THE common belief is that a Chapter 7 for a company, or LLC, or any fictitious legal entity works the same way and ends the same way as a Chapter 7 filed by an individual person.
Well, let’s just say that after four years of not knowing the difference between lies, facts and truth, we’ve become numbed to truth and facts. We’ve been told, time and again, that this virus is nothing to worry about, that it would go away by summer with the warm weather, that it’s not serious or lethal. But here we are today with 27 million infections and 460,000 deaths. Seniors over 60 are getting the brunt of this pandemic with 75% of those who died by the virus being seniors over 60. Sure, we’ve got the Pfizer and Moderna vaccines being distributed; but good luck getting a jab even if you’re in a priority group over 65. Try getting an appointment using Myturn.gov. It’s more like your turn to get screwed. Let’s see if you’re eligible. Are you a health care worker or over 65? Great, what’s your occupation? What’s your zip code? Oh, ok, you can get an appointment at Pomona just go check availability. Then it goes to a calendar with today’s date highlighted, and that’s about the end of it. Click on that and nothing happens. You can call a phone number if you need help setting the appointment. Call the number and you’re on hold with a steady stream of info that ends with sorry all our representatives are busy doing whatever. This is the famous Myturn.gov.
The extreme irony I see here is that you’ve masked up and keeping your social distance and keeping to yourself, but somehow that sneaky virus gets to you just before you get your appointment to get your jab. So sorry if you’re over 65, your chance of dying from the virus is a whopping 75%. The vaccine could have protected you 95% from getting infected but too bad, the gov’t has been left in too much of a mess by that stable genius that they just can’t get the vaccine from the source to your arms on time. See you in the next life!
In the meantime, aside from masking up and keeping your social distance, I really suggest that you keep on praying the rosary and Psalm 91 and beg the Blessed Mother Mary, Jesus and God the Father, to keep you and your loved ones safe and healthy, and away from the virus. And as I said before, say 3 Hail Mary(s) and Psalm 91 when you get your jab for divine protection from any serious adverse effects from the vaccine. You’ve got nothing to lose except your life.
Let’s go back to business. When a company or any other fictitious legal entity files for Chapter 7, there are no exempt assets. The trustee determines if there are any viable assets to administer, liquidate, and distribute to creditors of the company. After all, is said and done, the trustee informs the court that he is done and makes a report of what happened. The court then issues an order of “termination” ending the bankruptcy proceedings. The trustee determines that there are no viable assets to administer and creditors get nothing. This is not a discharge order that wipes out the debts of the company. The termination order and the trustee report of no assets taken together mean that the company does not have assets to speak of, so this company is bankrupt. Most creditors will forget about suing the company because the judgment they obtain will be useless since there are no assets to enforce a judgment on. The creditor may get a judgment for $1.0M but there is nothing to attach because the company has no assets.
On the other hand, when an individual person files for Chapter 7, he or she gets a “discharge” order from the court. That order from the court wipes out all dischargeable debts of the debtor. For example, the bank has a $2M judgment against the debtor. The discharge order wipes out that $2M judgment. The debtor is thus given a “fresh start” in life, with no debt. The debtor keeps all his exempt assets. Most of the time, the debtor is able to exempt completely the residence, everything in it, the cars, and the retirement accounts, everything that he or she owns. So debtor starts life again with all his assets but without debt.
In a company Chapter 7, the company gets a “termination” order. In an individual Chapter 7, the debtors get a “discharge” order.
In an individual Chapter 7, the debtor is literally resurrected from near-death by too much debt. The debtor is resurrected free of debt and given a fresh start in life with no previously accumulated debt. It works quite well for the individual debtor as it worked very well for Walt Disney who filed for Chapter 7 twice as an individual before his Disney Empire became a global success, as well as for Milton Hershey who filed for Chapter 7 once before his Hershey chocolate empire became a global success. Both became billionaires after they filed for individual Chapter 7. I’m not saying you too will become a billionaire after Chapter 7, but certainly, you will have a very good chance of making good money and become rich as well without accumulated debt. You will have a fresh start in life and become productive again.
If you need debt relief, please set an appointment to see me. I will analyze your case personally.
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DISCLAIMER: NONE OF THE FOREGOING IS CONSIDERED LEGAL ADVICE. EACH CASE IS DIFFERENT.
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Lawrence Bautista Yang specializes in Bankruptcy, Business, Real Estate and Civil Litigation and has successfully represented more than five thousand clients in California. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 20274 Carrey Road, Walnut, CA 91789 or 1000 S. Fremont Ave., Mailstop 58, Building A-10 South, Suite 10042, Alhambra, CA 91803.