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Leading Business Attorney Paula Collins Discusses Bankruptcy as the Fastest Way to Financial Security




Paula Collins, EA, MBA, Esq., is a business attorney licensed in Missouri and in New York. Collins has over ten years experience as a tax professional. Now, as a graduate of Brooklyn Law School, she champions the rights of individual taxpayers and small business owners through legal and tax representation and consulting.

Did the CARES Act offer any relief to small businesses facing bankruptcy?

You bet it did! Tucked away in the 880 pages of the CARES Act and overshadowed by the PPP Loans as well as the Stimulus Checks that taxpayers got, was a huge break to business owners who find themselves facing a debt situation. The CARES Act took a really new revision to the Bankruptcy Code that was implemented in late February, 2020 – really only a few weeks before the CARES Act – and it made it even more favorable to small business owners. They call it Subchapter V. The original February code gave relief to businesses with debts under $2,725,625. The CARES Act extended that relief to businesses with debt, both secured and unsecured, under $7.5 million! The other relief offered to businesses is to streamline the process so that the business can move into and out of bankruptcy faster. Finally, they greatly cut down on the paperwork required, which will also cut down on the accounting and legal fees that a business has to incur in order to go through bankruptcy. There is also a lot in the CARES Act for individuals, so please contact me if you are faced with debt and we can see which aspects apply to you.

How does a business or an individual know when to file bankruptcy?

Well, timing is everything. For example, if a business wants to take advantage of the new breaks offered in the CARES Act, they need to file within the next 11 months. There are reasons to rush to file, and there are reasons to delay filing. Did you know that you can discharge tax debt that is a certain number of days old? So wouldn’t it be tragic if you filed and then later learned that you could have waited another few days or few months to get those tax debts discharged? Also, if you are under water on your car, meaning you owe more money than it is worth, if you time it right, you can get address the excess debt in a Chapter 13 bankruptcy and get a new payment that accurately reflects the value of the car.

Why do you say that bankruptcy is the fastest way to financial security, and possibly to accumulating personal wealth?

Well, think about those little tables you see inserted with your credit card bills each month, that show how long it will take you to pay your debt if you make minimum payments, versus how long it will take if you make a larger payment. Take for example, someone who owes $13,098 in credit card debt. If they make minimum payments, and assuming they no longer make new charges, it will take 26 years to pay off the debt, which by then will be $29,392. If they make a payment of $458, they can pay off the $13,000 in 3 years, paying $16,482. 

That same person with $13,098 in debt, if they discharged the debt in bankruptcy, and invested $130 a month for 26 years, assuming even a modest 4% rate of return, would have $71,148! Wow! Wouldn’t that make a nice cash infusion into your retirement fund!

Now bear in mind, I am not advocating that someone should intentionally flout their obligations to pay, nor am I suggesting a fraudulent petition for bankruptcy. What I am suggesting is that the laws of the nation allow a person who is in debt to seek relief. And while many people hear the word “bankruptcy” and think “failure”, I hear “bankruptcy” and think about the fact that someone is wisely using the provisions of the courts to really set themselves on the road to good financial health. The courts rightly offer people the opportunity for redemption, transformation, and transcendence through bankruptcy. If you would like to hear more, I urge you to reach out and let’s have a conversation and see how your personal or business situation could improve with bankruptcy.

Visit: for more questions affecting your business and bankruptcy concerns.

Richard is a Post-Graduate in Mass Communication who is acquainted with the dos and don’ts of ethical journalism and news writing techniques. He is also a contributor to the World news section at USA Reformer.

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