Olga Zlotnik
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Tough Financial Times

Tough Financial Times

www.olgazlotniklaw.com

Olga_Zlotnik_profileNavigating the Bankruptcy Tide:
Tips to Help You Stay Dry and Steer Clear of Bankruptcy

When people are being hounded by creditors and going through tough financial times, they come to me for help.  In listening to, advocating for, and helping my clients, I have had the privilege of learning some financial do’s and don’ts.   The truth is that financial trouble can happen to anyone.  For example, job loss, which often times means that there is no longer enough money to pay the bills, is one common reason why someone you know may be forced to file for bankruptcy.  The loss of a job usually is the type of financial hardship in life that is out of our control.  But, some financial issues can be avoided with help and guidance.  In prior issues, I introduced you to the first twelve tips to staying out of bankruptcy. Here are the final two tips:

Tip 13: Do Set up a Limited Liability Company to Limit Personal Liability on Business Ventures.

If you are running a business, chances are it could go sour.  To protect yourself and your assets from your business creditors, set up a limited liability company, s corporation, or other similar business structure (consult with a legal and tax professional to determine which structure is best for you).  This will separate you from the business and shield, in many cases, your personal assets from your business creditors.  This is why members, officers, and/or shareholders of LLCs and/or corporations are described as having limited liability for the debts of the company.  Despite this protection, there are instances when members, officers, and/or shareholders of companies are held liable for the debts of the company, such as when the officer uses business assets to pay for personal debts (for example, by paying personal bills from the business bank account).

Tip 14: Do Get an Umbrella Insurance Policy.

On your way to the grocery store, you hit and badly injure a pedestrian.  Or, a guest in your home injures himself while diving into your pool.  The injured pedestrian or guest sues you and is awarded millions of dollars in the lawsuit.  This could wipe you out financially.  Hopefully, this kind of tragedy never happens to you.  But, what if it did?  Your auto or homeowners insurance policies have limits and usually do not cover you for the millions of dollars you may be on the hook for.  This is where umbrella or excess liability insurance coverage comes in.  It will cover you for claims exceeding the limits of you your auto and homeowner’s insurance policies up to a certain amount.  An umbrella insurance policy covers you in situations where auto and homeowners insurance would not, preventing financial ruin in some cases, such as in the case of the pedestrian and guest above.  Check the limits of your auto and homeowners policies and look into umbrella insurance.

For more information on bankruptcy, debt, and litigation-related issues, please visit www.olgazlotniklaw.com

DISCLAIMER

Please note that the information provided is for informational purposes only and does not constitute, and should not be considered legal advice. Transmission of the information contained here and receipt by the reader is not intended to create and should not be construed as creating an attorney-client relationship. The only way to create an attorney-client relationship with us is through a written and signed agreement with us.  The bankruptcy law services described herein are with respect to bankruptcy relief under the Bankruptcy Code. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.