Securities Fraud Lawyers Blog

The Long-term Effects of Filing for Bankruptcy as a Business

Published on: December 23, 2014 | by Savage Villoch Law, PLLC

Despite your best efforts, your business may fall on hard times. Fortunately, bankruptcy laws are there to help you and your company get back on your feet. No business owner wants to file for bankruptcy, but things happen. If you’re considering filing for bankruptcy as a business, be sure to hire a skilled Tampa bankruptcy lawyer. You should also consider the long-term effects of filing before doing so. Businesses can file for bankruptcy under Chapters 7, 11, 12 or 13 of the bankruptcy code, and the long-term impact of filing varies depending on the one you choose.

Elimination of Debt

The primary reason to file for business bankruptcy is to eliminate debt that you can’t repay. Again, the type of bankruptcy that’s used affects how much debt can be eliminated, if any can be at all. If your company is owned solely by you or by you and a partner, Chapter 7 bankruptcy may allow you to cancel all business debts, court judgments, leases and medical bills. Corporations can file for bankruptcy, but they must opt for Chapter 11 or 13. Both options require the repayment of at least some of the debt over time.

A brief history of bankruptcy in the United States.

Published on: December 21, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

Contrary to pop culture belief, bankruptcy existed long before the game show Wheel of Fortune. Remember when contestants would lose their prize money if they spun the wheel and randomly landed on the ominous black wedge, “BANKRUPTCY”? Bankruptcy also existed way before celebrities like M.C. Hammer, Billy Joel, Burt Reynolds, and Mike Tyson each filed for bankruptcy protection. P.T. Barnum, a famous American showman and businessman, filed bankruptcy in 1877. K-Mart filed bankruptcy in 2002.

Bankruptcy in the United States dates back to the United States Constitution itself. Article I, Section 8 of the U.S. Constitution gives Congress the power to enact uniform laws on the subject of bankruptcies. Although Congress had this power beginning in 1787, Congress did not pass a bankruptcy law until about 13 years later in 1800 and, even then, the law passed was short lived and was limited to involuntary bankruptcy proceedings brought against merchant and traders. In 1803, Congress repealed the Bankruptcy Act of 1800, citing excessive costs and corruption.

Business Bankruptcy Filings

Published on: December 17, 2014 | by Savage Villoch Law, PLLC

Filing bankruptcy comes with certain intrinsic promises, which your Securities Fraud Attorney in Tampa can explain. For example, you are promising that you will abide by bankruptcy laws so that creditors can receive as much pay as they are entitled to receive. However, if you do not keep this promise, your securities fraud attorney in Tampa can explain that you may be suspected of fraud, which may expose you to criminal penalties and fines.

Information about Bankruptcy Fraud

Some individuals may make simple mistakes because they lack an understanding of bankruptcy law. For example, there are certain activities that businesses can conduct and that they are prohibited from conducting in the months leading up to bankruptcy. For example, businesses cannot transfer ownership of their assets within the year of their bankruptcy filing. They may also be restricted from making payments to creditors within three months of their filing.

Filing for Bankruptcy: Chapter 7 vs. Chapter 11

Published on: December 11, 2014 | by Savage Villoch Law, PLLC

Are you considering filing for bankruptcy? If so, seek the advice of experienced Chapter 11 Attorneys in Tampa who will help you through the process and make sure you select the appropriate type of bankruptcy protection.

When your business debts become overwhelming, you need to decide whether you wish to keep your business open or shut it down forever. If you want to keep it open, you will want to file for Chapter 11. If you are shutting down, file for Chapter 7.

Chapter 7

What You Need To Know About Filing For Bankruptcy

Published on: December 4, 2014 | by Savage Villoch Law, PLLC

The decision to file for bankruptcy is never an easy one. If you are a small business owner, increased competition from large corporations, rising prices, declining consumer interest or any number of factors can conspire to drive your business down leaving you with few options. If you are unable to turn it around, you may find yourself contemplating Chapter 7 bankruptcy, which involves you ceasing all business operations and shutting down. A court-appointed trustee will oversee the dissolution of the business, sell off the business assets and try to pay down as much of the business’ debts as possible. Chapter 7 bankruptcy lawyers in Tampa can answer your questions about this process.

Who Is Eligible to File for Chapter 7?

Those who own their business as sole proprietors are not eligible to file for Chapter 7 bankuptcy as a business. The debts of the business are personal debts for which they are personally liable, so they are unable to file as a business. They can file for Chapter 7 as a person, but they will be unable to keep the proceedings separate from their personal assets and history.

Same as it Ever Was? Cost Bonds in Florida Civil Trial Courts, Part II

Published on: December 3, 2014 | by Savage Villoch Law, PLLC

Florida has had a Cost Bond requirement since it was a Territory. As discussed in Part 1 of this article, the Cost Bond statute has not changed much, though the practical impact of the Cost Bond requirement has changed significantly. Still, the Cost Bond Statute is a useful tool in protecting Florida residents from lawsuits by non-residents in Florida courts.

Why Florida Lawyers Should Be Familiar With the Florida Cost Bond Statute

1. Chapter 57.011 may be an effective tool to review when your Florida client is sued by a nonresident plaintiff: a non-resident plaintiff’s technical fault may become a substantive motion to dismiss.

"Debts canceled by bankruptcy still mar consumer credit scores," but consumers can fight back.

Published on: November 29, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

On November 12, 2014, the New York Times published an article entitled “Debts canceled by bankruptcy still mar consumer credit scores.” In the article, the author, Jessica Silver-Greenberg, explains that “Tens of thousands of Americans who went through bankruptcy are still haunted by debts long after — sometimes as long as a decade after — federal judges have extinguished the bills in court.” This article was also featured in the Tampa Bay Times on Friday, November 21, 2014.

Lawyers with the United States Trustee Program, a group charged with overseeing federal bankruptcy cases, are investigating certain banks, such as JPMorgan Chase, Bank of America, Citigroup and Synchrony Financial (f/k/a GE Capital Retail Finance), because these banks are suspected of violating bankruptcy law and ignoring the discharge injunction. Section 524 of the bankruptcy code provides a “discharge injunction” where creditors are no longer allowed to pursue debts canceled or discharged in the bankruptcy case. The banks allegedly ignore the discharge injunction when they know (or should have known) the debt was canceled but still seek to collect the debt, whether by continuing to report it on the person’s credit report, sending letters, or making telephone calls about the canceled debt. Often times, these are not clerical errors, but debt-collection tactics. In some cases, the banks purportedly refuse to correct the “mistakes,” insisting that the canceled debt be paid. An example cited in the article was The Vogts, a couple in Denver, who paid JPMorgan $2,582 on a debt that was discharged in bankruptcy because they needed a clean credit report to get a mortgage.

How to Know If You Should File for Bankruptcy

Published on: November 27, 2014 | by Savage Villoch Law, PLLC

As Tampa bankruptcy attorneys can tell you, every person’s financial situation is unique, so there is no one-size-fits-all solution to dealing with debt problems. However, there are some guidelines that may help you decide whether or not to file for bankruptcy. In general, it is best not to wait until your situation reaches a critical point. If you can see problems coming down the road, you’ll stand a better chance of repairing your credit rating and preserving some assets if you file for bankruptcy earlier rather than later, say Tampa bankruptcy attorneys.

Time to Think about Bankruptcy

If the following factors describe your situation, you may want to start weighing bankruptcy as an option:

U.S. Supreme Court to review Eleventh Circuit ruling where Chapter 7 debtors are allowed to strip off second mortgages

Published on: November 24, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, with Savage, Combs & Villoch, PLLC

On November 17, 2014, the United States Supreme Court granted a petition for writ of certiorari in two cases: Bank of America, N.A. v. Caulkett (In re Caulkett), 566 Fed. Appx. 879, 2014 U.S. App. LEXIS 9407 (11th Cir. Fla., 2014) and Bank of Am., NA v. Toledo-Cardona (In re Toledo-Cardona), 556 Fed. Appx. 911, 2014 U.S. App. LEXIS 9035 (11th Cir. Fla., 2014). In both cases, the United States Court of Appeals for the Eleventh Circuit ruled that a Chapter 7 debtor could strip off a second mortgage when the home’s value fell below the amount owed on the first mortgage.

What that ruling means is, if you file bankruptcy and the second mortgage on your home is completely “underwater,” like many second mortgages after the recent housing bust, then you could keep your house subject to the first mortgage and strip off the second mortgage completely leaving the debt secured by that second mortgage to be discharged in the bankruptcy. In the Toledo-Cardona case, the debtor kept his home and stripped off the second mortgage that had a value of over $100,000.00. That is why Bank of America and other lenders are not pleased with the decision.

Evaluating a Chapter 13 Bankruptcy

Published on: November 20, 2014 | by Savage Villoch Law, PLLC

Many Bankruptcy Attorneys in Tampa will tell you, people often ask whether or not they should file Chapter 13. The answer is that, every situation is unique and so there is no, one-size-fits-all answer. Bankruptcy Attorneys in Tampa could answer questions and evaluate a debtor’s situation to determine which type of bankruptcy filing is most appropriate.

However, a pros and cons list may help you figure out which kind of bankruptcy might work for you.

The Pros of Chapter 13: