Fox Rothchild has published an article regarding the standard for dismissal of an individual’s Chapter 7 case based on the Debtor’s pre-petition bad faith behavior. The article can be viewed at https://www.jdsupra.com/legalnews/is-prepetition-bad-faith-cause-for-45603/
Jim Shenwick, Esq. jshenwick@gmail.com 917 363 3391
Chapter 7 vs. Chapter 13 Bankruptcy: Which Is Best for You? See the informative article at https://wtop.com/news/2022/10/chapter-7-vs-chapter-13-bankruptcy-which-is-best-for-you/
For those people with questions about chapter 7 bankruptcy please contact Jim Shenwick,Esq. jshenwick@gmail.com 917 363 3391
Forbes has an informative article about Biden’s Student Loan Forgiveness Application Is Here — 5 Tips Before You Submit
The article can be found at https://www.forbes.com/sites/adamminsky/2022/10/15/bidens-student-loan-forgiveness-application-is-here---5-tips-before-you-submit/?sh=4f09346b3358
JIm Shenwick, Esq 212 541 6224 jshenwick@gmail.com
PR News Wire has a post on the differences between Chapter 7 and 11 for a small business. The post can be found at https://www.prnewswire.com/news-releases/differences-between-chapter-11-and-chapter-7-bankruptcy-301651391.html
Jim Shenwick, Esq jshenwick@gmail.com 212 541 6224
Bills have been introduced in Congress to amend the bankruptcy laws. An excellent article discussing the proposed law titled "Consumer Bankruptcy Overhaul Envisioned in New Bill: Explained" can be found at
https://news.bloomberglaw.com/bankruptcy-law/consumer-bankruptcy-overhaul-envisioned-in-new-bill-explained-1
James Shenwick, Esq jshenwick@gmail.com 212-541-6224
WUFT is reporting that virtually all PPP loans have been forgiven with limited scrutiny. The article can be found at https://www.wuft.org/nation-world/2022/10/12/virtually-all-ppp-loans-have-been-forgiven-with-limited-scrutiny/#:~:text=Officials%20promised%20a%20robust%20review,close%2C%20hands%2Don%20reviews.
Jim Shenwick, Esq 212-541-6224 jshenwick@gmail.com
Yahoo is reporting an increase in bankruptcy filings. The story titled "Year-over-year U.S. Bankruptcy Filings Increase for Second Consecutive Month in September 2022" can be found at https://www.yahoo.com/now/over-u-bankruptcy-filings-increase-161100672.html
EIDL Loan Default Questions & Answers
As many readers of our blog posts know, at Shenwick &Associates we are representing many individuals and companies that have defaulted on Economic Injury Development Loans (EIDL) from the SBA.
Below are commonly asked questions and answers that we have been asked regarding EIDL loan defaults.
1. Question: If I personally guaranteed an EIDL and my company defaulted on the loan and I guaranteed that loan, can the SBA foreclose and take possession of my house?
Answer: Yes. However in New York state if the borrower owns the house with his wife, as tenants by the entirety and the wife did not guarantee the EIDL loan, then the SBA cannot foreclose and obtain possession of the house. The borrower can continue to live in the house. However, the borrower and his wife will not be able to sell or refinance the house, as a result of the SBA judgment.
2. Question: If I default on an EIDL loan and I have not closed the business or sold all of the assets, can I make an offer in compromise (OIC) with the SBA regarding the loan default?
Answer: Generally no, one of the conditions of an OIC is that the business has closed and all of the assets of that business have been sold.
3. Question: if my business files for Chapter 7 bankruptcy protection, will that bankruptcy filing stop SBA collection actions against the company?
Answer: Yes, a Chapter 7 bankruptcy filing stays SBA collection actions due to the automatic stay under Section 362 of the bankruptcy code. The automatic stay comes into effect when a bankruptcy case is filed and the debtor needs to take no further action after a bankruptcy filing to stop SBA collection actions.
4. Question: If my company files for chapter bankruptcy protection, am I still personally liable if I guaranteed an SBA loan, notwithstanding the company's bankruptcy filing.
Answer: Yes, if the company files for Chapter 7 bankruptcy and the principal guaranteed the loan, then the SBA can pursue the guarantor for money due under the SBA loan.
5.Question: If I guaranteed an EIDL for my company, and my company files for Chapter 7 bankruptcy or closes, and then I file for chapter 7 bankruptcy, will my personal chapter 7 bankruptcy filing stop SBA collection actions against me?
Answer: Yes. If an individual files for Chapter 7 bankruptcy due to an EIDL default or other judgments or debts, the automatic stay in the personal chapter 7 bankruptcy filing stops SBA collection actions against the individual (also known as the debtor).
6. Question: If my company defaults under an SBA loan, can the SBA foreclosure (take possession) of the company' property or assets that were collateral for the SBA loan?
Answer: Yes, EIDL loans for more than $20,000.00 required that the company enter into a UCC-1 and Security Agreement for the benefit of the SBA and those documents allow the SBA to foreclose/take possession of those assets.
7. Question: Where can I learn more about EIDL defaults and bankruptcy filings?
Answer: At Shenwick & Associates we have a blog with many posts on this topic, which can be viewed at https://shenwick.blogspot.com/
Our EIDL posts include the following:
http://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.html
http://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html
https://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.html
https://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.html
Individuals or businesses who would like to speak to Jim Shenwick, Esq. regarding EIDL loan defaults and bankruptcies can contact him at jshenwick@gmail.com or 212 541-6224.
FOR MORE BLOG POSTS ABOUT SBA EIDL LOANS SEE:
EIDL LOAN WORKOUTS AND BANKRUPTCY
https://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.html
EIDL Loan Default Questions & Answers https://shenwick.blogspot.com/2022/10/eidl-loan-default-questions-answers.html EIDL LOAN DEFAULT DOCUMENT REVIEW, WORKOUT, BANKRUPTCY FILING & OFFER IN COMPROMISE https://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.html EIDL Defaulted Loans https://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.html New Relief Program for SBA EIDL Borrowers Who are Having Difficulty Repaying EIDL Loans " Hardship Accommodation Plan" https://shenwick.blogspot.com/2023/05/new-relief-program-for-sba-eidl.html EIDL LOANS and SBA OFFER IN COMPROMISE PROGRAM https://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html PPP & EIDL Fraud https://shenwick.blogspot.com/2022/08/ppp-eidl-fraud.html Better to connect-What small business owners need to know about repaying loans tied to pandemic relief from the SBA EIDL Loans https://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html
Democrats Push to Lift Ban on Student Loan Bankruptcy Relief
Legislation has been proposed in the House and Senate that updates the federal bankruptcy code to ensure student loan debt is treated like almost every other form of consumer debt that can be discharged during bankruptcy. The story can be found at
https://www.commondreams.org/news/2022/10/06/democrats-push-lift-ban-student-loan-bankruptcy-relief
When I began practicing bankruptcy law, student loan debt was dischargeable like credit cards and other debts. Subsequently that law was changed to the detriment of many debtors. Jim
Jim Shenwick, Esq jshenwick@gmail.com 212-541-6224
If You Defaulted on Student Loans, The Fresh Start Program Offers a Second Chance. See the article at Forbes https://www.forbes.com/advisor/student-loans/fresh-start/
Jim Shenwick, Esq. jshenwick@gmail.com 212 541 6224
What type of student loans qualify for up to $20,000 of forgiveness under the Biden Plan? These student loan types qualify for up to $20,000 of forgiveness under Biden's plan
https://www.businessinsider.com/personal-finance/which-loans-qualify-student-loan-forgiveness-2022-9
Jim Shenwick, Esq
jshenwick@gmail.com
212 541 6224
