Garnishment or Seizure of Bank Accounts by Creditors If you owe money to a creditor (or debt collector), it can obtain a money judgment against you and have the funds in your bank account frozen and paid over to them. If a creditor takes you to court to recover any money owning to them, and wins, the court will issue a judgment. If you still fail to pay the amount the court ordered you to pay, the creditor can then ask to court to issue a’Writ of Garnishment.’ → Read More
What types of property are exempt from execution and levy? Each state has its own laws which exempt certain property from being subject to execution and levy. However, it is important to note that even within these exemptions, there are exceptions to these exemptions and they vary by state. Your home, or’homestead property,’ always falls into this exemption, but may depend on what type of judgment is being enforced. → Read More
Can a business that has filed a Chapter 7 bankruptcy start another business after liquidation? When a business files Chapter 7 bankruptcy liquidation, that business essentially no longer exists. The assets of the business are sold and the proceeds distributed among the creditors the business owed. The debts are forgiven, but the business doesn’t really have anything left. However, this doesn’t necessarily mean that a new business can’t be started or that the existing business can’t find a new lease on life after a Chapter 7 bankruptcy. → Read More
Where can I get information about the bankruptcy status of a particular business? There are times when you may need to know whether a company is in bankruptcy. Because both individual and corporate bankruptcy are considered public information under federal law, there are several ways to find out if a company has filed for bankruptcy. Many times corporate bankruptcies are reported in the news or on investment wires. → Read More
If I own worthless stock, can I at least get a tax deduction? If you invest in stock that loses its value completely, it is possible to claim this loss as a tax deduction, but you must do so at the correct time and only after making sure that the stock has actually lost all technical value. For example, if the company has declared Chapter 7 bankrtupcy, been liquidated and gone out of existence altogether, it will be considered worthless stock. → Read More
Who gets paid first in a business bankruptcy? Federal rules regulate the order in which creditors receive payment when a company is liquidated through a business bankruptcy. That order is generally based on who assumed the most risk when issuing money to the company. It’s important to note these are general guidelines established by Sec. 507 of the Bankruptcy Code, which includes various exceptions. For example, secured creditors may actually get bumped down in priority if they fail to file their proof of claim. → Read More
What property might I lose in Chapter 7 bankruptcy? What property you will lose and what you may keep in a Chapter 7 bankruptcy case depends on your state’s law and the types of exemptions, like wildcard exemptions, available in your jurisdiction. → Read More
Chapter 7 Exemptions Bankruptcy exemptions refer to assets that you may keep when you file for Chapter 7 bankruptcy. As a general rule, Chapter 7 or total liquidation bankruptcy will require that you surrender most of your cash and many of the possessions you own so these items can be sold. → Read More
Filing Chapter 11 Bankruptcy Chapter 11 bankruptcy is a specific category that is used by businesses. Chapter 11 is not a total liquidation. Instead, Chapter 11 bankruptcy offers the business a chance to work out payment plans and schedules and stay in business while attempting to pay off creditors with the assistance of the bankruptcy court. → Read More
An Introduction to Bankruptcy Exemptions Figuring out which bankruptcy exemptions to use and how to use them is one of the most challenging parts of filing for bankruptcy. It’s difficult because bankruptcy law is a confusing mixture of federal and state law. From bankruptcy exemptions concerning your estate to specific state ‘wildcard’ exemptions, this article explains the various bankruptcy exemption that might be available to you. → Read More
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