Presenting the new Mr. & Mrs. Merrill!

Seacoast Law is proud to announce that Attorney Shannon Esty married her long time love, Bryan Merrill, on September 22, 2012.

The Benefits of Small Business Bankruptcy 

In this economy, as a corporate business attorney, I am seeing a steady increase in the number of small business clients that are struggling to juggle a significant amount of debt. While there are some individuals that cringe at the thought of filing bankruptcy, under the right circumstances, bankruptcy can help you reorganize your debts to save your business, wipe out your personal liability for those business debts, or simply liquidate the company leaving you debt free. The legislative intent of the federal bankruptcy code is to promote entrepreneurial business ventures while providing legal remedies if those ventures falter. It is not news that large corporations, advised by a bevy of attorneys, have utilized the federal bankruptcy code for years.Look at Donald Trump. Cutting your losses and having a fresh start makes good business sense.

Depending on your business goals, this can be accomplished by filing a personal bankruptcy, business bankruptcy, or both. 

Who Is Liable for Business Debts?

If you are a sole proprietor or a general partner of a partnership, you are personally liable for the obligations of your company. This means that if the business does not pay its debts, creditors may be able to take your personal assets to satisfy those debts. The majority of my small business clients are operating under a type of corporate formation, for both tax and liability benefits.

If you are a limited partner or your business is a corporation or limited liability company, you are usually not personally responsible for those business debts. Your creditors can only go after business assets to satisfy those debts, taking your personal assets, like your home, right out of the mix.  However, you may still  be liable for those business debts if you cosigned or personally guaranteed the debt.

What Are My Bankruptcy Options?

Chapter 7, 11, and 13 bankruptcies each offer certain benefits and also certain drawbacks to the small business owner. Determining which chapter is right for you depends solely on your type and amount of debt and how your business is legally formed under the State of Maine.

Chapter 7 Bankruptcy

Under the federal bankruptcy code, a Chapter 7 bankruptcy filing can be utilized by both individuals and business entities alike.

Chapter 7 Bankruptcy for a Business Entity

If you have a partnership, corporation, or a limited liability company,  you can file a Chapter 7 bankruptcy on behalf of your business. Under these circumstances, a Chapter 7 filing is used primarily to close and liquidate a business' assets. The business does not receive a discharge and cannot use Maine statutory exemptions.

When the case is filed, a bankruptcy trustee is appointed to sell the business' assets and distribute the proceeds to the business' creditors. It is usually an attractive option for small business owners who wish to close their business and do not want to deal with selling assets and negotiating with their creditors. However, a Chapter 7 business bankruptcy does not eliminate any personal obligations on any business debts.

Personal Chapter 7 Bankruptcy

If you are a sole proprietor then your business cannot file Chapter 7 bankruptcy on its own. A sole proprietorship is not a separate legal entity from its owner. All business assets and debts are also the debts of the individual business owner. As a result, you must file a personal bankruptcy to get rid of business debts. The benefit of this is you can wipe out both personal and business debts while using exemptions to protect business assets. This means you may be able to continue operating the business even after bankruptcy.
Also, if you were on the hook for the debts of your partnership, corporation, or limited liability company, a personal Chapter 7 can wipe out your personal liability for business debts. As a result, many small business owners who file a Chapter 7 business bankruptcy also file personally as well.

Chapter 13 Bankruptcy

You Cannot File Chapter 13 for a Business Entity

You can only file a Chapter 13 bankruptcy if you are an individual. A business cannot file Chapter 13 as a separate entity.As we mentioned, a business entity cannot file a Chapter 13. However, if you are a sole proprietor, you and your business are considered the same entity. So if you file a Chapter 13 all business debts are automatically included in the bankruptcy. Chapter 13 is designed to let you keep all property and reorganize your debts through a repayment plan so it is a good choice for sole proprietors with a lot of assets.

Personal Bankruptcy Under Chapter 13

In addition to being used by sole proprietors, Chapter 13 bankruptcy allows other small business owners to discharge their personal liability for business debts. A Chapter 13 is usually used by small business owners with a lot of personal assets or who don’t qualify for a Chapter 7.

Chapter 11 Bankruptcy

Both individuals and businesses can file Chapter 11 bankruptcy but it is significantly more complicated than both Chapters 7 and 13.

Chapter 11 for Business Entities

Chapter 11 is known as the business reorganization bankruptcy. It is used by businesses who wish to continue operating while reorganizing their debts through a repayment plan. Generally, it is a lot more expensive and complex compared to a personal Chapter 13 reorganization and has additional requirements such as filing ongoing operating reports and the appointment of a creditors’ committee. Further, creditors must usually vote on and approve a plan before it can be confirmed.
However, if your business has less than $2,343,300 worth of debt, it can be classified as a “small business debtor.” The small business Chapter 11 usually proceeds more quickly because a creditors’ committee is not required and there are fewer hearings.

Personal Chapter 11 Bankruptcy

A personal Chapter 11 is rarely used because a better alternative exists under Chapter 13 for individuals. However, individuals with more than $1,081,400 of secured or $360,475 of unsecured debt are not eligible to file a Chapter 13 and may be forced to file Chapter 11 bankruptcy.

Breaking the Mold

Mary-Anne Martell, Esq.

In retrospect, I wish I could say that my higher educational pursuits had been the result of a traditional track of graduating high school and going to college. It certainly would have been easier. At eighteen years of age, I was not wise enough or mature enough to recognize education’s lifelong importance. At the time, college seemed to be the last thing on my mind. I wanted to be married and was guilty of a socially inspired “white picketed fence” mentality that governed many of my earlier life decisions. I have learned over the years that there is a reason the cliché “Youth is wasted on the Young” exists.

Shannon's Upcoming Wedding

We are probably one of the most 'human' law firms around. Our founder has a past as a welder, factory worker, caterer and congressional intern! Not many lawyers can claim that much real world experience.

So we have decided to keep you up to date on the goings on here at Seacoast Law. The big event coming up is Shannon Esty's upcoming wedding! Wedding planning is full of drama and suspense, agony and ecstasy. Here is Shannon shopping for her wedding gown at Maine's own Hussey's General Store in Windsor Maine. Not many stores do it all like Hussey's, http://husseysgeneralstore.com!

Of course we are not telling whether she actually bought her dress here or not. Stay tuned...

Celebrating Dads

In my family, mom was always the one you ran to when you cut your finger, or when someone hurt your feelings.  Dad was always the one who checked grades, who we practiced sports with, and went to the beach with in the summer.  Dad was always the one I called when I needed some extra money.  Mom was the one I called when my heart was broken, or when I was feeling down.  These roles are not mom or dad specific, just how they ended up in my family.  Too often does one assume that the nurturing parent is always the mother, and the father is always the strong assertive type that manages the money and makes most of the major decisions.  My parents operated as a unit.  Every decision made by one was not made without checking with the other.

When Traveling, Plan Ahead

We Boomers are much more global than our parents ever were. The lure of adventure and disposable income has sometimes resulted in multiple overseas trips in a lifetime. While we have benefited from being part of this generation, the world can be a not so friendly place. Exciting as traveling may be, please be sure to plan ahead and prepare for the unexpected. To insure you safe and easier travel, take a moment to reflect on the following advice, courtesy of our law firm and the US State Department,

The New Age Women

I had always thought of myself as a new age woman.  After all, I simultaneously juggled education, career and motherhood, believing that donning a Wonder Woman outfit on many days would have certainly been appropriate. I had grown up with a stay-at-home mother whose life appeared to me as a series of constant routine of cleaning, laundry and nightly meals. As a child, I remember that I was determined not to be regulated to such a fate. I would have my own money, make my own decisions and embrace both my freedom and my power. However, after much thought, I have come to a rather startling conclusion that I never really had any monopoly on being a new age woman. While it may be coined as “new age”, in retrospect, there is nothing really “new” about it at all. 

Basic Estate Plan - Highly Recommended!

In 2007, I lost someone I loved very much to cancer. From the date of diagnosis in June of that year until his death in August, it was a mad scramble to put his financial and emotional “house” in order. It was a difficult time for me, struggling with anticipatory grief and challenged by constant caretaking as his health and spirit declined. I was forced to participate in end-of-life decisions that we had not put a lot of thought into due to our middle age and plans for the future. Although it needed to be done, it was not the time to add more challenges to an already stressful situation.

Foreclosure Update:

Here's a current look at our country's foreclosure trends: