make sure you protect your interests. You work hard to keep your business up and running, but with declining sales and higher expenses, you're finding it difficult to make ends meet. You think the end is near but what options do you have?

If you do not want to close your business, there is an option of going through Chapter 11 bankruptcy. This form of bankruptcy is designed for reorganization. The court-appointed trustee assists during the reorganization; the business owner can take this position if they wish.

Donating: Meeting your philanthropic goals

One thing that may be very important to you is philanthropic giving. If it is, then you will want to make sure you include it in your estate plan. No matter how much you want to give, having it in your estate plan will help you give what you want to those who you feel need it most.

Many people want to leave behind a legacy. For some, this means reaching philanthropic goals during their lifetimes and even following death.

Do you need an estate plan if you are single?

Are you single and believe that you do not need to prepare an estate plan? The truth is, single people need to have an estate plan as much as anyone else. Even as a single person you likely have a strong interest on where your assets will go once you die. Also, you should have considerations in place if you happen to become incapacitated at some point in your life. Without an estate plan in place, your wishes will not have any impact on either of these things.  

ABA Defending Liberty Pursuing Justice American Bankruptcy Institute The Florida Bar 1950 CFAWL Criminal Florida Association For Women Lawyers Orange County Bar Association
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