Please note that, in light of Governor Murphy's recent "stay at home" order in New Jersey due to the COVID-19 pandemic, McLaughlin & Nardi, LLC's attorneys and staff are working remotely at this time. However, we are still ready, willing, and able to address all of your individual and business legal needs. Please contact us by phone at (973) 890-0004 or email at info@esqnj.com. We are committed to providing the same high level of legal services that our clients have come to expect over the years. Thank you.

Articles Posted in Creditors Rights & Debt Collection

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As a result of the Coronavirus (COV-19), millions of small businesses have been forced to close their business operations entirely with seemingly no end in sight. small-business-300x200 Naturally, this has led to a spike in bankruptcy filings.  However, many small businesses have held out hope for federal stimulus aid before deciding on whether bankruptcy is the right option for them.

The enactment of a new bankruptcy law, the Small Business Reorganization Act, may provide small businesses suffering from COV-19 related financial issues with relief.  The purpose of the act was to make the benefits that larger business entities may take advantage of when filing for a Chapter 11 reorganization bankruptcy easier to access for smaller business entities seeking relief from debt without going out of business.  The Act simplifies the process by allowing small businesses to file a Subchapter 5 bankruptcy reorganization.

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national-gallery-of-art-1380105-m-300x248Since the COV-19 outbreak began, more than 22 million Americans have filed for unemployment.  The increase in unemployment filings have been the result of businesses of all sizes being forced to shut down entirely or significantly limit their operations.  As a result, many people, both employers and employees, are seeing less income or no income at all while still being expected to pay their monthly payments such as rent, mortgage, car loan, credit card bills, and insurance.  These financial obligations are especially devastating for people and businesses that were already having trouble making those monthly payments prior to the COV-19 outbreak.

If a person and/or business is experiencing financial trouble, has significant debt, and/or is subject to collection actions such as a foreclosure or a collections lawsuit, bankruptcy may be a potential remedy.  One of the major benefits of filing for bankruptcy is the immediate automatic stay of collection actions and lawsuits.

The type of bankruptcy that may be appropriate for an individual and/or business depends on several factors.  For more information on the different types of bankruptcies, check out our posts on Chapter 7, Chapter 11, and Chapter 13 bankruptcies.

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The need to file bankruptcy can come quickly and abruptly due to a serious life event such as a serious medical diagnosis that results in large medical bills or being terminated or laid off from a job that results in a loss of income.  Many individuals have experienced this as a result of the Coronavirus (COV-19), which has caused these individuals to feel as though they are “drowning in debt.”

If an individual or family is in a position where they are significant debt and cannot pay their bills, filing a Chapter 7 bankruptcy may be an appropriate step to get them a “fresh start” financially.

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The Order

On Saturday, March 21, 2020, Governor Murphy signed Executive Order Number 107, which further tightened restrictions on people and businesses in response to the Coronavirus/COVID-19 pandemic.  This Executive Order superseded all previous Executive Orders on Coronavirus responses.

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