Colorado’s legal pot industry may be booming, but the companies struggling to stay afloat in the industry are getting a major buzz kill: under federal law, which still considers marijuana production and distribution illegal, it is impossible to file a Chapter 11 or Chapter 7 bankruptcy. According to the Denver Post, U.S. Bankruptcy Court Judge Howard Tallman ruled in late September that entrepreneur Frank Anthony Arenas’ Chapter 7 bankruptcy filing was null because his business’ activities violate the Controlled Substances Act, even though they are legal within the state of Colorado.
On Thursday, Oct. 2, the U.S. Supreme Court agreed to rule on a case involving a debate over how much Chapter 7 bankruptcy attorneys, Chapter 11 bankruptcy attorneys and Chapter 13 bankruptcy attorneys should be paid by the clients they represent. According to Texas Lawyer, the Supreme Court’s ruling will determine the fate of some $5 million — and could also set an important precedent regarding how bankruptcy attorneys are paid for providing bankruptcy help.
A Rhode Island senator recently introduced a bill that would let individuals with exceptional medical bills to cast off their student debt, in addition to their medical debts, in a Chapter 13 or Chapter 7 bankruptcy. If approved, the proposed bill would go against the 2005 Bankruptcy Bill, which states that student loans, both private and federal, are one of the few types of debt that cannot be discharged by an individual with a Chapter 7 bankruptcy attorney. According to an August 1 Wall Street Journal report, Sen. Sheldon Whitehouse (D., R.I.) proposed the Medical Bankruptcy Fairness Act in order to allow people who have accrued more than $10,000 in medical-related debts in the three years preceding their bankruptcy to eschew their student debt as well. One study has already found that “more than half of the people who’ve filed for bankruptcy in recent years would qualify,” the Wall Street Journal reports.
Trenton, N.J.’s Somerset Hills School has filed a Chapter 11 bankruptcy protection in order to adjust its $3 million in debt. According to an August 6 NJ.com article, the private, tax-funded school for disabled children filed on July 25 at the U.S. Bankruptcy Court in Trenton with the help of a Chapter 11 bankruptcy attorney. The school’s debt includes $1 million owed to its pension fund for current and former employees.
Bankruptcy laws can be very perplexing and complicated. Attempting to file for bankruptcy without any legal representative could cause a person to make major mistakes that could be both time and money consuming. A bankruptcy attorney knows about the important and applicable specifics and details that a bankruptcy case may involve. Whether a person needs Chapter 7, Chapter 11, or Chapter 13 bankruptcy help, there are bankruptcy attorneys are available and willing to assist and fight most cases.