Monday, April 30, 2007
Sunday, April 01, 2007
Adding a Creditor to a Bankruptcy
Question: I filed for Chapter 7 bankruptcy and I forgot to list one of my credit cards. My case is still pending, so I can I still add this creditor?
Answer: Yes, it's possible. It's done by filing amended forms with the bankruptcy court. Depending on the particular schedule(s) that need to be amended, there may be additional court fees associated with the filing. If you're working with an attorney, this is not usually included in the attorney/client agreement, which means that your attorney may ask for more fees.
Generally, the failure to list a creditor can result in the denial of a discharge as to that particular debt. The reason for this rule is that it is unfair to creditors when a debtor's assets have been liquidated and the creditor is denied the chance to file a proof of claim and receive partial payment. However, some courts have adopted a "no harm, no foul" rule in "no asset" bankruptcy cases and debtors nonethless receive a discharge as to all debts.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.
Tuesday, March 27, 2007
Forming a Corporation or LLC
Anyone who operates a business, alone or with others, may incorporate or form a Limited Liability Company ("LLC"). Under the right circumstances, the owner of any size business can benefit!
Reduces Personal Liability
Incorporating or forming and LLC helps separate your personal identity from that of your business. Sole proprietors and partners are subject to unlimited personal liability for business debt or law suits against their company. Creditors of the sole proprietorship or partnership can bring suit against the owners of the business and can move to seize the owners’ homes, cars, savings or other personal assets. Once incorporated, the shareholders of a corporation or members of an LLC have only the money they put into the company to lose, and usually no more.
Adds Credibility
A corporate structure communicates permanence, credibility and stature. Even if you are the only stockholder or employee, your incorporated business may be perceived as a much larger and more credible company. Seeing “,inc.” or “corp.” at the end of your business name can send a powerful message to your customers, suppliers, and other business associates about your commitment to the ongoing success of your venture.
Tax Advantages – Deductible Employee Benefits
Incorporating usually provides tax-deductible benefits for you and your employees. Even if you are the only shareholder and employee of your business, benefits such as health insurance, life insurance, travel and entertainment expenses may now be deductible. Best of all, corporations usually provide an increased tax shelter for qualified pensions plans or retirement plans (e.g. 401K’s).
Easier Access to Capital Funding
Capital can be more easily raised with a corporation through the sale of stock. With sole proprietorships and partnerships, investors are much harder to attract because of the personal liability. Investors are more likely to purchase shares in a corporation where there usually is a separation between personal and business assets. Also, some banks prefer to lend money to corporations.
An Enduring Structure
A corporation is the most enduring legal business structure. Corporations may continue on regardless of what happens to its individual directors, officers, managers or shareholders. If a sole proprietor or partner dies, the business may automatically end or it may become involved in various legal entanglements. Corporations can have unlimited life, extending beyond the illness or death of the owners.
Easier Transfer of Ownership
Ownership of a corporation may be transferred, without substantially disrupting operations or the need for complex legal documentation, through the sale of stock.Centralized ManagementWith a corporation’s centralized management, all decisions are made by your board of directors. Your shareholders cannot unilaterally bind your company by their acts simply because of their investment. With partnerships, each individual general partner may make binding agreements on behalf of the business that may result in serious financial difficulty to you or the partnership as a whole.
Corporation vs. LLC
Many clients ask which is better, a corporation or an LLC. This is a complex issue and must be addressed on a case-by-case basis with the your attorney and your tax consultant. In California, some businesses such as contractors or attorneys cannot do business as an LLC.
Reduces Personal Liability
Incorporating or forming and LLC helps separate your personal identity from that of your business. Sole proprietors and partners are subject to unlimited personal liability for business debt or law suits against their company. Creditors of the sole proprietorship or partnership can bring suit against the owners of the business and can move to seize the owners’ homes, cars, savings or other personal assets. Once incorporated, the shareholders of a corporation or members of an LLC have only the money they put into the company to lose, and usually no more.
Adds Credibility
A corporate structure communicates permanence, credibility and stature. Even if you are the only stockholder or employee, your incorporated business may be perceived as a much larger and more credible company. Seeing “,inc.” or “corp.” at the end of your business name can send a powerful message to your customers, suppliers, and other business associates about your commitment to the ongoing success of your venture.
Tax Advantages – Deductible Employee Benefits
Incorporating usually provides tax-deductible benefits for you and your employees. Even if you are the only shareholder and employee of your business, benefits such as health insurance, life insurance, travel and entertainment expenses may now be deductible. Best of all, corporations usually provide an increased tax shelter for qualified pensions plans or retirement plans (e.g. 401K’s).
Easier Access to Capital Funding
Capital can be more easily raised with a corporation through the sale of stock. With sole proprietorships and partnerships, investors are much harder to attract because of the personal liability. Investors are more likely to purchase shares in a corporation where there usually is a separation between personal and business assets. Also, some banks prefer to lend money to corporations.
An Enduring Structure
A corporation is the most enduring legal business structure. Corporations may continue on regardless of what happens to its individual directors, officers, managers or shareholders. If a sole proprietor or partner dies, the business may automatically end or it may become involved in various legal entanglements. Corporations can have unlimited life, extending beyond the illness or death of the owners.
Easier Transfer of Ownership
Ownership of a corporation may be transferred, without substantially disrupting operations or the need for complex legal documentation, through the sale of stock.Centralized ManagementWith a corporation’s centralized management, all decisions are made by your board of directors. Your shareholders cannot unilaterally bind your company by their acts simply because of their investment. With partnerships, each individual general partner may make binding agreements on behalf of the business that may result in serious financial difficulty to you or the partnership as a whole.
Corporation vs. LLC
Many clients ask which is better, a corporation or an LLC. This is a complex issue and must be addressed on a case-by-case basis with the your attorney and your tax consultant. In California, some businesses such as contractors or attorneys cannot do business as an LLC.
The purpose of this article is to provide general information on the law, which is subject to change. If you have a specific legal problem, you should to consult a lawyer.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.
Sunday, March 25, 2007
Renewing a California Judgment Lien
Question: Does an abstract of judgment have a 10 year life just like a judgment and do you need to renew an abstract of judgment every time you renew the judgment?
Answer: Filing an application for renewal extends the judgment created by the abstract. However, you must record a certified copy of the application for renewal at the county recorders office in order to perfect the extension. Recording a new abstract may give you a lower priority to liens recorded after your original abstract.
You should also check to see if the debtor's property has changed hands since the time you recorded the original abstract. There are additional procedures you need to follow to extend the lien with respect to the new owner if a transfer has taken place. Failure to follow the proper procedures to notify the new owner could invalidate your judgment lien.
In most cases, it should not take the full 10 years to collect the judgment. If you need assistance in collecting an old judgment, please feel free to contact our office at (619) 448-2129 for a complimentary consultation.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.
Monday, March 12, 2007
Update on Landlord & Tenant Rights
The Legislature has reinstated the requirement that a landlord give a tenant 60 days’ advance written notice to end a periodic tenancy in some circumstances. Most periodic tenancies are month-to-month or week-to-week.
Beginning January 1, 2007, the landlord must give the tenant 60 days’ advance written notice to end the tenancy if every tenant and resident have lived in the rental unit for a year or more.
However, the landlord can give the tenant 30 days’ advance written notice in either of the following situations:
- Any tenant or resident has lived in the rental unit less than one year; or
- The landlord has contracted to sell the rental unit to another person who intends to occupy it for at least a year after the tenancy ends. In addition, all of the following must be true in order for the selling landlord to give the tenant a 30-day notice –
• The landlord must have opened escrow with a licensed escrow agent or real estate broker, and
• The landlord must have given the tenant the 30-day notice no later than 120 days after opening the escrow, and
• The landlord must not previously have given the tenant a 30-day or 60-day notice, and
• The rental unit must be one that can be sold separately from any other dwelling unit. (For example, a house or a condominium can be sold separately from another dwelling
unit.)
A tenant who wants to end a periodic tenancy must give the landlord the same amount of written notice as there are days between rent payments (for example, 30 days’ notice if the tenant pays rent monthly). This is true even if the landlord has given the tenant a 60-day notice, provided that the amount of the tenant’s notice is at least as long as the number of days between rent payments, and the tenant’s proposed termination date is before the landlord’s termination date.
Subscribe to:
Posts (Atom)