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Orange County Bankruptcy Law Blog

Business overwhelmed by debt? Chapter 11 is an option for you.

You know that bankruptcy is an option for individual consumers who are overwhelmed by debt and unable to manage payments owed to creditors, but you may not realize that bankruptcy is also an option for business entities that have overwhelming debt as well. Chapter 11 bankruptcy may offer relief and debt reorganization for businesses in difficult financial circumstances.

If you own and operate a business, you know how expensive it can be to run day-to-day operations and keep up with your financial obligations. Over time, these expenses can become overwhelming, eventually resulting in a significant amount of debt. By filing for Chapter 11, you may find relief and a solution to some of your California business' complex money concerns.

Don't make the mistake of assuming who your heirs might be

If you're the parent of one or more young adult children, you've probably wondered at how quickly time seems to pass. In fact, you might recall the moments you first brought your infants home from the hospital, their first days of school, when they learned to ride bikes, etc., as though these milestones occurred only yesterday. In reality, you know that two or more decades have passed, and you're concerned about your loved ones' futures, along with whether you have taken appropriate steps to provide for them when you're gone.

Many California residents execute thorough estate plans to protect their assets and retain as much control as possible over their own finances and health care. Others shy away from the topic, which often results in stressful situations for their family members when the time comes to administer their estates. One thing is sure: Your estate will be administered. It's merely a matter of who makes the decisions, you or a probate court.

Want your family to avoid probate? Explore these 3 planning tools

Because you love your family, you undoubtedly want to make your eventual passing as easy on them as possible. Estate planning can offer many options for doing just that as you can plan the handling of your estate rather than leaving it up to your family to decide while they go through the grieving process. Therefore, no matter your age, you may wish to get a jump-start on your planning.

Taking advantage of creating such a plan can even allow you to help your family avoid probate. This avenue appeals to many individuals as it can protect assets and funds from diminishing due to court costs and other expenses associated with the process. You may utilize a variety of planning tools to assist in this endeavor.

Drowning in debt? You don't have to lose the farm.

Countless individuals have experienced periods of significant financial struggle throughout the course of their lives. Perhaps unexpected events have caused you to fall behind, and you are unable to maintain a certain quality of life needed for you and your family. You might have the ability to pay a certain amount of your debt, but the entirety of it might have you in a financial stranglehold.

If you are considering available options, but wish to avoid liquidating certain assets, you could consider filing for Chapter 13 bankruptcy. This type of bankruptcy can help you retain possession of assets, such as your house, while giving you a certain amount of time in which to repay required debts.

Is creating an estate plan really that necessary?

Estate planning is an important step to take to ensure that your health care and final property wishes are met. Creating an estate plan in California is also helpful for making sure that surviving family members receive the provisions they need when you are gone. Unfortunately, it is often put off to focus on seemingly more pressing needs, although this can be risky since disability or death can strike at any time.

Bankruptcy liquidation does not mean you are left with nothing

Before taking any sort of legal action, it is good to question how taking such a step will truly affect you in the long run. For instance, if you are facing serious economic difficulties - whether you reside in California or elsewhere - a Chapter 7 bankruptcy, if approved, can clear out most, if not all, of your debts, giving you a clean financial slate. This leaves some to wonder if this means they will be starting over with nothing.

While the fiscal relief offered in a bankruptcy filing may be desirable, the thought of losing all of one's property can give people reason to pause before going through with it. Yes, in a Chapter 7 filing, the liquidation of certain assets is a requirement, but there are some items that are exempt from the process.

Give your parents their voice for healthcare wishes

It's the last thing you want to talk about. No one looks forward to the conversation with their parents about incapacity and health care. It is an emotional and stressful topic. Unfortunately if you do not address it the end result will be tenfold more stressful. Most importantly, without this conversation, your parents will not be able to communicate their wishes upon incapacity.

As people age it becomes more likely that they could suffer incapacity due to illnesses such as Alzheimer's disease, dementia or coma. If your parents become injured or sick without incapacity documents then they will be unable to explain their desires for treatment. They will not be able to explain their requests for care or what to do in case of resuscitation. The decisions will fall on the shoulders of physicians, court-appointed guardians, lawyers and judges. These people will likely be unaware of your parents' true wishes.

Can you afford NOT to have an attorney in a bankruptcy?

Why would you spend money on an attorney when you struggle to pay your debts already? It seems like taking a step backwards, but it helps ensure you receive a discharge at the end of the bankruptcy. The process entails deadlines, paperwork and legal requirements that easily induce frustration and stress when attempted alone.

Is debt threatening the success of your business?

Owning and operating a business is difficult, and, sometimes, it costs a great deal of money simply to maintain operations, purchase inventory and pay employees. If you find that you have accumulated a great deal of debt that is now threatening your California business and livelihood, it is important to deal with it effectively in order to protect your long-term interests.

For some businesses, bankruptcy offers a way to both deal with overwhelming debt and maintain control of day-to-day operations. Chapter 11 is a common choice for business debt and is also known as reorganization bankruptcy. One of the many benefits of Chapter 11 is that it allows the applicant to pay off debts over time while still keeping business assets.

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