Filing for Bankruptcy or Divorce First? (2 of 2)

Why is this the right choice?

Simply put, by filing jointly, you can get rid of all of your joint debts together. The other possibility is that you may even increase your exemption amounts.

If one spouse is considered the breadwinner in the marriage, this is also a helpful solution because it gives that spouse a better chance of qualifying for Chapter 7 bankruptcy.

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Filing for Bankruptcy or Divorce First? (1 of 2)

Are you ready to file for bankruptcy? Is a divorce filing also looming on the horizon? Getting this right all comes down to timing. This critical factor will play a role in whether you file bankruptcy or divorce first. Please continue reading to find out if you should file for divorce before or after a bankruptcy filing.

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Rash of Restaurant Bankruptcies Concern Industry

Cosí Inc. surprised no one when it filed for bankruptcy last year. For the three years prior to the filing, the company is on record for losing $15.5, $15.8 and $11.5 million. Of its 100 locations, 29 were closed without warning.

Unfortunately, the financial strife this chain suffers is becoming far too common and uncomfortable for the industry. A number of high profile chains have found themselves going the courtroom route to protect themselves. In the year prior to Cosí’s filing, Johnny Carino’s, Zio’s Italian Kitchen, Logan’s Roadhouse, Champps and other restaurants all filed.

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Former NBA Basketball Star Files for Chapter 7 Bankruptcy

Basketball careers seem alluring for thousands of young men across the country. Promises for a luxurious lifestyle and exciting career can often overshadow the dramatic financial losses that a large number of former players experience after they retire.

One of those former players is Darius Miles.

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Golfsmith International Holdings Files for Chapter 11 Bankruptcy

Golfsmith International Holdings Inc., an American golf retailer, filed for bankruptcy in a bid to find a way out of the predicament that the company has found itself in. The case was filed in the Delaware court where it listed debts of $500 million. According to the Chapter 11 protection that the company filed, the management will first try to sell part of the company chain of stores and consider closing some of them. If that doesn’t work, the resolution of the directors is to liquidate.

The Chapter 11 filing is before the U.S Bankruptcy Court for the District of Delaware. The United States Bankruptcy Code refers to the Chapter 11 as a reorganization petition that can be lodged voluntarily by the debtor or involuntarily by the creditor. The biggest creditor of Golfsmith is Callaway Golf Co. with an unsecured debt of 5.5 million.

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Luke Palladino Bankruptcy Case

One of Atlantic City’s most popular chefs, Luke Palladino, has declared Chapter 7 bankruptcy.

Palladino has been well-known in Atlantic City as well as the professional cooking world for nearly 15 years. Not only has he declared Chapter 7 bankruptcy, but he also lost his most recent restaurant, located in South Jersey.

As of early September 2016, you could still listen to restaurant details via answering machine from his restaurant Luke Palladino Seasonal Italian Cooking, located in the Central Square shopping area of Linwood. However, the answering machine was not accepting messages and there was no way to contact the owner.

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Should Companies in Bankruptcy Award Executive Bonuses?

From the beginnings of America—perhaps, even, Western Civilization—tension existed between labor and management. There is a disconnect in vision, in perspective and in experience. One side wants adequate wages and benefits with which to live a comfortable life. Meanwhile, the other side looks to make a profit for the owners and shareholders. While there are times when all parties are happy with both employee compensation and corporate dividends, more often than not, somebody is dissatisfied with their bottom line. Among the starkest examples of bad blood between labor and capital occurs in the event of bankruptcies, their causes and effects.

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Many Cancer Patients Face Bankruptcy

The escalating costs of cancer treatments are forcing many cancer patients to consider bankruptcy. Latest statistics show that a large percent of patients under the age of 65 are forced into finding financial relief from their medical bills when being treated for cancer. Sadly, the financial strain on these patients often affects their health in a negative manner.

Why Are Costs So High?

A burning question throughout the United States is what makes the cost for cancer treatments so high. In a country that leads the world in research and development of medications, it is hard to believe that the use of those treatments often places people into bankruptcy.

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Barrett Bankruptcy Case

A jury awarded Fox Sports broadcaster Erin Andrews $55 million in damages from stalker/voyeur/pornographer Michael Barrett for removing the peephole from the door to her hotel room, recording videos of her undressed, and posting them on the Internet. Barrett pleaded guilty to a criminal offense of videotaping her naked and publishing the clip, served a sentence of jail time, and filed for bankruptcy after his release.

Bankruptcy filers seek financial relief from their debts so they can start anew fnancially. Bankruptcy can eliminate or discharge most debtor obligations, but some are not dis-chargeable, and Barrett’s bankruptcy court has ruled that the $55 million Andrews claim is one such item.

Bankruptcy cases for adjustment of debts proceed under Title 11 of the United States Code. Under Title 11, Chapter 7 liquidates debtor assets, Chapter 9 bails out municipalities as debtors, Chapter 11 reorganizes debtors, and Chapter 13 is for individual debtors with regular incomes.

The bankruptcy law enables financially overwhelmed debtors to present plans to repay creditors to the extent of their ability. If the creditors accept a plan or, if the court finds it meets all requirements for confirmation, the court “shall grant the debtor a discharge.” [1]

In most Chapter 7 bankruptcies, assets are limited, and there is typically little or nothing with which to pay unsecured creditors following liquidation. What proceeds remain for distribution after payments on priority claims of taxes, child support, student loans, and the like generally receive only a pro-rata share of any left-over surplus.

The discharge eliminates only the debtor’s personal liability for unpaid obligations. It has no effect on liens against the debtor’s real or personal property.

Most Chapter 13 bankruptcy cases treat dis-chargeable debts as non-priority general unsecured claims worth little to creditors from Chapter 13 repayment plans; nevertheless, completion of plan payments discharges them.

Bankruptcy lawyers talk about non dis-chargeable debts that “follow you to the grave.” Most non dis-chargeable exceptions from discharge are automatic with no action by creditors necessary. Some exceptions, however, require creditor objections to their discharge and proof of exceptional debtor misconduct before the court deems them non dis-chargeable. One such exception is any debt for a “willful and malicious injury.” [2]

“Willful” means the debtor acted intentionally, “malicious” with knowledge that the act could cause injury or harm, which need not be grave or severe to satisfy the element of malice; the mere knowledge of likely injury is enough under case law. If the debtor did it on purpose and knew it probably would cause some injury, the consequential debt is non dis-chargeable.

Because the bankruptcy court expressly found debtor Barrett’s misconduct toward claimant Andrews to be a willful and malicious injury, his resort to personal bankruptcy to discharge her claim was denied.
Sources

[1] United States Code Title 11 Section 727(a) (11 US code 727(a)). A discharge “voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727, . . . operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and . . . operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect or recover from, or offset against, property of the debtor,” 11 US Code 524(a).

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What to Avoid When Filing for Personal Bankruptcy

Filing for personal bankruptcy can be a way to discharge or reorganize your existing debt. In addition to getting a fresh financial start, bankruptcy may also allow time to negotiate with creditors as you may be granted an automatic stay from legal action. However, just because you filed for bankruptcy doesn’t mean you will be granted the right to do so. What are some issues to avoid if you want your petition to be successful?

Don’t Make the Court or Creditors Think You Have Cash or Assets

After filing for bankruptcy, rapper 50 Cent posted pictures on social media of himself with stacks of cash. Afterwords he claimed the cash wasn’t real in the pictures.  While there may be nothing fraudulent about posing for a picture, it could make others question if you are telling the truth about your ability to repay your debts. In some cases, these questions could lead to your case being dismissed. It is also possible that a Chapter 7 case could be converted to a Chapter 13 case if it turns out you have income or other assets that can be used to repay your debts over a longer period of time.

Make Sure You Do Everything Asked of You

Prior to filing for bankruptcy, you may be required to take a credit counseling course. In addition, you may be required to attend a meeting with your creditors where they can ask any questions that they may have about your case. Other requirements may include paying filing fees and providing the court with personal and financial information. Information provided to the court may include recent tax returns, a list of all your assets as well as a complete list of your creditors and how much each is owed.

What Happens If Your Case Is Dismissed?

It is possible that your case could be dismissed. However, as long as you haven’t done anything egregious or designed to commit fraud, the case will be dismissed without prejudice. If this were to happen you can refile bankruptcy proceedings immediately and the automatic stay will still go into effect. If your case is dismissed with prejudice, creditors may attempt to make collection efforts.

If you need relief from your creditors, bankruptcy may be an option for you. However, make sure that you don’t do anything to undermine your assertion that you cannot pay your bills or need more time to pay past due amounts. The good news is that this can usually be accomplished by simply telling the truth and asking for help if you need it along the way.

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