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Life After Chapter 11: Family Christian Stores Look to Recovery with New Plan

Filing for bankruptcy does not mean accepting personal or business failure. For many individuals and companies, bankruptcy means an opportunity to re-strategize and regain control of the company's finances. One recent example of a company emerging after bankruptcy with a new business plan is Family Christian Stores, a Grand Rapids, Michigan-based niche retailer. After completing the Chapter 11 bankruptcy process, the company's CEO plans to redefine the company's brand and better implement e-commerce into its business model.

Chapter 11 bankruptcy is a popular bankruptcy option for business owners who can not pay their business debts but want to reorganize their companies to become profitable. If you are a business owner considering filing for bankruptcy, work with an experienced bankruptcy attorney to determine all of your options and whether Chapter 11 bankruptcy is the right choice for you.

The Chapter 11 Bankruptcy Process

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New Haven Couple Involved in Bankruptcy Fraud Case

Jason Sheehan of New Haven, Connecticut, was the sole member of a limited liability company called Infinistaff, LLC that provided temporary workers to employers. In September of 2010, Infinistaff voluntary filed for Chapter 11 bankruptcy with the Connecticut Bankruptcy Court.

Sheehan: False Claims and Representations to the IRS

Sheehan falsely claimed that another company was being paid to process Infinistaff's payroll checks and prepare and file its payroll tax returns and tax payments. Infinistaff also falsely presented to the Internal Revenue Service that the other company was making deposits under its tax identification number. Although Infinistaff did have such an arrangement with this other company for a period of time, the arrangement was terminated at the time Sheehan made these false presentations and claims. In other words, after the arrangement was terminated, Sheehan continued to file operating reports with the Bankruptcy Court as if the arrangement was still in place and claimed that the other company was being paid monthly administrative fees. Sheehan filed these reports to hide the embezzlement of over $1 million from Infinistaff's bankruptcy estate.

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Posted on in Bankruptcy
Criminal Offenses with Bankruptcy

When an individual, organization, or business entity faces more debt than can be managed, they sometimes opt to file for federal bankruptcy. Filing for bankruptcy protectors debtors from creditors who are pursuing the unpaid debts. If the bankruptcy petition is granted in federal court, the judge will look at:

  • The property owned
  • How much money is owed
  • Who the money will be repaid to

The repayment process will then begin and allow the debtor to have a fresh start. However, when someone has filed for bankruptcy and violate federal bankruptcy law, they have committed criminal bankruptcy fraud and will thus be charged with the crime.

Intent

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Reestablishing Your Credit After Bankruptcy

Those who need to rid themselves of their debt or are unable to pay off their debt may consider filing for federal bankruptcy. Individuals, municipalities, businesses, international parties, and even family farmers are able to file bankruptcy in federal court. When the court grants bankruptcy petitions, the debtor is resolved of debt in its entirety or is provided with a plan to pay off the debt over time. Although this may be beneficial to debtors, there is the remaining fear of how one's credit will be evaluated following bankruptcy. Reestablishing one's credit after filing for bankruptcy is important for financial recovery and security.

What Will Bankruptcy Do to Your Credit?

Initially, it will be difficult to rebuild your credit. Having bankruptcy on your financial record will often lead lenders to require you to pay more to borrow money. Such debtors may face:

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Tagged in: Bankruptcy Credit Debt

Although each bankruptcy case is unique, every filer must eventually decide which bankruptcy chapter is best for their particular situation. Chapter 7 and chapter 13 are the most popular forms, each offering different bankruptcy options. The American Bar provides a detailed comparison.

Chapter 7 bankruptcy is straight bankruptcy liquidation while chapter 13 bankruptcy involves a repayment plan. This article will explain the key differences between these chapters:

1. Basic Process

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