Lawyers Who Can Save You in a Bad Economy
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Saving your Business
Business owners are also weathering the storm of a bad economy. Don Gelber, a bankruptcy and creditor-debtor-rights lawyer with Gelber Gelber & Ingersoll, works with clients filing for Chapter 11 bankruptcy to help resuscitate their business.
“Chapter 11 is aimed at giving a troubled company a chance to survive,” says Gelber. “It’s like putting the company in a financial emergency room.”
Gelber recommends filing for Chapter 11 before it’s too late. While most companies carry some debt, there are other indications that a business is floundering. Here are some red flags:
• Your company is unable to make its monthly loan payments.
• Core operational expenses have become more difficult to pay.
• Projected revenue is steadily declining.
• Employees are not being paid.
If any of these are true for your company, Gelber says it’s a good candidate for legal protection through Chapter 11. “The court puts the company on emergency life support by protecting it from actions that its existing creditors might try to take,” he says, for example, seizing bank accounts, foreclosing on property or trying to evict a company from its business premises.
Gelber also helps his clients put together a financial and operational strategy, so that the business can operate during the bankruptcy and successfully surface afterward.
Here are some ways that a business can modify its operations:
• Cut back on optional or discretionary expenses.
• Streamline product lines and locations.
• Lower the prices on the goods or services the company offers.
Protecting the Family Plan
One upside of a down economy—people are paying more attention to money. Judy Lee, of Goodsill Anderson Quill & Stifel, has noticed that more of her clients are putting together a budget or tracking financial statements. “This actually makes the time really ripe to do estate planning, because they have this information available,” says Lee, who has practiced trusts and estates for more than 20 years.
With the waning economy, people might see a decrease in the assets they can pass on, but Lee adds that changes can be made by amending a revocable living trust. “Where a lot of people have seen a number of their investments get reduced in value, it makes sense to be as efficient as possible to pass whatever you have remaining to your beneficiaries,” she says.
In fact, Lee recommends getting started on long-term financial planning whether it’s a booming economy or a devastating recession.
Money and Marriage
In addition to affecting your job status, business or investments, a rough economy can also wreak havoc on personal relationships, namely marriages. William Darrah—who has been practicing family law since 1976—helps divorce eight or nine couples a year, and says that finances are one of the top culprits leading to divorce.
Before he represents one of the spouses in a divorce case, Darrah counsels the two to make sure they have exhausted all other options. “My job is damage control. I think of myself as an alpine guide, and we just want to get off the mountain without getting hurt.”
After ruling out reconciliation as a solution, Darrah works with his clients to reach an agreement with which the couple can settle on. “I try to help people get through it as quickly as they can, because the longer it takes, the more it’s going to hurt.”
Another integral part of his work is public education. For the past eight years, Darrah has held free monthly seminars at the Hawaii Supreme Court, designed to help guide couples through money issues in a divorce.
95% of Hawaii's divorces are uncontested
Darrah has noticed that more of the 4,100 couples getting divorced on Oahu every year are electing not to get a lawyer. Instead, they use a mediator to come to an agreement and using the free self-help materials provided by the family court.
Despite his line of work, Darrah isn’t jaded. “I think we were built to marry, we’re happiest when we’re happily married.”
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