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Filing for Bankruptcy: When It Makes Sense and When It Does Not

A Big Bankruptcy Benefit: Assuming or Rejecting an Unexpired Lease Under Section 365 of the Bankruptcy Code

Filing for Bankruptcy: When It Makes Sense and When It Does Not Life is unpredictable. Sometimes, a divorce, job loss, or health scare may lead to a sudden financial catastrophe. Other times, the slow and insidious accumulation of personal, business, or credit card debt might lead to financial distress. In such situations and others – gambling loss, mortgage delinquencies, judgments, medical bills, etc. – filing for bankruptcy may be the best option available. It allows you to eliminate or greatly reduce your debts while giving you a fresh financial start. Other benefits include stopping credit collection and wage garnishment. It may...

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Is it Fraud? How to Determine Bankruptcy Fraud

Is it Fraud? How to Determine Bankruptcy Fraud-Moretsky Law

Is it Fraud? How to Determine Bankruptcy Fraud A discharge order is the holy grail of bankruptcy. It marks the elimination of certain outstanding debts, giving debtors a fresh economic start while prohibiting creditors from legally undertaking or continuing any debt collection activity against them. There are, however, specific categories of debt known as “exceptions” that do not qualify for a discharge. Section 523 of the Bankruptcy Code describes certain debts as non-dischargeable, meaning the debts remain due and owing after discharge. Some common exceptions include most tax obligations, student loans, domestic support obligations, and debts arising from fraud or misrepresentation. While most...

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The Pennsylvania Seller’s Property Disclosure: The Importance of Getting it Right and the Consequences of Getting it Wrong

The Pennsylvania Seller's Property Disclosure: The Importance of Getting it Right and the Consequences of Getting it Wrong Every Pennsylvania home seller must complete a Seller’s Property Disclosure form before putting their house up for sale. The form requirement is in response to a Pennsylvania law requiring residential property sellers to disclose any ‘known material faults’ with the property that are not apparent to prospective buyers. Material defects may include structural issues such as a leaky roof, plumbing, and septic system. The Pennsylvania Seller Disclosure Law applies only to residential property. It requires a home seller to notify a buyer of the...

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A Big Bankruptcy Benefit: Assuming or Rejecting an Unexpired Lease Under Section 365 of the Bankruptcy Code

A Big Bankruptcy Benefit: Assuming or Rejecting an Unexpired Lease Under Section 365 of the Bankruptcy Code

A Big Bankruptcy Benefit: Assuming or Rejecting an Unexpired Lease Under Section 365 of the Bankruptcy Code Imagine a situation where a commercial tenant files a Chapter 11 bankruptcy. Section 365 of the Bankruptcy Code allows the debtor-tenant to assume or reject an unexpired lease or assign it to a third party. At first blush, it might seem entirely beneficial to the tenant and disastrous for a landlord. However, the Bankruptcy Code offers some protection to landlords. Let’s walk through a common example to demonstrate the options available to a debtor-tenant and landlord in the event the tenant files for chapter 11 bankruptcy...

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IRS Administrative Appeal vs. Going to Tax Court: Which is Right for Me?

Letter of Intent: What Is It and Do You Need One?

IRS Administrative Appeal vs. Going to Tax Court: Which is Right for Me? The Internal Revenue Service (IRS) regularly audits individual and business tax returns to verify income, deductions, credits, carryforwards, etc. and ensure compliance with federal tax laws. The different types of audits conducted by the IRS constitute the main source of tax disputes. Typically, tax disputes occur where the IRS and taxpayer disagree on a specific tax position or decision. If you have a tax dispute with the IRS, the Office of Appeals allows you to resolve the issue without going to court. However, depending on the nature and circumstances of...

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Letter of Intent: What Is It and Do You Need One?

Letter of Intent: What Is It and Do You Need One?

Letter of Intent: What Is It and Do You Need One? There is much at stake in most business deals. It often makes sense to use a letter of intent to clarify the parties’ intentions. What is a Letter of Intent (LOI)? A Letter of intent (LOI) is a letter between two (sometimes, even three or more) parties or companies outlining the basic terms of a prospective business transaction. Essentially, one company uses the document as a declaration of commitment to do business with another. While businesses can draft similar agreements in many formats, an LOI’s distinct feature is its letter format. Businesses can...

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Confession of Judgment: Why You Should Be Careful

Confession of Judgment: Why You Should Be Careful Imagine losing a case even before the other party files a complaint. At first blush, the possibility seems stunning, even unconstitutional. But, this is precisely the point of a confession of judgment. These types of clauses are commonly found in commercial leasing and commercial lending agreements in Pennsylvania. In fact, Pennsylvania is among the few states that still allow the enforcement of such a provision. What is a Confession of Judgement and Who Uses It? It is important to note that confession of judgment clauses are permitted only in commercial leases and loans, with the...

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New Changes to Non-Compete Agreements on the Horizon

New Changes to Non-Compete Agreements on the Horizon

New Changes to Non-Compete Agreements on the Horizon From federal to state laws, there has been a non-compete reform agenda across the country. While non-compete regulation is historically a preserve of state government, there are some federal proposals, including a recent executive order. On July 9, 2021, President Joe Biden signed an Executive Order intended to promote competition and innovation in the American economy. The wide-ranging executive order also directed the Federal Trade Commission (FTC) to regulate non-compete agreements. According to the executive order, FTC should “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit...

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C Corporations and S Corporations Are Not the Same: Know Before You Choose

C Corporations and S Corporations Are Not the Same: Know Before You Choose

C Corporations and S Corporations Are Not the Same: Know Before You Choose If you are considering incorporating a business in Pennsylvania, it is not enough to simply file articles of incorporation and obtain an EIN number. You must also determine which corporate status is right for your business. Under IRS rules, the default corporate designation is C corporation. A corporation wishing to conduct business as an S corporation must elect S corporate status prior to filing its initial corporate return. Failing to do so could cost the corporation and its owners dearly. Before forming a corporation, the owner(s) should carefully consider...

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