People often wonder what happens when a store files bankruptcy and shuts down its retail outlets. Store closings and corporate bankruptcy filings affect many kinds of people in the local community: employees and customers and landlords.

Stein Mart started by laying off 100s of employees in its corporate headquarters on the Southbank of the St. Johns River in Jacksonville.  It also furloughed over 8,00 employees in its retail stores and in its supply chain. These former employees can file for unemployment benefits as soon as they are laid off.

Whether their  lay offs are permanent or temporary,  people are looking for ways to save money on goods and services that they need. With the advent of the Internet, people have become used to finding information and deals on items they need. The Internet Age has made  people used to getting things fast and cheap, or even free. It has also made people believe in do-it-yourself. Just watch a video and you can do anything yourself.  The recent lockdowns have had people searching for Youtube videos on how to cut their own hair, since most salons and barber shops have been closed.

Some people who are facing overwhelming debt also look for do-it-yourself solutions to deal with their debt. They often file for bankruptcy without an attorney. There are signs in Jacksonville along I-95 exits saying “Bankruptcy $150.” These signs are placed along the interstate by non-lawyers or “petition preparers” who will take $150 from you to type the documents necessary to file a bankruptcy case. The thought is that bankruptcy is just filing out some forms and filing them with a court.  (This author once had a boss, who is a lawyer. This lawyer  declared, “Bankruptcy isn’t rocket science; it is just filling out a bunch of forms about your finances.”  When this person filed for bankruptcy a few years later, she hired a competent lawyer.)

Coming with the filing of a Chapter 11 Bankruptcy is the closing of 94 stores that are underperforming, 35 of which are in Florida and four of those are local to Jacksonville. After the bankruptcy, which should be completed within 90 days, there will be 582 stores remaining.

The object of a Chapter 11 Bankruptcy is very similar to that of a Chapter 13 Bankruptcy but is geared mostly to large corporations. A reorganization plan is submitted to the court for review and confirmation. Through the reorganization plan, debts can be renegotiated for more favorable terms, paid off or even discharged depending on what is in the best interests of the corporation and the priority of the debts. Chapter 13 Bankruptcy, also called a Reorganization Bankruptcy, is designed for debtors with steady income who can make regular payments towards their debts through a repayment plan. Some of the main benefits of a Chapter 13 Bankruptcy are the ability to catch up on missed debt payments, retaining personal property (including non-exempt assets) and nondischargeable priority debt payments.

For Winn-Dixie, this will hopefully mean they will no longer be liable for the leases on the stores that will be closing and an overall debt reduction of around $500 million.

Just like Winn-Dixie is proposing a payment plan to the court, individuals who file a Chapter 13 Bankruptcy do a similar thing. They have the option to break leases, walk-away from secured debts, and lower their over all debt. The biggest difference is how long a Chapter 13 Plan lasts versus a Chapter 11 Plan. A Chapter 13 Plan must last 60 months while a Chapter 11 is usually concluded within 18 months.

Making the decision to file for bankruptcy is not a easy one. If you are facing the prospect of filing for bankruptcy, you should first consult with an attorney who specializes in bankruptcy law to provide you with peace of mind and a clear path forward. The Law Office of David M. Goldman PLLC has guided hundreds of individuals through bankruptcy proceedings and takes an empathetic approach to working with its clients. Contact us today for a complementary consultation. (904) 685-1200

Here are some other items your future landlord is going to look at, some of which might just completely overshadow the fact you ever filed bankruptcy.

Your Rental History

If you have a good rental history, in that you can show that you have always been on time with paying your rent and have not broken any of your leases with previous landlords, then your potential landlord should not be too concerned about the fact you filed bankruptcy.

Your Disposable Income

Have you ever heard that shortly after receiving a bankruptcy discharge you are very likely to receive credit card offers in the mail? This might seem very confusing taking into account that you most likely just filed bankruptcy on multiple credit cards. The reason credit card companies offer you a credit card shortly after bankruptcy is because you come out of bankruptcy with much less debt than you did before bankruptcy. To credit card companies, this means you now have more disposable income, which in turn makes you an excellent candidate for credit. Of course, this is just the presumption that the credit card companies make. However, the same can be true to potential landlords. If they see that you have enough disposable income to pay rent, then your bankruptcy will not be as significant.

Employment History

Potential landlords will most likely look at the length of your current employment, whether or not it is permanent, and your previous employment history.

The Reasons You Filed For Bankruptcy

Most people who file bankruptcy are forced to do so because of things outside of their control. The majority of those who are forced to involuntarily file bankruptcy due so because of a divorce, unexpected job loss, or illness. If you filed bankruptcy because of something outside of your control, tell your story to your potential landlord and explain why the reasons you had to file bankruptcy will not keep you from paying your rent.

Additionally, a potential landlord will look at your credit report to see how you have been handling your finances since filing bankruptcy, the status of your bankruptcy case, and how long ago you filed bankruptcy.

The reality is that filing bankruptcy is going to have an affect on many aspects of your life, but knowing what those possible affects will be before filing bankruptcy can make the bankruptcy process a lot less stressful. There are many bankruptcy myths out there, which is why is it so important to speak with an experienced bankruptcy attorney before filing, so that you can be fully prepared.

Call the Law Office of David M. Goldman, PLLC at (904) 685-1200 to speak with an experienced Jacksonville Bankruptcy Attorney.

You are now probably wondering why a corporation would ever file for bankruptcy? Well, under certain circumstances, it may make a lot of sense for a corporation to become bankrupt.

For instance, it may give the corporations partners’ time to look for new employment or simply focus on more important matters. The main job of a trustee in a business bankruptcy is to basically close the business down and pay whatever he or she can to the corporation’s creditors. The trustee accomplishes this by gathering all of the corporation’s assets, selling them, and then distributing whatever funds he has been able to recover to the corporation’s creditors. If a creditor is not fully paid off, the corporation remains liable for the unpaid balance. This can be very helpful by taking the responsibility away from the corporation’s partners of closing the business down.

Regardless of the corporation’s situation, it is very important to first speak with an experienced bankruptcy attorney before filing bankruptcy. An experienced bankruptcy attorney can review the corporation’s recent business transactions, assets, and whatever else that might be relevant to help you determine whether filing bankruptcy is a desirable means in which to close your business’s doors.

If you do not wish to shut your business down, but are simply looking towards bankruptcy to help you get back on track, you can reorganize your debt with a Chapter 11 Bankruptcy.

If you are considering filing bankruptcy for your business and wish to speak to an experienced bankruptcy attorney, contact the Law Office of David M. Goldman, PLLC today for a consultation.

• The Homestead Exemption: Unless you have owned your current homestead property and/or your previous homestead property for 1215 days prior to filing bankruptcy, then you can only exempt up to $146, 450. If you file jointly, then you can protect up to $292,900;
• Personal Property Exemption: If you claim the Homestead Exemption, then you are able to exempt only up to $1000 of personal property; $2000 of person property if filing jointly. If you do not use the Homestead Exemption, you can exemption up to $4000 in personal property; $8000 if filing jointly; and
• $1,000 in a motor vehicle, or $2,000 if filing jointly.

Due to these very limited exemptions available in Florida, those who have bank accounts with high balances or valuable personal property stand to loose all or if not most of it if they file a Chapter 7 Bankruptcy. However, courts have held over and over again that you are able to convert nonexempt property into exempt property before filing bankruptcy. But you must be very careful before doing so and there are limitations of what can be done. It is also frowned upon to plan for bankruptcy.

The safest thing to do with nonexempt property prior to filing bankruptcy is to turn that non-exempt property into a homestead. But, you cannot simply use your nonexempt assets to make large unnecessary improvements to an already owned homestead property. The best thing to do is to put nonexempt assets into a new homestead property.

The key case is In re Miller, 188 B.R. 302(Bankr. M.D. Fla. 1995), in which the debtors sold a piece of commercial real property and then used a portion of the proceeds to purchase a homestead property. Despite the court clearly finding that the sole purpose behind purchasing the homestead was to keep the proceeds away from their creditors, the debtors were allowed to claim the homestead property exemption. The judge came to this conclusion based on that fact that the homestead exemption in the Florida Constitution only contains three (3) exceptions to the rule. The three listed exceptions do not include the conversion of an nonexempt asset into a homestead property.

This result was reached again in In re Clements, 194 B.R. 923 (Bankr. M.D. Fla. 1996). In this case the debtor, whom had always lived in Alabama and had a homestead property there, sold his homestead Alabama property and then purchased a new homestead property in Florida. He then waited 1 year and filed bankruptcy; claiming the Florida property as his homestead.

If you are considering bankruptcy and believe you have assets that cannot be exempted if you file, you should speak with an experienced bankruptcy attorney immediately before doing anything. Unlike the homestead exemption and the cases mentioned above, transferring nonexempt assets into another type of exempt property might not be sufficient protection. Call and speak with an attorney at the Law Office of David M. Goldman, PLLC today by calling (904) 685-1200.

Section 365(n) of the United States Bankruptcy Code provides specific protections for licenses, but does not provide any protection for trademarks. All other types of intellectual property (patents, copyrights and trade secrets) are generally determined to be an executory contract and are treated as such in bankruptcy.

If it is the licensor who is filing bankruptcy, then they have the right to either assume or reject the license. If they choose to assume the license, then they must meet the very specific requirements for assuming an executory contract in bankruptcy. In order to assume an executory contract while in bankruptcy, the debtor licensor must cure all outstanding defaults and make sufficient assurances for continued performance moving forward. If both of these criteria are met, the licensee generally will not take issue with the assumption as long as the debtor licensor actually performs. If the licensor chooses to reject the license, safe guards have been put in place to prevent the licensee from losing their rights to use the intellectual property. Specifically, the licensee has the ability to choose to keep its rights to the intellectual property, but must make any mandatory royalty payments.

1. You most likely have time to assess your financial situation before making your very important decision to declare bankruptcy. This is of course as long as you are not already facing a time-sensitive situation, such as a repossession or foreclosure.

2. If you are married, your spouse does not have to file with you. And, if you file without your spouse, your spouse’s credit will not be affected.

If you file a Chapter 7 Bankruptcy it is actually unusual for your employer to find out that you have filed for bankruptcy unless a creditor has an active wage garnishment order against you. You will then have to inform your employer of the bankruptcy in order to stop the wage garnishment from continuing, but, in reality, if your employer was already served with a wage garnishment order, then they already know you have been having financial difficulties and may even welcome the bankruptcy.

If you file a Chapter 13 Bankruptcy your employer will still only find out of the filing if, like with a Chapter 7, you have a wage garnishment order against you. Your employer may also find out if your bankruptcy Trustee requires a wage deduction order. A wage deduction order requires your employer to deduct your monthly Chapter 13 Plan Payments from each of your paychecks and to send it directly to your Trustee in an attempt to help you keep your Chapter 13 Plan Payments current.

Whether you can keep a credit card after filing bankruptcy largely depends on whether you are filing a Chapter 13 or Chapter 7 Bankruptcy. If you are filing a Chapter 13 Bankruptcy, you cannot keep a credit card. This is because while you are in a Chapter 13 Plan, you are not allowed to acquire new debt without first obtaining permission from the court.

If you are filing a Chapter 7 Bankruptcy, theoretically, you can keep any credit card you want to as long as the issuing bank allows it. BUT, in most situations, the bank will require you to sign a reaffirmation agreement for your current balance in exchange for allowing you to keep the card open. This means that you must agree to pay back the full amount you owe even though you are filing bankruptcy.