MGM230Group Updated with Kimberly Willia

MGM230-0801A-03 : Introduction to Business Law Chapter 11 Group Project : 

MGM230-0801A-03 : Introduction to Business Law Chapter 11 Group Project Kreg Warrick, Kimberly Williams, Hazel Woodson, Renell Welch Cynthia Y. West-Galbreath February 5, 2008

Chapter 7 : 

Chapter 7 Chapter seven is also know as liquidation and straight bankruptcy (Cheeseman, 2007, p 428). After a business files a chapter seven, A trustee is assigned to collect and sell the non-exempt property belonging to the debtor for cash (Cheeseman, 2007, p. 428). Shortly after file chapter seven the business owner will attend a 341 hearing. At this hearing the creditors may or may not attend. The owner will be asked several questions in relation to the information on Hazel M. Woodson

Chapter 7 continues…. : 

Chapter 7 continues…. the document file. The creditor are entitled to ask question during this hearing in relation to the documents that they brought with them. This can be a very quick procedure, if there is not fraud found on your behalf. After the completion of the 341 hearing the owner will receive a discharge. This normally takes place without the owner being present (www.skelegal.com). Hazel M. Woodson

Federal Guidelines : 

Federal Guidelines Student loans Federal, local, and state taxes Money borrowed or credit cards charged to pay off taxes Child support Alimony Criminal crimes fines Money owed for co-op or condo association Debts from previous filed bankruptcies that were dismissed Hazel M. Woodson

Federal Guidelines Continue… : 

Federal Guidelines Continue… Filing Fee Payment of fee in installments Postponement of Attorney's Fee Waiver of Filing Fee Creditor List Holders and Corporate Ownership Statement Hazel M. Woodson

Chapter 7- Advantages : 

Chapter 7- Advantages Wipe out most credit debts Establish credit Create new credit Can stop harassment of creditors Prohibits discrimination Hazel M. Woodson

Chapter 7 Disadvantages : 

Chapter 7 Disadvantages On credit report for 10 years. Don’t clear all debts. Public records Any debts acquired within sixty days are not dischargeable. Non-exempt property is sold Temporarily stops foreclosure Anyone that co-sign is liable for debt Hazel M. Woodson

Chapter 7 Disadvantage continues… : 

Chapter 7 Disadvantage continues… Hard to file Damages your credit rating Can only file once in every six years. Hazel M. Woodson

Chapter 11 : 

Reorganization Bankruptcy Win, Win Fresh Start (Cheeseman, 2007) Converted to Chapter 7 Chapter 11 Kreg Warrick

Chapter 11 : 

Debtor in-possession Enter into contracts Automatic Stay Executory Contracts and Unexpired Leases Chapter 11 Kreg Warrick

Chapter 11 : 

Schedules Secured and Unsecured Creditors List of all property owned Statement of financial affairs Statement of Income Current Profit and Loss Chapter 11 Kreg Warrick

Chapter 11 : 

Creditor Committee Labor Union and Retiree Benefits Plan of Reorganization Discharge Chapter 11 Kreg Warrick

Chapter 13 : 

Chapter 13 * Sole Proprietor or Partner- can include all business debts on which you have personal liability. (U.S. Courts) * Excluding: Stock Brokers & Commodity Brokers * LLC Or Partnership can not file Chapter 13 *If you want to file a reorganization bankruptcy in that situation, you must file a business Chapter 11 bankruptcy. (U.S. Courts) Which will furthered be discussed under the Chapter 11 Bankruptcy Section. (U.S. Courts) Kimberly Williams

Chapter 13 Advantages : 

Chapter 13 Advantages Offers individuals an opportunity to save their homes from foreclosure State the purpose of the discussion( Allows individuals to reschedule secured debts (other than a mortgage for their primary residence ) Chapter 13 also has a special provision that protects third parties who are liable with the debtor on "consumer debts." (This provision may protect co-signers) ( The Truth About Bankruptcy) Chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors ( The Truth About Bankruptcy) Kimberly Williams

More Chapter 13 Advantages : 

More Chapter 13 Advantages You keep all your property, exempt and non-exempt. You have a longer period of time to pay the debt. The debts that are not canceled in a Chapter 7 discharge can be reduced in a Chapter 13 payment. You have protection against creditor's collection efforts and wage garnishment. Any co-signers are immune from the creditor’s efforts so long as the Chapter 13 plan provides for full payment. You have protection against foreclosure by your lender of your home. You can file a Chapter 13 after your Chapter 7 discharge to pay off any remaining liens. You can file repeatedly. Kimberly Williams

Chapter 13 Disadvantages : 

Chapter 13 Disadvantages You pay your debts out of your disposable (post-bankruptcy) income. This ties up your cash over the repayment period. Some debts will survive after your bankruptcy is closed and you must continue paying. Legal fees are higher since a Chapter 13 filing is more complex. Your debt must be under $1,000,000 (e.g., unsecured debts are less than $250,000 and secured debts less than $750,000). Your debt can linger for years, burdening future income. Stockbrokers, and commodity brokers cannot file a Chapter 13 bankruptcy petition. Kimberly Williams

Benefits to Filing Bankruptcy : 

Benefits to Filing Bankruptcy Getting a fresh start? Exempt Property Use an attorney Renell Welch

The Negative Affects of Filing Bankruptcy : 

The Negative Affects of Filing Bankruptcy Are there alternatives to filing? How many businesses file for bankruptcy? Being a future credit risk Social stigma Renell Welch

Federal Guidelines : 

Federal Guidelines 2005 Act Federal v. State guidelines Bankruptcy in the U.S. Renell Welch

References : 

References Cheeseman, H. (2007) Business Law. Sixth Edition. Upper Saddle River, NJ: Pearson Prentice Hall. Chapter 11 – Bankruptcy, Retrieved 2/4/08, from http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter11.html U.S. Courts Advantages and Disadvantages of Chapter 13 Retrieved January 27, 2008, from: http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html# advantages The Truth About Bankruptcy, Retrieved January 28, 2008, from: http://www.daveramsey.com/the_truth_about/bankruptcy_3018.html.cfm Bankruptcy Information, Retrieved January 28, 2008 from: http://www.bankruptcyaction.com/questions.htm Knaup, A. “Survival and Longevity in the Business Employment Dynamics Data” (2005) Monthly Labor Review: 50-52

References: : 

References: U.S. Courts. (n.d.) Bankruptcu Courts. Chapter 7 Fee Waiver. Retrieved Januray 28, 2008, from http://www.uscourts.gov/bankruptcycourts/Pages1_3_BKInterimRulesRedlines.pdf Cheeseman, H. (2007). Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues. (Sixth Edition). Upper Saddler River, NJ: Pearson-Prentice Hall The law Offices of Steven K. Eisenberg, P.C. (22 February 2001). Bankruptcy-Reorganizations and Financial Workouts. Retrieved January 26, 2008, from http://www.skelegal.com/personalchapter7.htm The law Offices of Steven K. Eisenberg, P.C. (22 February 2001). Business Bankruptcy. Retrieved January 26, 2008, from http://www.skelegal.com/BusinessBankruptcy.htm Images (2008) Retrieved January 28, 2008, from http://www.images.com/SwishSearch?Keywords=finances Images (2008) Retrieved 29, 2008 from http://www.images.com/SwishSearch?Keywords=stairs

References Continued… : 

References Continued… WFRV-TV5. (2008). Advantages and Disadvantages of Chapter 7. Retrieved January 14, 2008, from http://www.wfrv.com/guides/legal/bankruptcy/story.aspx?heading=Chapter+7%3a+Liquidation&content_id=b61399ec-0d3a-46c2-a9ba-2933122b4055