For many Valley businesses, being served with even one major lawsuit can cripple business operations.  Even a successful defense can be expensive, and losing could end the business.

One business recently in the news, Luna Innovations, filed for bankruptcy protection under Chapter 11 precisely because it appeared it might lose a lawsuit (losing is described as a “potential negative outcome”).  Within six months, the company was able to settle the claim and secure approval of a reorganization plan.

Filing a Chapter 11 bankruptcy triggers the “automatic stay,” halting pending litigation.  While the creditor still has an opportunity to prove its claim, the Bankruptcy Court has control over the timing and controls where the claim will be decided.  In addition, a successful Chapter 11 case prevents a single creditor from securing immediate payment of a crippling judgment at the expense of operating expenses, other creditors, and the survival of the business.

Attorney Kelly G. Black offers a free Chapter 11 bankruptcy consultation in which to discuss the specific situation of your business.  He can be reached at (480) 559-8131.

Russ Wiles of the Arizona Republic reports today that bankruptcies for those in the Phoenix Metro area are up 82% when compared to total bankruptcy filings in 2008.  Chapter 7 filings accounted for about 81% of all filings, while Chapter 13  cases accounted for the remainder.   I was able to provide information for the Republic article and you can read it here:  http://www.azcentral.com/business/articles/2010/01/11/20100111biz-Bankruptcy0112.html .

This mirrors what I am seeing in my practice –specifically that more families are opting for Chapter 7 bankruptcy.  A chapter 7 bankruptcy will help you to wipe out most if not all unsecured credit-card type debts, including medical bills and judgments.  Another big reason people are filing Chapter 7 cases is to rid themselves of second mortgages that survive either a short sale or foreclosure.  These types of debts are discharged 100% — no payback required.

Chapter 13 on the other hand is available for those who don’t qualify for a Chapter 7 bankruptcy case because they make too much money or have significant property that would be at risk of seizure in a Chapter 7 bankruptcy case.  Many are filing Chapter 13 bankruptcy cases for the sole reason of getting rid of their second mortgage.  In short, if the value of your home has depreciated to the point that it is now worth less than what you owe on your first mortgage, we can get rid of your second mortgage and allow you to stay in your home through the Chapter 13 bankruptcy process.

If you would like more information on the Chapter 7 or Chapter 13 bankruptcy process, I offer a free consultation where we can discuss your individual situation and prepare a plan to help you out of your financial difficulties.  Arizona bankruptcy attorney John Skiba can be reached at (480) 464-1111.

The Phoenix Business Journal reports on the Chapter 11 filing by a local company, Mesa Air Group.  Mesa Air’s CEO states a common reason for filing a Chapter 11 bankruptcy petition: burdensome lease obligations.

Long term leases can cripple a business of any size.  Many East Valley businesses are stuck in multi-year leases at rental rates set during the boom.  Often, revenues in 2010 simply do not cover lease payments set 2006 or 2007, when revenues were high.  In other cases, the business no longer needs to lease as much space or as much equipment, as with Mesa Air’s excess aircraft leases.

In the right circumstances, a Chapter 11 case can allow a business to reject burdensome leases as part of a new business plan.

Attorney Kelly G. Black offers a free Chapter 11 bankruptcy consultation in which to discuss the specific situation of your business.  He can be reached at (480) 559-8131.

In a story by the Associated Press yesterday, it was announced that in 2009 there were approximately 1.4 million bankruptcies filed across the nation.  Arizona saw the fastest increase with a jump of 77 percent in filings when compared to 2008.

Over the last two years I have seen not only a significant jump in the number of people filing, but a significant change in the type of financial situation that is leading a person into bankruptcy.  Two years ago almost all filings were associated with a foreclosure or fear of losing a home.  Now, most have experienced a reduction in pay or have lost their job completely and simply cannot make ends meet.  The situation is often made worse in that people have done everything to avoid bankruptcy — including maxing out their credit cards.

If you are in a similar situation where you have maxed out credit cards in trying to keep your home or just cover basic living expenses and are no longer able to keep up on the payments; or if you have lost a job or seen a significant pay decrease, filing a Chapter 7 bankruptcy case can bring you the relief you are seeking.  Chapter 7 bankruptcy will discharge or eliminate most if not all credit card-type debts while permitting you to keep most if not all of your assets, including your home.

As part of my video series on bankruptcy I have prepared a short video on the basics of Chapter 7 bankruptcy.  You can access it here http://www.youtube.com/watch?v=ZHubPnIu5rs .

I offer a free consultation where we can discuss your current financial situation and discuss how a bankruptcy filing can help you and your family during this stressful time.  You can reach me at (480) 464-1111.