eNewsletter about Kansas City Bankruptcy Law

Rights of Creditors When Dealing with Debtors

Businesses and creditors should always do their due diligence when providing credit to consumers. The best way for businesses and creditors to ensure that a debtor pays them in full, and that both sides are happy with the transaction, is to obtain as much information as possible about the debtor. Important areas to research include the debtor’s assets and liabilities, the payment history of the debtor with other creditors, and the consumer’s business or employment history. Sometimes, however, this is not enough and a debtor is unable to make payment. To be able to do such things as garnish wages and bank accounts, or place liens on property, a creditor must first go to court and receive a judgment against the debtor. Once the judgment is in place, creditors have several options. If you are a creditor dealing with a debtor who has not been making payments,

Stripping a Second Mortgage in Chapter 13 Bankruptcy

Explained by a Kansas City Bankruptcy Attorney In the early 2000s, many homeowners took advantage of low interest rates and increased value in their home by taking out a second mortgage on their residence. The homeowners used the funds in the second mortgage to do household improvements, make long-needed purchases, or to simply pay down some other debt. However, after the housing bubble burst, these same homeowners now find themselves with a first and second mortgage that, combined, have a larger balance than the value of their home. Through a Chapter 13 bankruptcy, homeowners can get significant relief. The Bankruptcy Code allows for a debtor to file a lawsuit within the bankruptcy asking the Court to modify the rights of the second mortgage. The Code states that a second mortgage is only secured against the property if the value of the property is more than the first mortgage. For example, if a debtor has a home worth $100,000, and has two mortgages, the first...

Best Bankruptcy Options for Small Businesses

A Chapter 11 bankruptcy is a reorganization bankruptcy that permits the business to continue to operate while working out a plan to pay its creditors. Under a Chapter 11, a business is under scrutiny from the Court, but the advantage is that the business remains in existence. This can be a good choice for small businesses with strong assets and a future, but which also need additional time to deal with their creditors. A Chapter 7 bankruptcy, during which the Court or secured creditors liquidate everything that a business has, might not be the right answer for your small business. For this reason, many businesses opt for Chapter 11. If your company is facing financial difficulties and is considering filing for bankruptcy,

Legal Options Available When Your Tenant Breaches a Commercial Lease

2010 may be one of the best years ever for businesses seeking a new location. Commercial property owners are desperate to fill their vacant properties and are more likely to offer attractive terms and prices to new tenants. However, many businesses enter into commercial leases without fully understanding their terms. Commercial leases are significantly different from residential ones to which most people are accustomed. There are fewer laws that protect businesses. Additionally, commercial leases are rarely standard. They are subject to a great deal of negotiation. Regardless of whether your business is the landlord or tenant in a commercial lease, a Kansas City bankruptcy attorney at the Sader Law Firm can provide the business law expertise you need to construct or sign the best commercial lease for your needs. Commercial Lease Breach Determination Being in breach of a commercial lease is a legal determination. There are usually specific conditions that trigger a...