A huge shareholder lawsuit in Northern Illinois may have pushed the onetime “King of Downtown Orlando” over the financial precipice.
Ten years ago, Cameron Kuhn employed seventy people, owned twenty choice properties in downtown Orlando, and was expanding into new markets in northern Florida, Georgia, and Louisiana. But then the real estate market crashed and the Great Recession came directly thereafter. A year later, in 2008, Mr. Kuhn told a local newspaper that he had almost no cash. In addition to the aforementioned lawsuit, Mr. Kuhn’s Chapter 7 bankruptcy paperwork listed $22.8 million in debts, including back taxes and past-due Domestic Support Obligations.
First Loft Corporation, one of Mr. Kuhn’s companies, declared bankruptcy the same day.
Why People File Bankruptcy
This is not a schadenfreude piece, because no one’s money problems should ever be taken lightly. Rather, this bankruptcy is an object lesson as to how quickly things can change, and these changes are often almost entirely beyond the debtor’s control. Most consumers do not see their investments sour because of a nearly-unprecedented economic downturn, but similarly, many Chapter 7 and Chapter 13 bankruptcies are caused by:
- – Divorce: Because of the loss of income and dramatic increase in expenses, marriage dissolution often transforms one household that was just barely getting by into two households that have even more trouble staying afloat.
- – Job Loss: Moneylenders usually start demanding payment on delinquent accounts after a month or two, so even a brief unemployment period can cause a major financial crisis.
- – Income Loss: Instead of laying off employees,some employers freeze wages, trim hours, eliminate overtime, and take other cost-cutting measures that inevitably affect the employees’ pocketbooks.
- – Medical Bills: The majority of Americans either have medical bills they cannot pay or can manage only with great difficulty, and like the other factors mentioned above, people have almost no control over sudden illnesses and other situations.
All these factors have at least one thing in common: most families have almost no savings and therefore almost no way to make it though trying financial periods, especially when more than one crisis strikes at once.
Which Bankruptcy is Best?
The amount and type of debt largely dictates what kind of bankruptcy is best.
Chapter 7 eliminates unsecured debts, like medical bills and credit cards, after just a few months. In some cases, Chapter 7 aso takes care of other kinds of debts, like student loans and past-due income taxes. Debtors get to keep almost all their assets, including houses, cars, retirement accounts, and even cash.
For those who can pay their debts but just need a little more time to catch up, Chapter 13 offers a protected three or five year repayment plan. During that time period, moneylenders cannot take any adverse action without that bankruptcy judge’s permission. If they complete the plan, debtors emerge from Chapter 13 completely caught up on their home mortgage and other secured debts; their unsecured debts are generally discharged.
Contact Aggressive Attorneys
The cause of debt problems may be out of your control, but the solution is within your grasp. For a free consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. Convenient payment plans are available.