Law Offices of David A. Arietta

Information on struggling businesses and personal guaranties.

Are lenders getting tired of waiting?? According to the American Bankruptcy Institute: The coronavirus outbreak helped push about $146 billion of commercial real estate into serious risk of bankruptcy or default at the end of last year, particularly in hotels and retail. Troubled borrowers secured breaks of six to 18 months on their debt last spring as the pandemic shut down large parts of the economy and revenue dried up. But nearly a year later, some lenders are running out... of patience and don’t have the ability to keep extending credit. A glimpse of what lies ahead is provided by the $540 billion market for mortgage loans bundled into securities. About 7.58% of the loan recipients were at least 30 days late on a payment in January. We have tons of stuff that’s in purgatory, according to Manus Clancy, a senior managing director at Trepp. The workout notes every month say the special servicer and the borrower are talking about forbearance and extension. Roughly $430 billion of commercial real estate debt comes due this year, out of $2.3 trillion that matures in the next five years, according to Morgan Stanley. See more

SBRA (new streamlined Chapter 11 process) timeframes look to be extended FOR ONE ADDITIONAL YEAR according the American Bankruptcy Institute: Durbin, Grassley Introduce Bipartisan Legislation to Extend CARES Act Bankruptcy Relief Provisions Amid the ongoing COVID-19 pandemic, U.S. Senate Democratic Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and U.S. Senator Chuck Grassley (R-IA), Ranking Member of the Senate Judiciary Committee, today introduced the COV...ID-19 Bankruptcy Relief Extension Act, bipartisan legislation to temporarily extend COVID-19 bankruptcy relief provisions enacted as part of the March 2020 CARES Act and December 2020 omnibus appropriations bill, according to a press release. The bill would extend for an additional year CARES Act bankruptcy provisions that are set to expire on March 27, 2021. These provisions do, in part, the following: - Allow more small businesses to file for streamlined chapter 11 bankruptcy proceedings under Grassley’s Small Business Reorganization Act of 2019 by increasing the maximum debt limit for those procedures from $2.7m to $7.5m. - Amend the definition of income for chapters 7 and 13 to exclude federal COVID-related relief payments from being treated as income for purposes of filing bankruptcy.

Not owned by the Trump family; they licensed the name to a resort which then filed for bankruptcy.

Some good thoughts before filing bankruptcy.

Bankruptcy filings still trending downward despite what people think when they hear of high unemployment and pending evictions. Noticed some recent filings of collection actions in state court though.

When should you contact an attorney about your debt?

People have recently asked me are bankruptcy filings up? Answer definitely NOT. Per the Northern District of California Bankruptcy Court website, filings in November, 2020 are down 35% as compared to November, 2019. There has been a noticeable drop since March when Covid closures started. Chapter 7 filings are down 26% and Chapter 13 filings are down a whopping 60%. Putting that in perspective, bankruptcy filings have been dropping each year since 2011. We are on track to have half as many filings as 2015. The mortgage forbearances, eviction moratoriums, and court closures are big reasons but at some point the situation will change.

After practicing bankruptcy law for over 25 years, the most common issues facing a struggling small business are whether to close down, try and sell the business, or declare bankruptcy.

Here is an update from Contra Costa County Courts LIMITED COURT CLOSURE BEGINNING MONDAY, DECEMBER 7, 2020 COVID-19 cases have spiked, resulting in a new stay-at-home order for the county... effective this weekend. To limit the risk of COVID-19 transmission, the Court will enact a LIMITED COURT CLOSURE effective Monday, December 7, 2020, and until further notice. THE COURT WILL BE CLOSED TO THE PUBLIC. Exceptions are criminal preliminary hearing witnesses, attorneys, and defendants in matters with time not waived. Masks are required for entry. JURY TRIALS ARE SUSPENDED. Criminal preliminary hearings with time not waived will proceed. Some of our pending probate matters will be continued. Stay tuned as this develops.