The partners had borrowed more than $200, 000 to purchase the building and begin renovations. Beren was concerned because the expenses incurred were many and the other partners were not willing to obtain additional funding. The partnership does not pay its debts, which have accumulated, and they are more than $380, 000. The partnership only has $550 in the bank, an amount that is too little to pay off the debts. Before a court can declare the partnership bankrupt, it has to consider all the assets that the partners have. The partners incurred the debts in the course of business operations since they were renovating the building they had purchased. The building is part of the assets, and the court has to consider its value. The partners can sell the building as an alternative to filing for bankruptcy. However, it is clear that the partners do not agree on issues, thus, the reason they could not manage to pay their debts.
Properties of the partners have to be considered before the partners are considered insolvent. The court has to determine all the value of the partners’ property, including non-partnership assets. In this case, all the partners are liable for debts. Partners can file for personal bankruptcy. Creditors file an involuntary petition, and this places the debtors into bankruptcy. I think that the petition should be granted. This will follow the court determining if the partners are not in a position to pay off their debts. The partners should show their financial status. This includes the financial status of the business as well as their personal wealth. After satisfying that the partners are not in a position to pay their debts, then the court can declare the partnership bankrupt. Involuntary petitions can be granted for chapter 7 bankruptcies, and partnerships can petition for this form of bankruptcies. This will enable the debtors to pay off their obligations.
The bankruptcy estate includes all the debtors’ property, as well as the debtor’s interests. Some properties are exempt from the estate. When a debtor adopts bankruptcy exemptions, creditors cannot claim such properties. Some of the exempted property includes un-matured life insurance, homestead exemptions, government benefits, and retirement funds that are exempt from taxation. States can establish their own exemptions. A debtor can choose between federal and state exemptions, or they may require the debtor to follow state law. Federal homestead exemptions tend to be lower than many state law exemptions. A person who does not adopt the federal exemptions has to comply with the state laws.
Florida is liberal with some exemptions. For instance, it has not set a limit on the dollar amount on homestead exemptions. The homestead exemption applies to any home that is a person’s residence and this includes modular homes, condominiums, mobile homes, and single-family homes. However, it limits the size of the real property considered for homestead exemption. The property to be exempted cannot be more than half an acre in the municipality or more than 160 acres in other parts of the county. To file for bankruptcy in Florida, a person should have lived there for at least two years. Florida applies the exemption law of the state. A person who has not lived within the state for the stipulated time does not qualify for the state exemptions, but he or she can use the federal exemptions. If the person does not want to use the federal exemptions, then he can choose to use the exemptions of the state where he lives, or the state where he has lived for the last two years.