Bankruptcy Subchapter V Debtor Eligibility

Bankruptcy Code requires that a Subchapter V debtor be “currently engaged in commercial or business activities at the time of filing in order to be eligible as small business debtor.” In this case, the debtor filed for bankruptcy without intentions to resume business operations in the same manner as before. Therefore, the U.S. Trustee claims that means the debtor was no longer “currently engaged” in their business activities. However, the Court ultimately decided that the term “engaged” is vague. In Bankruptcy law, in the case that a word is not specifically defined in the Code, it “must be construed liberally in favor of the debtor and strictly against the creditor.” The Court ultimately found the debtor to be eligible to proceed under Subchapter V of Chapter 11.

Bankruptcy Case Number: 20-27480

If you’re considering bankruptcy, give us a call at (816) 524-4949 or visit our website at Hoorfarlaw.com.

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Pandemic Start-Up Boom Doesn’t Show Signs of Stopping

The pandemic seems to have boosted entrepreneurial activity so much that Americans filed paperwork to start 4.3 million businesses last year. This number is up 24 percent from the year before and by far the most since the government started keeping track a decade and a half ago. In fact, prior to the pandemic, the nation had been facing a steady decline in entrepreneurship. The reopening of the nation’s economy doesn’t seem to be slowing this growth either; in fact, applications are expected to be even higher this year. The biggest gains have been seen in those industries that were hit hard by the pandemic, like food service and retail, but other industries, like construction and finance, are also seeing increases.

If you are a business owner that would like some tax guidance, contact our law office at 816-524-4949 or visit our website at Hoorfarlaw.com.

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Education Department to Forgive $1.1 Billion for ITT Students

The Education Department has said that it will forgive the federal loans of students who attended ITT Technical Institute but left after March 2008 without completing a degree. This forgiveness will apply to 115,000 borrowers amounting to more than $1 billion in debt.  ITT, a for-profit chain accused of fraudulently luring in students with inflated claims about the earnings and career prospects of its graduates, went bankrupt in 2016. This means the cost of eliminating this debt will largely fall on taxpayers.

Loan forgiveness for ITT students has already been offered in the past, but this announcement means that many more borrowers will now be eligible. March 2008 was chosen as the cut off for eligibility because that is the period that the Education Department determined ITT’s executives schemed to disguise the company’s true financial condition, which drove up costs for students while reducing the quality of the education that they received.

Struggling financially? Considering bankruptcy? We can help. Give us a call at (816) 524-4949 or visit our website to book a free consultation.

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More than 323K Borrowers with Disabilities to Receive Automatic Student Loan Forgiveness

The Biden administration announced that it would set up more than 323 thousand borrowers with a total and permanent disability (TPD) for $5.8 billion in automatic federal student loan forgiveness. The Education Department announced that it would no longer make those classified as totally and permanently disabled apply for their federal student loans to be discharged. Instead, borrowers with TPDs will be able to receive automatic forgiveness thanks to a new rule allowing student loan servicers to match customer data with the SSA. Federal law allows student borrowers with TPDs to seek forgiveness of their federal student loans on the grounds that they would not be able to make enough to pay them off. The Education Department previously arranged a similar automatic loan forgiveness program with the Department of Veterans Affairs, but the new rule will allow nonveterans with TPDs to skip the application process.​​

Struggling financially? Please contact our office at 816-524-4949, or you can visit our website at hoorfarlaw.com to schedule an appointment.

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July Home Sales Up 1% as Prices Reach Unprecedented Levels

New homes sales rose a mere 1% in July after a string of declines. New home prices are soaring to record levels. Sales fell April, May, and June as builders faced surging lumber prices and a shortage of workers. The median price of a new home sold in July was $390,500, up over 18% from one year earlier. The average sales price also hit a new record, up more than 17% from a year ago. Even with the modest increase in sales in July, new home sales are 27.2% below the pace of a year ago.

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Two Men Charged in Scheme to Obtain Fraudulent Loans

Federal authorities announced that two men have been charged in connection with their alleged roles in a scheme that used stolen identities to obtain more than $450,000 in disaster loans from the Small Business Administration. Roughly $250,000 of that was used to purchase iPhones for resale. These men were arrested and charged with conspiracy to commit wire fraud. Hector Garcia has also been charged with aggravated identity theft. Prosecutors claim that Garcia opened a fraudulent banking accounting using the stolen identity of a U.S. citizen. This bank account was linked to other fraudulent accounts that were set up to receive the SBA loans. Edwin Acevedo, the other man being charged, then distributed debit cards linked to those accounts to other accomplices. These cards were then used to launder to the loans through the purchase of the iPhones, which were resold. Authorities says that Garcia also wired a portion of the funds to the Dominican Republic.

Struggling financially? Give us a call at (816) 524-4949 or visit our website to book a consultation.

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LeClairRyan Founder Likely to Be Named in Lawsuit Over Firm’s Bankruptcy

Gary LeClair, founder of LeClairRyan, is expected to be revealed as an additional defendant in the $128 million lawsuit targeting UnitedLex over its role in the firm’s bankruptcy. U.S. Bankruptcy Judge Kevin R. Huennekens ruled to allow chapter 7 trustee to make an amendment to her complaint. Chapter 7 trustee, Lynn Tavenner, is seeking to hold an unnamed attorney partially responsible for the failure of the firm’s joint venture with UnitedLex. Tavenner claims that the individual played an integral part in the New Law provider’s “scheme to loot [LeClairRyan] of its valuable assets.” Although this individual remains unnamed, their counsel filed a notice of appearance earlier this month indicating LeClair was their client. Tavenner alleges that UnitedLex’s actions, including putting nonlawyers in control of the firm’s affairs and prioritizing payment to UnitedLex over the firm’s other financial obligations, cost the law firm at least $41.7 million. She is seeking treble damages.

Considering bankruptcy? Contact our office at 816-524-4949, or you can visit our website at hoorfarlaw.com to schedule an appointment.

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Supreme Court Ends CDC Eviction Moratorium

A coalition of landlords and real estate trade groups in Alabama and Georgia challenged the latest extension of the CDC’s moratorium, which was supposed to last through October 3, and won. The Supreme Court ultimately declared that while it is in our nation’s best interest to help slow the spread of COVID-19, Congress should be the entity to decide whether further action should be taken in this instance. On one side, there are claims that the moratorium was unfair to “mom-and-pop housing providers.” The other side argues that it is dangerous to the public to end this moratorium because of high transmission rates of the Delta variant.

If you’re struggling financially as a result of the COVID-19 pandemic, we can help. Call us at (816) 524-4949 or visit our website.

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President Biden Urges Some States to Extend Unemployment Benefits

President Biden is encouraging states with higher unemployment rates to use federal aid to extend benefits for unemployed workers after they are set to expire soon. Enhanced benefits like the $300 weekly supplement will only be available through the first week of September, and President Biden still plans on this being the case. However, he is focused on getting states that need them to use relief funds to prolong other expanded benefits like additional weeks for long-term unemployment.

Struggling financially? Please contact our office at 816-524-4949, or you can visit our website at hoorfarlaw.com to schedule an appointment.

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Mistrial Declared in California Embezzlement Case

Attorney Michael Avenatti, who represented Stormy Daniels in her lawsuit against then-President Donald Trump, is charged with embezzlement for stealing nearly $10 million of settlement money from his clients. He is accused of negotiating and collecting settlements on their behalf, keeping the money for himself and not telling his clients what happened to the money. Avenatti was granted a mistrial on technical grounds that federal prosecutors failed to turn over relevant financial evidence to him. This follows another separate trial in July in which Avenatti was sentenced to two and a half years in prison for a $25 million extortion case in New York.

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