Business Law Assignment

Business Law Project;

Partners will be assigned in class. Please prepare written answers to the following and exchange with your partner and me.

1. Describe the assets you can keep even when going bankrupt and discuss the reasoning behind each exemption.

2. Describe the debts that cannot be discharged in bankruptcy and discuss the reasoning behind each.

3. Describe the kinds of business organizations including partnership, sole proprietorship, limited partnership, LLC and corporation. Include in your discussion the pros and cons of each organization.

4. Go on line and get the paperwork for creating an LLC. Create (pretend!!) an LLC with your partner.

Once I've officially filed for bankruptcy, what assets — if any — may I keep?

In terms of your life after bankruptcy, let's look at both Chapter 7 (called "liquidation" or "straight bankruptcy") and Chapter 13 (known as "reorganization") separately. Something important to remember here: Even though bankruptcies are regarded as federal proceedings, there are certain exemptions that vary from state to state.2 Before you file, be sure to familiarize yourself with specific state laws so that you can best determine which properties and other assets are deemed exempt and can't be sold off.

Now, let's further examine the two most common types of personal bankruptcy and identify some rules regarding the items you can get back:

Chapter 7. In most cases, a trustee is placed in charge of your existing assets and assigns cash values to each of them. From there, the trustee divides up the assets among your creditors. Since most Chapter 7 filings don't usually include non-exempt properties (meaning that everything you have — all your assets — can be sold off), these are often called "no-asset cases." No-asset cases are usually closed within four months of filing, while asset cases tend to close about two to four years after filing.3

There are some state-by-state exceptions, though; Florida, for...