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Posts Tagged ‘chapter 13’

An Individual Chapter 11 Plan must be funded by more than Business Income

In re Patel, a recent CA bankruptcy decision, held that chapter 11’s requirement for individual debtors to pay unsecured creditors  from “disposable income,” encompasses income from all sources.  Note that this would equally apply in Subchapter V.  The Patel Chapter 11 plan listed only motel income which was insufficient to fund a payout to unsecured creditors.  While…

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A defaulted chapter 13 plan can be extended under the CARES Act

Good news!  A New Orleans judge has found the CARES Act to permit a 7 year extension of a chapter 13 plan whose payments were in default prior to enactment of the Act, holding that the currency of payments is irrelevant. In fact, most chapter 13 plans are in a state of default and ultimately…

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Is a PA Gaming License property that can be clawed back in bankruptcy?

The Commonwealth of PA was recently permitted to sustain revocation of a debtor’s gaming license and keep the $50M paid per state forfeiture laws, as a license is considered a privilege versus reclaimable property.  This is yet another example of the intricacies of pre-bankruptcy planning, as lawyers and debtors collaborate to re-tool with minimal friction.

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Averting Bankruptcy: PPP loan forgiveness to be launched

The SBA is thankfully beginning to forgive PPP loans, staving off the backlog blocking new loans, as well as averting bankruptcy filings in the face of mounting debt.  Legislation is also being drafted to streamline the paperwork for forgiving small loans, by permitting borrowers to self-verify to the proper use of funds.    

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Demystifying 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…

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Demystifying 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…

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