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Student Loans are inching toward normalization with other dischargeable debt in Bankruptcy
The Student Borrower Bankruptcy Relief Act has been initiated by the House to eliminate the Bankruptcy Code’s ambiguous barrier to student loan discharge, which has been read to require a showing of severe financial hardship if the debtor is forced to re-pay. This complements the judicial trend to discharge private student debt to effect the policy of…
Read MoreDemystifying Bankruptcy: More on tenant tips
Filing for bankruptcy can help a tenant break a long-term above-market lease, as bankruptcy law provides the tenant with a special cap on damages at three years rent. Planning ahead is key, and on the flip side, a landlord can head off a potential major loss by keeping tabs on its tenants’ financial portfolios as…
Read MoreDemystifying Bankruptcy: Filing for bankruptcy can never cause a contract default
For example, a typical clause in leases states that a tenant’s filing for bankruptcy causes a default, allowing the collection of remedies. This is merely a scare-tactic and is known as an ipso facto clause that has zero legal effect. In fact, a bankrupt tenant can even make the unilateral decision to continue the lease.
Read MoreDemystifying Bankruptcy: Avoid “fraudulent transfers”
A salary raise by a distressed business entity for no services, or transfer of funds to a new entity for no value are prime examples of fraudulent transfers, as reasonably equivalent value has not been exchanged. These deals are vulnerable to unwinding, but with advance planning, the outcome can be a win-win for all.
Read MoreDemystifying bankruptcy: Start your prep 3+ months ahead
Planning is key. Payment by an insolvent entity for old debt is known as a “preference,” and the creditor may have to disgorge in bankruptcy if it received a greater payout than it would in Chapter 7. As the key to bankruptcy is equitable distribution, the creditor will be paid only its pro rata share. To…
Read MoreDemystifying post-Bankruptcy Credit Opportunities
Credit scores can begin an uptick fairly quickly after the completion of a bankruptcy case. Borrowing can begin within a few months via secured credit cards or credit-builder loans, and VA or FHA mortgages can be obtained within two years. Moreover, increasing innovations in fintech should yield more non-traditional opportunities. In sum, while bankruptcy may remain on …
Read MoreDemystifying the Negative Mystique of “Bankruptcy”
Bankruptcy law is designed to give us all a fresh start. Most people don’t have to give up their basic possessions and can keep $25k plus of equity in their homes. They can choose between immediate discharge relief under Chapter 7, or instituting a repayment plan under Chapter 13, if their assets are beyond the…
Read MoreLet’s Discuss Entrepreneurship, Digital Music & Virtual Office Space
This Fall season, Carolyn Hochstadter was a featured speaker in a number of venues for Wharton Clubs, a Jenkins Law Library CLE, and a Women Owned Law Webinar. Topics included Key Legal Concerns facing Entrepreneurs, Viable Business Models in the Digital Music Era and the Pros & Cons of the Virtual Office vs. the Traditional…
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