Bankruptcy – Blessing or Bad Choice?
J.C. Penney, Neiman Marcus, Hertz Ren- a Car… the list goes on and on of large American companies filing for bankruptcy because of the corona virus. The real estate and restaurant industries have been especially devastated. Individuals losing their jobs and being unable to pay their bills have resulted in a record number of individuals filing for bankruptcy.
By filing bankruptcy, companies can benefit in many ways including (1) stopping lawsuits, (2) stopping creditors from re-possessing equipment, and (3) preventing creditor harassment. These companies are given “breathing room” to either restructure their businesses or, if necessary, liquidate and close down. But there can be immediate had consequences such as (1) difficulty in getting credit, (2) losing suppliers, and (3) having an immediate negative impact on a company’s credit score. For individuals, many debts and perhaps all depts will be cancelled or “discharged” but the individual’s credit will be damaged and the bankruptcy filing will be a public record for 10 years.
Is it worth it to file bankruptcy? Can I keep my home? Will my student loans be cancelled? Am I responsible for my spouse’s debts? There are so many complex issues involved in a potential bankruptcy filing that they cannot be answered in this brief description of legal services. An insolvent person or company facing bankruptcy should have a lengthy, detailed consultation with an experienced attorney so that a filing results in a blessing instead of a bad choice.
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Paul has praticed law for 46 years. Before that, he once served in the Battleship, New Jersey from 1968 to 1969. He has been selected and honored to lecture other lawyer on the subject of how to conduct in New York.