Speak with bankruptcy attorney first. Most people are unfamiliar with the bankruptcy process. They know it can help eliminate debts but are not sure of the impact of owning assets. As a result, sometimes before going to see the bankruptcy lawyer the individual will transfer a vehicle into a relatives name or repay the relative with money received from a tax refund before seeing the lawyer. It is a mistake. First, any such transfers or payments must be reflected on the bankruptcy schedules. In addition in most instances the individuals could have filed bankruptcy and used exemptions to protect the assets. However, if they transfer the item or make the payment the trustee can overturn the transfer or payment and use it to pay your creditors. And even if you have exemptions available, since you voluntarily gave away an asset when the asset is brought back you cannot exempt it. So talk with bankruptcy attorney first if you are thinking about filing bankruptcy.
Chapter 11 Bankruptcy is available to businesses that desire to sell their assets but have debts exceeding the value of the assets. While Chapter 7 can be used for a liquidation of assets there are circumstances where it is important to maximize the amount received and selling as a going concern makes more sense. A Chapter 11 liquidating plan can be used for that purpose. However, sometimes it is necessary to have a more immediate sale and waiting until the confirmation hearing is not an option. In that situation the company can seek to sell its assets through a sale pursuant to section 363 of the Bankruptcy Code. The section is usually used to sell specific assets but more and more it is used to sell all of the company's assets. Generally the seller must demonstrate that business may not survive until confirmation and this is the best opportunity for creditors to be paid. The 363 sale is not for all sales but in some cases it may be the best option.
Exemptions are used to protect assets in bankruptcy. A trustee will not sell your assets in bankruptcy if they are exempt. Which exemptions apply depend on where you live and how long you have lived there. For example, if you live in Cherry Hill NJ and file a bankruptcy, you would generally have the option of using the Federal exemptions or the New Jersey state exemptions. In most cases the Federal exemptions would provide more protections than the NJ exemptions. In Philadelphia PA you would also have the option of using state or Federal exemptions. Some states opt out of the Federal exemptions and you can only use the state exemptions. Even if you are living in Cherry Hill NJ and file bankruptcy there, you may not be able to use the Federal or NJ exemptions. That is because if you have not lived in your state for the last 730 days, than you must apply the exemptions used by the state where you lived before the last 730 days. It is important that your attorney is made aware of where you have resided for the few years leading up to the bankruptcy.
Since bankrupcy is a federal law, whether filing bankruptcy in Voorhees, New Jersey or Philadelphia, Pennsylvania, the information to be provided is the same. Section 521 of the bankruptcy code, entitled "Debtor's Duties" lists different requirements. The debtor needs to provide 1.) a list of creditors, 2.) a schedule of assets and liabilities, 3.) a schedule of current income and current expenditures, 4.) a statement of the debtor's financial affairs, 5.) a bankruptcy petition signed by the debtor's attorney, 6.) copies of all payment advices received within 60 days before the date of the filing of the petition, 7.) a statement of the amount of monthly income, 8.) a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition, 8.) a statement of the debtor's intention with respect to the retention or surrender of property, 9.) a copy of the debtor's federal income tax return. In addition, a trustee may ask for additional information such as bank statements, deeds, etc.
A large power company called Energy Future Holdings has filed for bankruptcy. The business bankruptcy filing comes seven years after the energy company went through a leveraged buyout, which left it laden with debt. The buyout happened before the natural gas boom in the United States resulted in a large-scale reduction of electricity prices. These shifting economic forces affected business operations across New Jersey and the rest of the nation.
Business bankruptcy proceedings can be utilized by New Jersey companies to get back on sound financial footing following difficult financial times. In fact, one well-known corporation, Brookstone, has announced that it is trying to do just that after filing for Chapter 11. The company, which most New Jersey shoppers know after visiting malls and airports throughout the nation, is currently trying to sell itself to Spencer Spirit Holdings for $147 million.
The shipping company, Genco, plans to file for bankruptcy by the end of March. The company operates ships that transport grain, coal, iron ore and soybeans. The Chapter 11 filing will be completed in order to protect the company from a $50 million debt obligation that is coming due. Companies in New Jersey and other parts of the country often utilize bankruptcy in this fashion to protect themselves from an impending debt payment that they cannot afford to pay.
Readers in New Jersey may be interested to learn about the bankruptcy of a local man. The man is the owner of an oil company, Norton Oil Company, which recently had some difficulty making the oil deliveries that it contracted to make to people in our state. The Chapter 7 bankruptcy filing came in part due to the personal guarantees made by the owner of the oil company for his business. This filing may help him to avoid a business bankruptcy for his personally owned oil company.
Many people in New Jersey love to spend warm summer days playing tennis. For years, the equipment of choice for these people was manufactured by a local company named, Prince. That was until the mid-2000's when the company began to fall from favor in part due to multiple ownership changes. That led to the commercial bankruptcy of the business last year.
New Jersey readers may be interested to learn about a man who was once the co-owner of a successful paper company in another state recently filed for a personal bankruptcy. The Chapter 13 filing came after the business was sold. Reports indicate that the company sale happened at a loss to those who had owned it, including the man who filed for the personal bankruptcy protection.