Jen|Lee|Law

Main Office Phone: 925-586-6738
Offices in San Ramon, San Francisco, and Tracy, CA
Contact Us
  • Blog
  • About
    • About Jen
    • About Connie
    • About Leo
    • About Amir
  • FAQ’s & Resources
    • COVID-19 Resources
    • FAQ’s & Resources
    • Media
    • Monthly Newsletters
    • Testimonials
  • Services
    • Current Clients
    • Individuals
    • Employees Are Assets
  • Speaking Engagements
  • Schedule Appointment
  • Gift Cards

January 6, 2021 By Jen Lee Leave a Comment

A Lesson in Internet Headlines

Yesterday (January 5, 2021), news websites reported the following two headlines:

PANDEMIC SPURS MOST BANKRUPTCY FILINGS SINCE 2009
The sky is falling, the sky is falling!

BANKRUPTCY FILINGS HIT 35-YEAR LOW THANKS TO GOVERNMENT PANDEMIC AID

Wait, what? I thought the sky was falling.

How can both of these headlines be true? Because the reporters cherry-picked statistics to make the most sensational headlines. As far as business bankruptcies go, it’s true that bankruptcy filings were way up in 2020. However, consumer bankruptcy cases were way down in 2020. So, it was the best of times, it was the worst of times.

To explain, businesses struggled with shutdowns and lack of funding to pay leases, payrolls, and expenses with no revenue. Many businesses have held off filing for bankruptcy to see what a recovery may look like before jumping into bankruptcy, but many were not able to hold off, which resulted in high business filings compared to recent years.

However, consumers and individuals are currently struggling with how to predict the future. It did not make sense in 2020 for most people to file bankruptcy without knowing what debt and income looks like going forward. Also, the pandemic unemployment helped many people stay current on bills. Finally, the eviction and foreclosure moratoriums, along with court closures, have made it less urgent to file immediately to stop those proceedings.

So, take your headlines with a big grain of salt these days. It also helps to remember that you are not alone in facing difficulties. Get advice for your specific situation and use the tools that are available to you.

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

Filed Under: Bankruptcy Process, Business, Mindset

March 30, 2020 By Jen Lee Leave a Comment

The CARES Act and the Paycheck Protection Program: What You Need to Know

Money

Lots of information out there about the new CARES Act and what it purports to do. It’s a huge document and has a lot of moving parts. In an attempt to pull out useful information for the average consumer and small business owner, we are working on a series of blog posts to help answer some questions. 

One of the most interesting sections discusses a new loan program for small businesses that has an element of forgiveness involved. A chief complaint of SBA loans is that businesses were already saddled with debt and adding more debt may not make sense or even be feasible in the long-term. Enter the Paycheck Protection Program (PPP) loan.

The PPP is different than the disaster recovery loan that many have already tried to apply for in the past week or two. Applications are not available yet and documents, procedures, and communication with banks are still being established. The program offers cash flow assistance to small businesses with fewer than 500 employees.

The amount available is equal to 2.5 times the average monthly payroll costs or $10 million, whichever is less, and the average monthly payroll is based on 2019 payroll figures. Monthly payroll costs not only includes wages for employees, but also paid sick leave, health insurance premiums, payroll taxes, and other benefits. The loans are intended to cover payroll costs, business disruption, health insurance premiums, lease or rent expenses, and utilities.

A very important detail is that the loans will not be personally guaranteed or require collateral, which is very different than most SBA products previously on the market.

Now, the forgiveness part, which we should all be looking at to figure out the terms and conditions. Loans under the PPP may be fully or partially forgiven. Loan proceeds used to make payroll, pay utilities, rent, mortgage, and existing business debt may be forgiven, dollar for dollar. However, in order to receive the dollar for dollar forgiveness, employees need to remain employed and paid through the end of June. 

Keeping complete and accurate records will be key to the forgiveness of these loans. You have to be able to show what the funds were used for, that those uses qualify under the program, and that you kept payroll going through the end of June. The better your records, the easier it will be to have the loan reduced on a dollar for dollar basis.

The PPP loans will be offered through local banks, not directly from the SBA. If you need connections to a bank offering these programs, please feel free to email me.

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

Filed Under: Business, Credit Tagged With: business, CARES

Disclaimer and Additional Information

LEGAL ADVERTISEMENT. The information included on this website is not intended as legal advice. You should consult with a lawyer before acting on any information contained in this website.

Jen Lee Law, Inc. is a federally designated Debt Relief Agency. Jen Lee helps clients file for bankruptcy protection under the laws of the United States.

Recent Blog Posts

  • A Lesson in Internet Headlines
  • When Should I Consult an Attorney about my Debts?
  • New Homestead Exemption Will Have Significant Impact On Bankruptcy Practice In California
  • No, The Tenth Circuit Court of Appeals Did Not Say You Can Discharge All Your Student Loans in Bankruptcy
  • I Didn’t Know You Help With That!

Follow Me

Facebooktwitterlinkedinyoutubeby feather
NACBA logo         NACA logo

© Copyright 2016 Jen Lee Law. All Rights Reserved.