Bankruptcy Can Mean “Double Whammy” For Struggling Business Owners
September 28, 2009
An article in today’s Wall Street Journal points out the one of the perils of starting a business is that sometimes your personal assets become collateral for loans you take out for the business. When business gets soft, you may end up filing a personal bankruptcy case to save your home from your business creditors.
Sole proprietors are on the hook for all the debts incurred running their business. Any debt you accumulate in the business name may still go after you as the owner of the business. This leaves your personal assets, such as your home, cars, even your furniture at risk.
Most entrepreneurs who start out as sole proprietors will incorporate into limited liability corporations or limited liability partnerships. These structures offer some protection for your personal property, but in the current economic climate many banks have begun asking business owners to sign personal guarantees for business loans. These guarantees are usually very broadly written and will allow the bank to come after your personal property should you not be able to make the payments.
Bankruptcy filings were up 36 percent to 711,550 in the first six months of 2009. In the same period last year, there were only 522,205 bankruptcies filed.
With the economy recovering slowly, I think that it may be a long road ahead for many small business owners. Consulting with an experienced personal bankruptcy attorney could help you understand your options if you are having a hard time keeping everything afloat in the current economic climate.
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Happy 222nd Birthday!
September 17, 2009
Some 222 years ago, leaders met and decided that the 13 colonies could create a more perfect union than the confederation they were operating under. Today we mark the 222nd anniversary of the signing of the Constitution of the United States.
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On September 17, 1787, the 55 men who had gathered in Philadelphia went back to their homes and began the campaign that ultimately culminated in its ratification and the addition of the first 10 amendments known as the “Bill of Rights”.
It took a great deal of arguing and compromise to get the delegates to agree to the document in its original form. Many things have changed in the United States since 1787, and with those changes have come more trials and arguments over the document and the meaning of the words in it. Changes have been made to continue on the path to create a more perfect union, and to correct injustices that were written into the document to secure its passage.
I hope that the citizens of this country can take this opportunity to read the document in its original form and consider the effort that went into creating the freedom and liberty we enjoy today. Interpretation of the meaning of the Constitution is subjective, and it has evolved, along with the values of the American people.
One thing is certain, the rule of law and the justice system that we enjoy today in the United States is due to the fact that we have followed and fought for the ideals enshrined into the Constitution. I am proud to live in a country where the rights of its people are held in high regard.
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Health Care Debate Far From Over
September 11, 2009
President Barack Obama’s speach delivered to a joint session of Congress Wednesday galvanized Democrats and Republicans in their positions on the health care debate. Members of both parties are still claiming the high ground in the discussions, either for idealogical reasons or moral reasons.
Whatever your position on health care reforms proposed by President Obama, recent data shows that here in Texas more children are getting health care benefits under the stat’s Childrens Health Insurance Program (CHIP). That data also shows that more than one quarter of Texans have no health insurance coverage.
Knowing that 62 percent of those who file for bankruptcy in the United States in 2007 had some medical debts included in the filing and that 80 percent of those had health insurance, makes me think that for reforms to have any impact on those who face bankruptcy after an illness they will have to include restrictions on out of pocket expenses for the insured. With the country’s ballooning deficiets, I don’t know that we can afford health care reform now. In the same breath, I am not sure we can afford to do nothing either.
Anyone out there with an opinion? Is health care a right or a privilege?
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New Laws Take Effect Today
September 1, 2009
New laws take effect today across Texas that will effect the way many drive and enact tougher penalties on looters and vandals.
Some of the laws passed by the Legislature that garnered a lot of attention include changes to the child restraint requirements, banning the use of cell phones in all school zones, requiring all passengers in a vehicle to wear a seat belt and increasing the number of hours required for driver education for teenagers.
Graffiti vandals will now face stiffer penalties. Those convicted will have to fully reimburse the property owner for damages and perform community service.
Persons convicted of credit card abuse, fraud or identity theft in a case where the victim is over 65 will face up to 10 years in prison.
Tougher penalties were also approved in the wake of looting after Hurricane Ike for thefts or burglaries committed in an evacuation area or an area that is considered in a state of disaster.
Penalties for dog fighting have also been elevated and it is now illegal to possess or own dog fighting equipment.
Convicted sex offenders face new restrictions on internet use and must provide registrars with information about the email addresses they use.
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