Rocky Mountain Law - Family Law - Divorce - Probate - Estate Administration - Bankruptcy - Chapter 7

What happens to creditors after a company files for bankruptcy? Tim Cella used to work at several law firms When a company files for bankruptcy (under chapter 11), it is able to restructure its debts and pay back creditors in a way that allows the company to stay in business. This can be a complicated process, however, and many creditors are stuck with unpaid bills that they aren't likely to recover anytime soon. Recent examples of companies that have filed bankruptcy are Delta Airlines, Sears Roebuck & Co., General Motors Corporation (GMC) and others. A company's creditors are generally listed in order of priority: secured creditors, unsecured creditors, priority creditors (e.g. taxes) and shareholders. Secured creditors are those with collateral on which they could potentially collect if the debtor failed to pay. For example, if a person has a car loan through their bank and the bank later repossesses their car because they defaulted on the loan, then the bank is consider...

  If we pay our tax debt in full, can we file for bankruptcy? Tim Cella used to work at several law firms It depends. You aren’t typically penalized in bankruptcy court for having paid your taxes in full. But if your tax debt was your only debt, you won’t need to file bankruptcy anymore. There are different categories of debt in a bankruptcy case. There are secured, unsecured, priority and non-dischargeable debts. Taxes are a priority debt in a bankruptcy case, meaning they are treated differently from secured and unsecured debts. In fact, sometimes taxes are non-dischargeable in a case. There are a few additional facts that  a bankruptcy attorney  would need to review with you to see if you are in a position to file bankruptcy or not (besides the means test etc.) — First, what kind of taxes did you pay in full, were they business taxes (like payroll) or were they personal taxes. Also, how old were the taxes and then, can this payment be considered  a preferential tr...

  How do creditors serve you? Tim Cella Former Paralegal at  Ascent Law  (2018–2021) The typical way you are served with a lawsuit from a creditor is by hand delivery by either a constable or process server. This depends on which forum you are being sued in. You are hand delivered a summons and a complaint. Sometimes these are mailed. You should speak with a  lawyer  if you receive something that appears to be a lawsuit to protect your rights. Creditors can serve you with a lawsuit when you fail to pay off a debt. A summons, or legal notice, notifies you of the lawsuit and tells you when to appear in court. If you ignore the summons, you may face a default judgment, garnishments on your wages, and even a lien on your property which can result in your having to file for bankruptcy. When you respond to a lawsuit it is called filing an Answer with the court. If you do it on your won, you are held to the standard of a lawyer - courts usually aren’t lenient...

  Is sleeping in separate beds a sign of impending divorce? Tim Cella Former Paralegal at  Ascent Law  (2018–2021) Some people would say that sleeping in separate beds is a sure sign of an impending divorce. There are other people that say it's okay as long as you still have sex. I don't think anyone is right. At first glance it might make sense—you're not together, so you can't physically stay together. But there are tons of couples who sleep in separate beds and have healthy relationships. I'm one of these couples. We don't share a bed at night, but we still love each other a lot and have fun together every day. We've been married for four years and we're still very happy together. The problem with co-sleeping is that it really cuts into personal space. We both want to be able to stretch out and be comfortable when we go to sleep, which means we need our own space to do that. Also, my husband tends to move around a lot when he sleeps—sometimes kicking ...

  Do you have to pay anybody after declaring bankruptcy? Tim Cella used to work at several law firms This depends on the chapter of bankruptcy you file and your liquidation analysis results. When you declare bankruptcy, a lot of people assume that you have to pay off all your debts to the people you owe money. The truth is that you don't have to pay anybody unless a debt is non-dischargeable or your assets and income exceed your debts. There is a liquidation analysis that your attorney should do and that the trustee will do to make sure you aren’t taking advantage of the bankruptcy laws. So, depending on the specifics of your case, if you are in debt and you declare bankruptcy, you may not have to pay anybody. It’s fact specific. Basically, you can't declare a Chapter 7 bankruptcy if you have a lot of assets, like cars or a house with a ton of equity in them and lots of assets — well, you can, you just might not like the outcome of that case. Generally, your best bet if you wan...

  How do you collect a judgment if the debtor files bankruptcy? Tim Cella used to work at several law firms The short answer is you typically don’t. If the debtor files bankruptcy, then an automatic stay goes into effect which prevents the judgment from being collected against the debtor. However, depending on what happens in the bankruptcy case you may still be able to collect either through the bankruptcy case or, if the case is dismissed (not discharged), then you can collect on it. In Utah, if you have recorded the judgment as a lien against real property, then your lien rights usually will remain in effect even if the judgment debtor does not legally owe the money due to a bankruptcy discharge. Each states laws are different so this is a situation you should absolutely speak with an attorney about. If you have a moment, call  this law firm  for a free bankruptcy consultation. Ascent Law LLC 8833 S Redwood Rd Suite C West Jordan UT 84088 (801) 676-5506 AscentLaw - Goo...