How many people have been caught in a close down of a company ??

Yes, this is true, but their existence never helps a bad situation. They also come into play when you lose big time. They consider any bad debt written off by your creditors as income to you, so they tax you on the debt you never pay off. It just makes a bad situation worse.

 

I had forgot about that part , Would the same hold true in bankruptcy? lot of that going on now days

 

yes, all discharged dept is also treated as income, and taxable as such. the idea is that you enjoyed the use of that credit and never paid for it. This will hit personal bankrupt people the worst since they are usually already strapped. If the discharged debt for a business would have been a deductible expense than it is a net tax wash.

 

Au contraire, mon ami.

http://www.bankruptcylawnetwork.com/debt-canceled-v-discharged-a-taxing-matter/

 

That could be bad for someone truly in bad shape, seems like there are a number of people that abuse it also, rack up a bunch of credit and file at the minimum time frame allowed . Just another thing you have to contend with in business, do a job or sell them goods and don't get paid they file, you don't get paid and have no legal rights to go after them. Heck an old couple we use to sail with the guy was telling me a story about the old wooden cabin cruiser he had, he had taken it to a local boat shop for repairs and the boat shop filed bankrupt the courts kept his boat for a year and a half before returning it and when he finally did get it he was told that he was lucky he got it back

 

SamSam,

that must be a recent change in the bankrupts code, so I stand corrected. My experience with it was in 1988, not doubt many details of it have changed since than.

Tazmann,

Very few actually "take advantage of it", the courts have to agree to the filing and you can not just file because you do not want to pay a debt. Usually the one filing has very large losses to grapple with, it is never a good situation, they are wiped out to almost nothing. I have had several clients own me money when the had to file, it did not harm me in any major way, I felt sorry for the client, lots of time, money and effort lost on a worthy business venture. The issue of a boat being held by the court sounds like carelessness and perhaps indifference. That boat was not an asset of boat shop, it should not have been held. If you ever pay in advance for delivery of an item like a boat or car, and the company files bankruptcy, you are generally out of luck. Best to know who you are doing business with.

 

I would hope they have made it more difficult to file, A lot seems to be knowing how to work the system and a shyster lawyer, I personally know a few that have just to get rid of the debt ., At the moment one little restaurant I was eating lunch at , the people rented it and had been running it for 14 years, landlord wanted to raise the rent the people running it didn't want to pay more even though it was cheap 14 year ago rent that they were paying, went to court twice won the first time and lost the second so rather than moving out filed bankrupt just to tie the place up and not get evicted , Now the landlord has no rights not getting any rent and cant even touch the door to the place. the people moved out and papered the windows so you cant see in and from I am being told stripped a lot out and trashing the place . Goofy situation be interesting to see how it turns out in the end.
I have a dairyman friend that warned me a few years ago that say if you do a bunch of work for a business/ farm or whatever get paid and they file bankrupt shortly after words that the courts can take the money back from you, I still have a hard time believing that but I guess if the judge suspect foul play and thinks your just hiding money for them they could.

 

Taz,

Yes, the courts must assume what you file is legitamat and the information is accurate. It would take a "shyster" lawyer willing to lie on behalf of their client (have we ever seen that before?), not legitamate but it can be done. It would be up to the other party to bring fourth evidence that the filing is under false conditions. tough to do. Everyone gets screwed in a bankruptsy, all assets are on hold until the courts sort it out, and a shyster lawer can delay that several years.

It is extremely rare that they would demand money back for legitamate work done. What I remember about this is if you favor a few of your creditor over the others, say pay off your relatives money you borrowed just before you file, and it was a lot of money, they could demand the money back since it was clearly not normal buisness. When I was forced to file in 1988 by impatient creditors, I paid off the smaller creditors, self employed people or small business that I knew not paying would hurt them, and left the larger ones (that were suing me) to deal with the bad debt they created on their own. No issue was made of it since there were no significant assets. If they were more patient I could have paid off all of the past due invoices (I was paying everyone a little each month), for some reason these larger creditors thought I was sitting on a pile of money and just refusing to pay them. So three of them filed law suites against me, which would have froze my assets anyway, so it was than I realized I could not stay in business. It is just as well, I would have likely still be struggling with marginally viable business, instead it forced me to close it down and find some other way to make a real living. It made a dumb 28 year old realize I could not making a living with a hopelessly obsolete business.

Like anything else on the law books however, the rules are subject to change.

 

The only steady employer is the government welfare machine ....

:idea:

 

Or be an Undertaker.

 

"The only steady employer is the government welfare machine ...."

.....sooooo true nd it is on taxpayers money that they run, then fine you as much as possible as well.....but it is all going to end, as it is totally unsustainable.

Get rid of politicians, priests, accountants and lawyers and we will all be better off.

 

Not all government has steady employment. Our local county lost 2/3 of its staff when we had the economic slow down in 2008. Of course they all went to work for either state or the federal government.

Some one once said: "the closest thing we have come to eternal life on this earth is a federal program"

 

I disagree.

Priests & pastors have always been great contributors to society. It has only been the recent invasion of homosexuals into churches which cost society.

wayne

 

I disagree too.....

Priests were great holders of information from the public, inflicting them instead with their "beliefs", and holding bck science or relevance, but please mate, I do not wish to bring this into a he said, he said match, when it comes to religion, if it is for the benefit of a social society, good luck to it......

 

Wishin they would have cut back here but nope they just start raising fee's fines taxes anything thing they can to squeeze a little more out of us .