L.I. based Vitamin World to file for Bankruptcy

Long Island, N.Y.-based seller of vitamins and nutritional supplements, Vitamin World plans to file Chapter 11 bankruptcy this month with the hope of getting out of what they say are expensive leases for their stores.

The vitamin and nutrition supplement seller has 345 stores around the country. Madden told Newsday  the company is filing bankruptcy, to renegotiate “problematic lease agreements.”

In his statement Madden said

“While a handful of landlords cooperated, the vast majority have not,” he said in the statement. “At this time we have no other option than to restructure the company’s real estate portfolio by filing for Chapter 11 protection.”

Now the question is, if you as an individual, file for bankruptcy can you get out of paying back rent or prevent eviction?

Chapter 11 is designed for businesses. Individuals can also use chapter 11 bankruptcies but it is far more complex and expensive to pursue. There would also be administrative burdens. The ultimate purpose is to allow you to reorganize yourself, giving you an opportunity to restructure debt and get out from under certain burdensome leases and contracts.

Residential renters filing personal bankruptcy most often file under either Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. Chapter 7 is a liquidation bankruptcy in which the bankruptcy trustee sells the debtor’s assets, with a few exceptions, and uses the money to pay off creditors. Chapter 7 bankruptcy is only available to individuals with low income and few assets.

Chapter 13 is also known as the wage owner plan. This helps qualified individuals who have a regular income and who are willing to repay their creditors but are in financial difficulty. The advantage of chapter 13 is that it protects you from the collection efforts of your creditors and permits you to keep your property while giving you time to catch up. In Chapter 13, you will have to work out a periodic payment plan that all your creditors can agree on to pay off their debts.

Chapter 7 is the most common and easiest type of bankruptcy usually for individual consumer debtor. Under this type of Bankruptcy, you can get relieved of your debts while keeping certain assets. This can be done only if you have an income lower than a certain limit.

Back rent is treated like any other debt like credit cards, medical bills, etc. and can and must be included in bankruptcy. It is unsecured debt. If you have back rent payments and are facing eviction, bankruptcy will delay the eviction proceeding, but only for a for a short period of time. An automatic stay goes into effect the minute you file for bankruptcy.

Unfortunately, when the bankruptcy is over, the landlord can move forward with eviction. On the other hand, if you can’t afford the rent, you can break the lease under bankruptcy, but be careful of doing that  It could hinder your ability to sign new leases in the future.

This post is just a thumbnail overview and shouldn’t be taken a legal advice. If you plan to file for bankruptcy to help with eviction, contact an attorney

 

 

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Pitcher’s fall from World Series hero to bankruptcy

Former starting pitcher Livan Hernandez, who won the 1997 World Series MVP in his rookie year with the Miami Marlins filed for bankruptcy last month. According to the Miami Herald, the 42 year-old Hernandez and one time New York Met made approximately $53 million over 17 seasons in the league. Now owes roughly $1 million to about 50 different creditors, including credit card companies and is worth just $50,000, according to court documents.

He also owes money in back taxes and $220,000 to a local businessman. German Carreno Rodriguez lent Hernandez the money in 2013 to help him pay bills. He has not paid back any of the money and is being sued by Rodriguez. Hernandez filed for Chapter 13 bankruptcy which unlike Chapter 7, would allow him to come up with a plan to pay back his creditors. Shortly after throwing out the first ceremonial pitch at the Marlins home opener this year, a judge issued an arrest warrant for evading a court hearing over the lawsuit.

After fleeing Cuba in 1995, Hernandez signed a $4.5 million contract with the Marlins. He was traded to the Giants two seasons later and the rest of his career bouncing around the league, including one season with the Mets. He wound up ended up playing for nine different franchises before retiring at age 39.

The Washington Post quotes Hernandez as saying in 2011

“It’s not about money,” Hernandez said in 2011, after throwing his 50,000th pitch in the big leagues. “I lived before with no money. It’s about where you feel comfortable. I’ve seen a lot things. In ’05, [Ryan Zimmerman], he was a rookie that year. I’ve seen a lot of things in the past. You want to be a part of something that’s really nice.”

 

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Raise in Filing Fees for Chapter 7, Chapter 13 Bankruptcy

As if times are not tough enough for bankrupt debtors, The US Bankruptcy Court just announced a cross the board increase in filing fees, effective December 1, 2016.

The latest, revised rates for filing a Chapter 7 Bankruptcy are $335.

Similarly, the filing rates for Chapter 9 and a Chapter 11 Bankruptcy also increased to $1,717 each.

For Chapter 13, the filing rate is now $310.

For details of all other rates relating to bankruptcy filings, please visit the following website:

http://www.nysb.uscourts.gov/filing-fees

 

For more information email me at j.weinstein@jlwlawoffices.com or call me at 212-693-3737 for Free Consultation

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