You may have memories of watching home shopping channels, or even have received a gift purchased by a loved one from one of those channels. If so, there’s a good chance it was a brand that falls under the QVC Group. While QVC Group has established itself as a leader in home shopping television, there are still insurmountable challenges many businesses are facing, especially with a more outdated business model like QVC. Companies in almost every industry are facing rising operational costs, but not a declining customer base like QVC Group. QVC Group has also been more susceptible to tariffs increasing their prices even higher than other types of businesses. But bankruptcy will give QVC Group protection from its creditors and allow it to restructure in a way that gives it a better chance of survival during these current difficult economic conditions. Would your life be less stressful if you cleared burdensome obligations, with creditors kept at bay in the meantime? Let one of our skilled Arizona bankruptcy professionals evaluate your situation at no cost to you. Schedule your free consultation today by calling 602-609-7000.
QVC Group’s Chapter 11 Bankruptcy Case
Chapter 11 bankruptcy is a unique type of bankruptcy that is popular among businesses because they are allowed to stay open and keep operating after filing. If a business doesn’t qualify for a small business chapter 11 filing, its top creditors will form a committee that votes on issues that affect the case and the business moving forward. This is unnecessary with a prepackaged plan, like in the case of QVC Group. The company has a reported $6.6 billion in debt, but after bankruptcy discharge, should clear about $5 billion of that. The bankruptcy filing will also help it access sources of funding that will keep QVC running while it refocuses its business strategies. QVC’s proposed bankruptcy plan keeps the business running as usual, with no furloughs or layoffs planned. It is expected to emerge from bankruptcy in about 90 days.
How Much Can I Discharge in a Consumer Bankruptcy Filing?
QVC Group is clearing approximately $5 billion through its bankruptcy filing, which is an astronomical figure. While your total debt balance is probably nowhere near that high, you may still be wondering how much it is possible to clear with one of the more common forms of consumer bankruptcy, chapter 7 or chapter 13. If you qualify for both, the answer will be slightly different based on the chapter you select.
There is technically no limit to how much debt can be cleared by a chapter 7 bankruptcy filing. The major caveat is that chapter 7 bankruptcy only cleared unsecured debt, not secured or priority debt. This can be enormously beneficial to a household that is weighed down by unpaid medical bills, maxed out credit cards, etc. But it is not as useful for a debtor who has fallen behind on their mortgage, who has their wages garnished for child support, or who is another secured or priority debt collection situation. Additionally, credit card debt can be excluded from discharge if the debtor exceeded pre-bankruptcy luxury spending and cash advance limits.
To understand how much debt can be cleared by chapter 13 bankruptcy, it’s important to understand how it functions. A debtor must be able to pay bankruptcy costs, secured debts, and priority debts in full during their payment plan’s prescribed term in order to qualify. This is three years for debtors whose household income falls below their state’s median income threshold based on the number of members in their household, and five years for debtors who earn more than that amount. When those three categories of liabilities have been paid, the debtor’s plan payments will begin going toward their unsecured debt, or debt that could be cleared by chapter 7 bankruptcy. When they have completed their 3 or 5 years, any remaining unsecured debt will be discharged. So theoretically, chapter 13 bankruptcy can clear limitless amounts of unsecured debt, but the debtor must be able to pay off all of their other debts in full, and still could pay some or all of their unsecured debts in their payment plan.
Choosing the Right Chapter for You
You can’t file for bankruptcy based on the benefits you want to receive alone. It’s also important to confirm that your income makes you eligible for the chapter of bankruptcy you wish to file. In general, chapter 7 is about proving you don’t earn enough money to pay off debts, while chapter 13 is about proving you earn just enough to pay off your most important debts. To show this for chapter 7, a debtor can simply compare their household income to the median in their state- if their household income is less, they qualify. Otherwise, the debtor can use the means test to show they don’t have enough income left after paying their (reasonable) bills to pay their debts as well. The means test also comes into play for chapter 13 income qualification. Here, the income they have left after paying their bills must be enough to pay off certain types of debts, with unsecured debts paid to the extent the debtor can afford.
Asset protection is a secondary concern when choosing your bankruptcy chapter. Many of your assets will most likely be covered by Arizona’s bankruptcy exemptions. But Arizona doesn’t allow for the use of federal exemptions, nor does it offer a wildcard exemption, so the debtor must make it work within the confines of Arizona’s exemption statutes. Some of the most commonly used exemptions include the homestead exemption, the motor vehicle exemption, and the household goods and furnishings exemption. So what happens if the debtor doesn’t apply an exemption to any of their assets, or the exemption is insufficient to cover the asset’s value? Here, the trustee can, in their discretion, seize any unprotected assets to pay off debts from the bankruptcy estate. They will be sold by auction to the highest bidder, and the trustee gets to keep a portion of the proceeds as payment. So, if you have assets that aren’t protected by bankruptcy exemptions, you may need to consider chapter 13 as opposed to chapter 7. However, this can impact your plan payments, so you should always discuss your situation with an experienced bankruptcy lawyer before filing.
There are other factors that can impact your bankruptcy eligibility. To discuss your unique circumstances with an experienced Arizona bankruptcy lawyer today call 602-609-7000.
File for Bankruptcy with Arizona’s Choice for Zero Down Debt Relief
When you read about major companies like QVC Group filing for bankruptcy protection, it may get you wondering how declaring chapter 7 or chapter 13 bankruptcy in Arizona could improve your financial situation. A member of our Arizona bankruptcy team can thoroughly review your situation with you to determine which type of bankruptcy would be most effective for you. If you’re eligible, you’ll also be quoted with a post-filing payment plan option starting as low as Zero Dollars Down. Want to take the first step toward debt relief and financial recovery? Schedule your free consultation with one of our skilled Arizona bankruptcy professionals today at 602-609-7000 for more information about our firm.
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