Important Things You Need To Know Before Filing For Bankruptcy


13 February 2021



The aftermath of the COVID-19 Pandemic saw a string of businesses file for bankruptcy. The United States saw many B2B businesses including, FTK Worldwide (Jewellers), Contact Transport (Logistics and Supply), and others opt for the bankruptcy route.

Legal experts are of the opinion that no two bankruptcy cases are the same. They differ in terms of their exposure, risks, legalities, and the court judgment. Even if two companies file for bankruptcy under Chapter 7, their judgments and orders can be different.

In this article, we speak to a leading bankruptcy Birmingham law firm that specializes in these issues. we ask them about some important things businesses and their owners need to keep in mind before filing for bankruptcy.

List of Important Things you need to know before Filing for Bankruptcy

1. Chapters 7 and Chapter 13 are Important for Individuals and Businesses

Legal experts suggest that solopreneur ventures and sole proprietorships that are individual-centric should go for filing bankruptcy under Chapter 7. This puts a stay to debt and credit obligations and allows individuals to even retain control over their property.

Businesses that are well-established should opt for Chapter 11. This helps in keeping the business entity alive and allows for a payment restructuring plan that works to ensure complete repayment over a period of three to five years.

2. Hiring Legal Help is of High Importance


It is important to understand that individuals or businesses looking to file for bankruptcy should always avail of expert legal help. If you are trying to use Google to do all the paperwork, you might get into serious trouble in the near future.

Bankruptcy laws are incredibly complex and technical. In particular, Chapter 7 allows liquidation of debt to take care of financial obligations and absolve the individual from repayment. All collection attempts must stop. Subsequently, a bankruptcy trustee collects non-exempt valuable assets and sells them to pay off debt. The law discharges eligible debts, such as credit card loans, medical bills, and old utility bills. So, you need an experienced bankruptcy attorney to help you fend off the debtors, and work with the courts and the banking institutions. At the end of the day, you do not want criminal proceedings to be initiated by any of the parties.

You can hire an expert in your area, such as a Florida Chapter 7 bankruptcy lawyer. A bankruptcy lawyer’s job is to help you overcome debt, so they’ll guide you through the process by offering advice or assisting you in filing for bankruptcy protection.

3. Bankruptcy does not mean All Debts go away

Bankruptcy does not mean All Debts go away

If you were under the impression that bankruptcy is going to help you walk away scot-free think again. Legally, the following are some areas where bankruptcy will not be able to help you-

  • Alimony Payments
  • Student Loans
  • Taxes on Luxury Items
  • Taxes
  • Child Support Payments

All the above-mentioned areas and payments are not something that the court can give you relief from. If you miss your payments or taxes, new legal cases can be brought up against you in a court of law. The punishment and legal repercussions for the same will be different.

For this reason, it’s a must to talk to an experienced attorney and a personal financial advisor who can help you determine other options for addressing these problems. Social workers and community leaders can also help. The government and private sectors offer programs for citizens needing financial and social support services. They’ll help you get through difficult times, so don’t hesitate to consult them.

4. Your Credit Score will get Affected Post-Bankruptcy

Credit Score will get Affected Post-Bankruptcy

According to leading legal experts, ten years is the period where your credit score will carry the blemish of your bankruptcy declaration. If you are looking to get loans or credit during the period, the same might get very difficult. You need to be prepared to address the credit score.

Some lending companies may offer you a personal loan. But the interest rates are high. You can take the risk to recover gradually from poor credit standing. However, you’ll have to make sure that you pay your loan on time.

Fortunately, there are some professional services that have come up in recent years that can help you improve your credit score within a short period of time. If you want to get back in the game, you can always avail of such services.

5. Bankruptcy can help you give Yourself a Fresh Start in Life and Business-

It can be stated that most businesses that suffered because of the pandemic did so for no fault of their own. In such instances, legal experts suggest that bankruptcy can be a sound tactical and strategic decision that can be taken by businesses and individuals.

Banks, lending institutions, and even the judges that will be hearing the case are already aware of the drastic and negative economic fallouts of the pandemic. In fact, there have been cases, where the banks have discussed with lenders and worked out a positive restructuring plan to help individuals and businesses affected by the pandemic.

The Bottom Line

Filing for bankruptcy can probably the single hardest decision you would have to take in your entire life. However, rather than make the decision an emotional one, it is best to exercise reason and proper judgment and take help from an experienced legal attorney to find your way.

Read Also:

I enjoy writing and I write quality guest posts on topics of my interest and passion. I have been doing this since my college days. My special interests are in health, fitness, food and following the latest trends in these areas. I am an editor at Content Rally.

View all posts

Leave a Reply

Your email address will not be published. Required fields are marked *


Credit Report

How to Dispute an Error on Your Credit Report

Your credit score is one of the most important numbers as far as your finances go. It dictates the rates you get when borrowing a personal loan or line of credit. But it doesn’t stop there; it may have sway over your next job, apartment, or auto insurance policy. When it has so much power over your life, finding an error on your credit report is scary. Something outside your control could impact your score and stand in the way of getting a loan or a new job. With this in mind, it’s prudent you act fast as soon as you spot something wrong. Here’s what to do if you find an error on your credit report: Start a Dispute Each of the three major credit reporting agencies makes it easy to file a dispute. You can go online to start, or you may send a letter in the mail. In either case, you must tell them (in writing) what information is inaccurate. Equifax: Submit a dispute online Experian: Disputes online TransUnion: Start a new dispute Under the Fair Credit Reporting Act (FCRA) you have a right to contest any entry in your report. This means a major credit reporting agency must accept and investigate any complaints filed over inaccurate information. What Do You Need to Send? Before submitting your online dispute or letter, you need to make sure you can prove that inaccurate information doesn’t belong to your file. Check-in with this list to make sure you have everything you need. Personal Information: You’ll need to share identifying information like your name, address, date of birth, and Social Security Number (SSN) to create an inquiry. Disputed Information: You’ll need to explain clearly what items are inaccurate. The Federal Trade Commission recommends enclosing a copy of your report with the wrongful items highlighted. Proof: Perhaps the most important part of your dispute is proof. It can make or break your investigation. Make sure you send anything that supports your case. This may include emails from financial institutions acknowledging payments or a personal loan or line of credit report statement. Just make sure you send copies only, so you can keep the originals for your files. Send a Copy of Your Dispute to Your Furnisher A furnisher is a company that supplied your reporting agency with the faulty information. One example is your personal loan or line of credit report financial institution. Or it could be a utility provider or cell phone carrier. Be Patient It may take a reporting agency between 30 and 45 days to complete their investigation. After this, they’ll let you know their verdict within another five days. If they don’t agree with you, they’ll explain why. If it’s because your dispute is frivolous, it means you didn’t send enough proof to show the items are inaccurate. If they agree that the items are inaccurate, they’ll reach out to the financial institution that furnished them with the information in the first place. This may take another month or so before you see changes in your report. All in all, it can take a while before your report goes back to normal. With this in mind, it’s key to send your dispute off as quickly as possible. Follow these tips above and visit These resources will help you handle your error to the best of your ability. Read Also: Are Debt Consolidation Loans Recommended for Credit Card Consolidation Panini Spa: The Importance of Secure Transactions and Identity

Supplemental Insurance

A Little on the Side…Or Not? Your Guide to Supplemental Insurance

Have you ever experienced something you didn't expect? It might have been something good, like bumping into an old friend on vacation or being taken to a surprise party. Or it could have been something not so favorable: a car accident, the loss of a job, a sudden illness… The world is an unpredictable place. Each new day brings its own surprises - both good and bad. We can't plan for those surprises, but we can protect ourselves. In 2017, Americans spent $1.2 trillion on health insurance premiums. Having a good health insurance plan can protect you in the event of an unforeseen injury or illness. But it's not always enough. Some people go to make a claim only to find that it isn't covered. Others can afford to make their monthly premiums, but when they need medical assistance, they can't afford to pay their copays. Even with health insurance, medical bills are the leading cause of bankruptcy in the US. Supplemental insurance may help cover those costs so you don't need to add a financial emergency along to your medical emergency. What Is Supplemental Insurance? As the name might suggest, supplemental insurance is a type of insurance that supplements your existing healthcare coverage. There is a wide variety of health insurance plans, but most plans give you a choice between a low monthly premium and a high deductible or a high monthly payment with a low deductible. Most people choose to go with a low monthly premium-especially if they're generally in good health. But since 61% of Americans don't have enough savings to cover a $1,000 emergency, that high deductible could ruin them. Supplemental insurance is a separate health insurance policy that can be used to cover additional expenses that you may be unable to cover on your own. You might use it to pay for a deductible, copays, or care that your regular insurance does not cover. Some supplemental insurance companies will even cover lost wages for time off due to illness. Supplemental insurance carries its own monthly premium. However, this premium is often lower than the difference between your current insurance plan and a plan that would cover everything else you need. Types of Supplemental Insurance: Just like every health insurance plan is different, there are several different kinds of supplemental insurance. You can mix and match these plans as needed. Dental Insurance: It's likely that you already have supplemental insurance without realizing it. Most health insurance plans do not cover dental work. And since regular visits to the dentist are an important way to fight dental problems, that could leave you on the hook for expensive out of pocket costs. To cover your dental care costs, you must have a supplemental plan. This supplemental is often provided in your benefits package from your employer without you even realizing it. If you manage your own insurance, your primary insurance provider may offer a separate plan to cover these. Vision Insurance: Like dental insurance, vision care is not typically covered by most health insurance policies. And that's bad news considering that 75% of Americans need some kind of vision correction. While you could always see an optician at the cheap eye clinic in the strip mall, that's a poor substitute for regular appointments with an optometrist or ophthalmologist. An optician can also miss other serious problems that an optometrist or ophthalmologist would catch. Supplementing your medical insurance with vision insurance can keep your vision care expenses from running through the roof. Medigap: Medicare is a state-run insurance program that covers citizens over 65 or certain individuals with disabilities. It is funded through taxes, so recipients do not pay a monthly premium. Many people depend on Medicare to cover the cost of their ongoing healthcare. But it doesn't cover everything. Medigap plans can help cover out-of-pocket expenses or necessary care that is not covered by Medicare. Travel Insurance: If you're traveling away from home and you are injured or become ill, you may not be able to find any healthcare providers within your network. Purchasing supplemental travel insurance before you travel is a good way you can stay covered if the worst should happen. Critical Illness Insurance: While insurance exists to cover unforeseen costs that you cannot afford, every insurance plan has an annual limit or a cap on how much they will cover. If you reach that cap, you must pay for any costs beyond that. If you become seriously ill, it can be easy to reach the cap in a hurry. Supplemental critical illness insurance is used to cover expenses beyond your insurance policy's annual limit. Do I Need It? You might be reading this thinking, "this is all well and good, but do I actually need supplemental insurance?" Can you afford to pay your entire deductible? Can you pay for out-of-pocket expenses like copays and prescriptions? Can you afford to pay for additional care out of pocket? Are you at risk of reaching your policy's annual limit? If you answered "yes" to most of those questions, then you might not need supplemental insurance. If you have a savings account that you can dip into to cover extra costs, you can skip it and pay less per month. However, if you do not have a lot saved up, paying a few dollars more per month for supplemental insurance could save you if you suffer a health crisis. Take a look at your financial situation, your current health insurance, and your overall health and make an informed decision. Protect Yourself: Supplemental insurance is a great way to protect yourself from uncovered medical expenses. But as the old saying goes, an ounce of prevention is worth a pound of cure. You can help prevent runaway medical costs by taking care of your health. For more articles about how you can stay healthy, visit the health & fitness section of our blog! Read Also: How To Get Low-Cost Life Insurance For Seniors Small Business Guide To Private Health Insurance Exchanges

LIC Portal

How New User Do Online Registration at LIC Portal

Life Insurance Corporation of India has been one of the most trusted names since its incorporation in the year 1956. This state-owned insurance company is also the largest insurance company in India- have been by the years and still gaining customers patronage with quality products and ease and simplicity of operations. To bring about a simpler access to their policies by the customers, LIC has recently introduced LIC e-Services which would enable LIC customers to get an access to their policies and every other thing related to it get done online such as paying monthly premiums, keeping track of the policy status, keeping track of premium dues and more such stuff online without having to approach any branch office. It is to the utmost benefit of the customer that they can have a transparent view of the policies and plans that they have opted for and get things done with just a click avoiding long queues in the branch office. While availing e-Services might seem like an amazing idea, some people are surely yet to figure out how to get themselves availing these services. If you be among them, worry not. Here we have for you a complete guideline on what exactly LIC e-Services are like and how to get yourself registered on the LIC login portal if you are a new user. All you have to do is to stick to the article until the end. How New User Do Online Registration at LIC Portal: What is LIC e-Services? LIC e-Services is the recently launched online service provided by LIC to its customers. LIC with integration with all the latest digital initiatives comes with its own e-Services to enable wider access to unlimited policy-related information to its customer with utmost simplicity and ease. There is a myriad facility one can derive from availing these e-Services. These benefits include: Online Payment Facility Policy Status Bonus Status Loan Status Claim Status Premium Due Calendar Revival Quotations Premium Paid Certificate Claim History Policy Bond Various devices and online forms available Locators and FAQs Who Are Eligible For Availing LIC e-Services? Of course, anyone who is a policyholder with LIC can avail the benefits of LIC e-Services. For the same one has to register themselves at the online portal. The ones who have already had their registrations done can just simply register the policies held by them in the portal to get all the information and updates on the respective policies. How To Register For LIC e-Services? Now, that you have already had an idea about LIC e-Services and the benefits that you can avail from it, you need to know how to register yourself at the portal for availing the same. The process is rather simple, definitely for the ones who have already had their registrations done and also for the new users who are yet to get themselves and their policies registered. If you are already registered at the portal, all you need to do is click on e-Services. You will find the button somewhere to the right of the official  LIC webpage. Click on Registered User button and log in with your User ID and password. Then you need to fill-up the form provided so as to register your policies at the portal. Take a print out of the form, sign it and upload the scanned copy of the form. Also upload the scanned image your Aadhaar Card, PAN card or Passport. The officials would take some time to verify the same and after the verification process has been completed you will receive an SMS or an email stating that you are prepared to use the e-Services. For the Ones Not Yet Registered at the Online LIC Portal: In case you be among the ones who have not registered already at the Online LIC portal, go through the registration process which is very simple to get through. All you have to do is to click on the New User button on the right of the official LIC web page and select your User ID and password. On the completion of the simple process, you are a registered portal user. You need to register your policies in the portal and therefore all you need to do is to click on e-Services and log in with your User ID and password. For the registration of your policies, you need to fill in the form provided with all the necessary details. Print the form, put down your signature and upload the scanned image of the same. Note that the size should not be below 100 KB. Also, you need to upload the scanned image of the Aadhaar Card or Passport or PAN card or any other equivalent document that works as your official ID proof. Once you are done with the process you need to leave it to the officials to verify it. Once your application is duly verified, you will receive an email or an SMS dating that you are good to go with availing the e-Services at the LIC portal. Read More : Get A Return On Investment With Your SEO. Six Low-Investment Business Ideas You Can Start Today