People in South Carolina who file for Chapter 11 bankruptcy and then convert it to Chapter 7 may face having to turn earnings over to the trustee based on a March 2016 ruling in a district court. The district court, which is located in Illinois, heard the case of a man who was unable to reorganize his debts and thus converted from a Chapter 11 to a Chapter 7. One of his creditors and the Chapter 7 trustee said the man had to turn his earnings from his debtor in possession account over to the trustee.
According to court documents, health kiosk company HealthSpot has filed for Chapter 7 bankruptcy, under which the company's assets will be liquidated in order to pay its creditors. The move came after reports that the company would be closing.
Many South Carolinians have experienced financial hardships due partially to mounting student loan debts. Some may file for Chapter 7 bankruptcy as a last resort to resolve their debts with the impression that it will solve their student loan issues along with their other obligations. However, student loans can be considerably more difficult to discharge in bankruptcy filings than other debts.
Married couples in South Carolina often decide to seek a divorce when there seems no way out of mounting financial problems, and some unhappy spouses looking for a fresh start also decide to file for bankruptcy. While both bankruptcy and divorce offer an escape from unmanageable situations, the decision about which to pursue first should be made carefully.
Bankruptcy may be a difficult choice for South Carolina residents, but there are situations that can leave an individual or family with few alternatives. Filing for Chapter 7 may be a path to financial healing as unsecured debts, medical bills, and other financial difficulties are discharged. A fresh financial footing through bankruptcy does come with some long-term credit consequences, making it important to review both the positive side and the negative side of filing bankruptcy prior to making any decisions.
In a case that will impact bankruptcy proceedings in South Carolina and nationwide, the U.S. Supreme Court has ruled that Chapter 13 bankruptcy trustees must return all undistributed funds to debtors who convert their cases to Chapter 7. The unanimous decision, which came down on May 18, resolves a question that has divided bankruptcy courts for three decades.
South Carolina residents facing significant debt may benefit from seeking options outside the conventional advice of paying down debt. While there are many seemingly simple ways to systematically pay off debt, filing for bankruptcy is often the most cost-effective option. Repaying debt without filing bankruptcy can result in unexpected costs that may even eat into retirement savings.
South Carolina business owners may run into a period of financial difficulty that results in filing for Chapter 7 bankruptcy. While all business owners have the right to debt relief through bankruptcy, the business itself may or may not be allowed to continue operating. If the company is a sole proprietorship, it will continue to operate, as the company and its owner are one entity.
Debtors in South Carolina may benefit from learning more about the counseling and education requirements for filing for Chapter 7 bankruptcy. In order to comply with the requirements implemented by federal bankruptcy law, debtors are only permitted to receive counseling service from approved providers within the district. When debtors file at the clerk's office in their district, there is typically a list of approved credit counseling providers available, and the list is also available online.
When South Carolina residents are dealing with large amounts of debt, it can be difficult to decide what to do. In some cases, creditors who are owed money may begin garnishing the wages of people who have fallen behind on payments. This can make a tough situation more complicated. In situations like these, filing for bankruptcy may provide a way out of severe debt.