Kentuckians who struggle with debt, whether from overuse of credit cards or medical bills or other unexpected financial catastrophe, often view bankruptcy as a means of relief. However, personal bankruptcy comes in two different flavors known by their location in the United States Bankruptcy Act: Chapter 7 and Chapter 13. Chapter 7 is generally used to apply a debtor's assets to pay debts and to discharge all debts that are not repaid or settled. Chapter 13 is used to establish a plan to reorganize those debts and pay them off over time. In this post, we will provide an overview of the mechanics of Chapter 7.
Many factors can force a person or business into bankruptcy. A recent Chapter 7 filing involving a Kentucky-based food manufacturer highlights this fact and provides a devastating irony: the seller of a peanut-free peanut butter called "I. M. Healthy" has been forced to file a business bankruptcy under Chapter 7 because its product has been found to be contaminated with the bacillus E. coli
Many Kentucky businesses that file a petition for bankruptcy are often party to one or more contracts under which the parties have not fulfilled all of their obligations. A common example is a commercial lease whose term has not expired. In such a situation, the debtor must continue to pay rent, and the landlord must continue to allow the debtor to occupy the space. What happens to these contracts in a business bankruptcy proceeding?
Two popular Louisville area restaurants may be forced to close their doors if, as has been whispered, their parent corporation decides to declare bankruptcy. The irony of the situation is the fact that both local restaurants appear to be doing well financially.
Bankruptcy can become a significant stigma for small businesses in Kentucky and their owners. Bankruptcy is often viewed as the "nuclear option" to be used only after other attempts at keeping a business solvent have failed. However, even businesses that are deeply in debt may be able to avoid bankruptcy by negotiating agreements to restructure their debts instead of filing a bankruptcy petition.
Most Kentucky business that are contemplating bankruptcy assume that filing the petition will invoke an automatic stay and protect them from pending lawsuits. In a case that may have implications for business bankruptcies in Kentucky and across the country, the United States Supreme Court declined to review a decision of the Second Circuit Court of Appeals that held that General Motors was not protected from product liability suits because it withheld critical information from the bankruptcy court.
Kentuckians who are contemplating filing a petition in bankruptcy have many questions about life after bankruptcy. One of the most pressing issues is the purchase of an automobile on credit. Contrary to the expectations of many people, a personal bankruptcy does not automatically foreclose the possibility of borrowing money to buy a car.
You may have run into a situation that has left you with a mountain of debt, and you have decided that filing for bankruptcy is the only way to get your life back. It is possible for you to file personal bankruptcy and become a pro se litigant.
Bankruptcy can strike any kind of business operation. While most people think of bankruptcy as a remedy for failed manufacturers or sellers of manufactured goods, the recent business bankruptcy of a Kentucky music festival that never opened its doors illustrates how ventures featuring popular performers and good food can fail.
One of the most potent debt collection tools available to creditors in Kentucky and other states is a wage garnishment. A properly executed garnishment allows a creditor to collect a portion of the debtor's wages directly from the debtor's employer. The provisions of Chapter 13 of the United States Bankruptcy Act provide a significant protection against garnishments after a petition for personal bankruptcy is filed.