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KaloBios Pharmaceuticals, Inc. Files for Bankruptcy Following Shkreli's Dismissal

2015 brought us a lot of new celebrity faces. Some were inspiring, some were funny, and others collectively made us sad or even angry. For many Americans, Martin Shkreli, former CEO of KaloBios Pharmaceuticals, Inc., fit into this last category. He is perhaps best known for dramatically raising the per-tablet price of Daraprim, an anti-malarial and antiparasitic, from $13.50 to $750 after his other company, Turing Pharmaceuticals, acquired its patent.

In December 2015, Shkreli was arrested on a securities charge fraud. Following his arrest, he was let go from KaloBios Pharmaceuticals, which then filed for Chapter 11 bankruptcy at the end of that month. Any time an individual or corporate entity has more debt than it can realistically repay, bankruptcy is an option. But it is an option that must be considered and used carefully because it comes with significant obligations for the filing party.

What Happened to KaloBios?

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Working as a Freelancer? Bankruptcy Issues to Consider

Working as a freelancer has a lot of perks. For an increasing number of Americans, perks like making your own hours, working from the comfort of your own home, and not having to comply with company rules and procedures make freelancing an attractive career choice. But the freelance life is not all Skype meetings and romantic notions of working from a busy coffee shop. It can be fraught with issues like economic uncertainty and a lack of the financial safety net of unemployment insurance, which can lead to a dependence on credit cards.

In many cases, a dependence on credit cards is the first step toward filing for bankruptcy. If you need to file for bankruptcy, do not feel ashamed to do so – it can be a life-saving tool. It is much easier to avoid having to file for bankruptcy by avoiding insurmountable debt.

Your Company Type Determines How you May File

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When a Business Declares Bankruptcy, What Happens to its Customers with Unused Credit?

In early 2015, long-suffering retailer RadioShack filed for Chapter 11 bankruptcy. As part of the bankruptcy protection deal, it agreed to sell a significant portion of its stores to Standard General, a major shareholder that plans to continue to operate them as RadioShack-branded stores with Sprint shops within them. The remaining stores will be sold. This is coming after 11 consecutive quarters of posting losses. Along with the auction and purchase of the company by Standard General and closure of thousands of RadioShack stores, many consumers who have unused gift cards found themselves shortchanged.

These customers will be taken care of. Individuals who have unused RadioShack gift cards can redeem them for money at www.oldradioshackgiftcard.com. Customers who have unused credit at the store were given first priority in the company's bankruptcy proceedings, as ordered by the bankruptcy court. If you have an unused RadioShack gift card or other questions or concerns about unused credit with this or another bankrupt retailer, speak with an experienced bankruptcy attorney to have your questions answered.

What Will Happen to RadioShack?

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What Happens When a Bankruptcy Case is Dismissed?

Bankruptcy cases are not always straightforward. In fact, they often require a nuanced look at all the elements present in the case to determine that all parties are able to receive their fair share of the money they are owed.

The court is not required to grant all bankruptcy petitions. When it finds that a bankruptcy case does not comply with the applicable laws or would not be an economically viable choice for the indebted party or his or her creditors, it may dismiss the case. One recent example of a high profile bankruptcy case dismissal is the case of BlackAMG's Chapter 11 bankruptcy claim. In November 2015, Illinois judge Elaine E. Bucklo ruled that the court was within its right to dismiss the company's Chapter 11 reorganization plan, despite BlackAMG's creditor, Northbrook Loans, LLC, arguing that it would be better economically to convert the case to a Chapter 7 bankruptcy. The difference between Chapter 7 and Chapter 11 bankruptcy is broad. With Chapter 7, the indebted party's nonexempt assets are sold off and the profits are used to satisfy his or her debts while Chapter 11 allows the indebted party, generally a corporation or a partnership, to continue to operate under a reorganization plan and repay its debts from its profits over a period of time.

What if My Case is Dismissed?

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Which Debts Can Not Be Discharged by Filing for Bankruptcy?

When an individual is facing insurmountable levels of personal debt, bankruptcy is often the only way to escape from this debt and regain his or her financial independence. Individuals can file for Chapter 7 or Chapter 13 bankruptcy, depending on the level of debt and their disposable income. Through bankruptcy, debts are reduced or even completely eliminated. Although filing for bankruptcy and discharging one's debts can be an attractive option, it is important that an individual considering bankruptcy understand that not every type of debt can be discharged.

Talk to your attorney about which types of debt can be discharged with each type of bankruptcy. Whether you file for Chapter 7 or Chapter 13 can determine which debts you can have discharged and which you are required to pay off.

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