Huntington Beach Coronavirus (COVID-19) Related Bankruptcy Attorney
In the best of times, businesses and families struggle with economic stress. A reduction in income or a job loss can harm a family’s ability to pay their monthly expense while a poor month or two of profits could make running a business unstainable. Significant debt can feel overwhelming and downright debilitating. Now, when the state is suffering the effects of the coronavirus pandemic, more California businesses and residents are facing an uncertain financial future.
Often, bankruptcy is a useful tool in helping someone manage or eliminate debt. Additionally, filing for bankruptcy could provide a business with the opportunity to reorganize its financial obligations under the protection of the court. Depending on the specifics of your situation, you may be able to benefit from Chapter7, Chapter 13 or Chapter 11 bankruptcy. If you were contemplating filing for bankruptcy before COVID-19 struck the state, or if the current “shelter-in-place” directives have placed you in an untenable financial position, our Huntington Beach coronavirus (COVID-19) related bankruptcy attorneys are ready to assist you. Call The Bankruptcy Group at 888-710-4334 to schedule a free, confidential consultation.
Filing For Chapter 7 In Huntington Beach, CA
A “liquidation” or Chapter 7 bankruptcy is a relatively short legal process that was designed to eliminate the majority of an individual’s financial obligations. If you are eligible to file Chapter 7, you could ease your financial burden in a few months by discharging your unsecured debt. In some cases, a Chapter 7 debtor will be required to sell a portion of their property to pay their creditors. However, there are a number of protections, or exemptions, available that permit a debtor to maintain possession of the bulk of their property. It is essential to discuss your situation in detail with our experienced Sacramento bankruptcy attorneys to determine if Chapter 7 is a beneficial option.
The Benefits Of Chapter 13 For Huntington Beach And California Residents
Chapter 13 provides many benefits to people, such as saving a home from foreclosure. A much longer process than Chapter 7, Chapter 13 requires a debtor to file a bankruptcy plan. Under the terms of the proposed plan, a Chapter 13 debtor will pay back a portion or all of their debt over three to five years. If a debtor’s income is too high to qualify for Chapter 7, filing for Chapter 13 could still result in a much more manageable payment plan than would be offered by any creditors.
Chapter 11 For Huntington Beach Businesses
If a failing business needs to reorganize, Chapter 11 could provide a means to keep it financially viable. Under Chapter 11, a company will retain possession over the business assets but have a fiduciary duty towards its creditors. Control of the business may be placed in the hands of a court-appointed trustee. Chapter 11 is more complex and flexible than either Chapter 7 or Chapter 13. The financial shape of the business and types of creditors will largely determine the course of the bankruptcy.
The Coronavirus And Bankruptcy In Huntington Beach, CA
COVID-19 has had an adverse financial impact on millions of American citizens and businesses, and those local to Huntington Beach are no exception. To help stimulate the economy and ease the burden, Congress recently passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). While providing much-needed stimulus funds to many Californians, the CARES Act also amended parts of the Bankruptcy Code.
How The CARES Act Benefits Individuals Filing For Bankruptcy In Huntington Beach
Provisions of the CARES Act offer individuals filing for bankruptcy some relief from the effects of the pandemic. A debtor in Chapter 13 is required to make monthly trustee payments. With the number of closed businesses and lay-offs attributed directly to the “shelter-in-place” orders and the coronavirus, many debtors are struggling to make these payments along with their regular monthly expenses. Now, if a debtor suffered a “material financial hardship” directly related COVID-19, they could petition the court to modify the terms of their bankruptcy plan. The CARES Act permits debtors an additional 24 months beyond the 60 months that are typically allowed under the Bankruptcy Code. This will allow a debtor to lower their monthly payment substantially.
A debtor’s income is essential in determining eligibility to file Chapter 7 or determining the amount that is paid to unsecured creditors in Chapter 13. Under normal circumstances, income in bankruptcy is broadly defined and would include everything from the debtor’s salary, tax refunds, gifts, and contributions from friends or family members. However, under the amended provisions, any funds received from through an economic stimulus program will not be considered income in a bankruptcy.
Chapter 11 Bankruptcy And The CARES Act
The Bankruptcy Code was recently amended by the Small Business Reorganization Act of 2019 (SBRA), which made Chapter 11 bankruptcies more efficient and cost-effective for smaller California businesses. The CARES Act further amended the new rules and regulations in some of the following ways.
- The deadlines associated with a typical Chapter 11 case have been reduced or eliminated in an SBRA case.
- A small business filing under the SBRA and CARES Act amendments are not required to pay quarterly U.S. Trustee fees.
- An SBRA case will not subject a small business to a creditors committee.
- While the court will appoint a trustee to the case, their purpose will be to oversee the bankruptcy process and offer guidance.
- Under the SBRA provisions, only the business is permitted to file a reorganization plan.
Call Our Huntington Beach Coronavirus (COVID-19) Related Bankruptcy Attorney For A Consultation
COVID-19 is having a dramatic impact on individuals and businesses across the country. People in Huntington Beach who were struggling financially before the pandemic struck are facing additional hurdles. Our Huntington Beach coronavirus (COVID-19) related bankruptcy attorneys are dedicated to helping people and businesses under a financial strain, especially under these uncertain and unprecedented times. Call The Bankruptcy Group at 888-710-4334 for a free, confidential consultation.