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Category: Bankruptcy
Cryptocurrency Mining Debt: Discharging Energy Costs in Chapter 11 Amid Regulatory Scrutiny

On Behalf of O’Brien Law Firm, LLC

Posted on: April 21, 2025

Crypto mining can be expensive, especially when energy prices spike or the market crashes. Miners in Mississippi now have stronger legal protections under the state’s Senate Bill 2603. However, financial trouble can still hit fast. If you’ve racked up debt from electricity costs or equipment leases, Chapter 11 bankruptcy may offer a way to stay in business while sorting things out. Still, IRS rules and local laws add some tricky layers.

Mississippi Protects Crypto Miners—but the Bills Still Add Up

Mississippi’s Senate Bill 2603 supports digital asset mining at both the residential and commercial levels. It prevents local governments from changing zoning rules to block mining or placing special noise limits on miners that don’t apply to other businesses. Home miners also get protection as long as they follow general sound rules. No special license is required, even for businesses offering mining or staking as a service.

However, these legal wins don’t erase the financial pressure. Running powerful mining rigs around the clock costs a lot, especially when crypto prices fall. That’s where bankruptcy law comes in.

The IRS Treats Mining as Income—Before You Ever Sell

The IRS counts mined crypto as income on the day it’s created. If you mine $1,000 worth of Bitcoin, that $1,000 goes on your taxes, even if you never sell the coin or its value drops later. That means tax debt can pile up before you ever make cash.

Miners can deduct certain costs, such as power bills, equipment, and even home office space. However, those deductions don’t wipe out the original income tax. And in bankruptcy, that tax still sticks.

Chapter 11 Can Help—But It’s Not a Clean Slate

Chapter 11 lets you restructure debts while continuing to mine. Core Scientific, a major U.S. miner, used Chapter 11 to stay operational while cutting deals with creditors. In Mississippi, a similar filing can help you renegotiate equipment leases or electricity contracts.

Still, tax debt tied to mining income often remains. You can reorganize how it’s paid, but you can’t erase it. That’s why timing and legal support matter.

If energy bills, taxes, or equipment costs are stacking up, contact O’Brien Law Firm. We’ll walk you through the next steps and help you build a legal plan that fits your situation.

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Navigating Bankruptcy for Farmers and Fishermen Under Chapter 12

On Behalf of O’Brien Law Firm, LLC

Posted on: February 28, 2025

Farming and fishing are unpredictable industries. Some of the things that can leave business owners struggling to pay their debts include bad weather, market fluctuations, and rising costs. When financial trouble hits, family farmers and commercial fishermen can use Chapter 12 bankruptcy to restructure their debt while keeping their businesses running.

What Is Chapter 12 Bankruptcy?

Chapter 12 is a special type of bankruptcy designed specifically for farmers and fishermen. Unlike Chapter 7, which requires selling assets to pay creditors, Chapter 12 lets debtors create a repayment plan while continuing operations​. This plan typically lasts three to five years and allows farmers and fishermen to repay their debts based on seasonal income​.

Who Qualifies for Chapter 12?

To file for Chapter 12, you must meet the following criteria:

  • Be a farmer or fisherman with regular annual income.
  • Meet debt limits. Farmers must owe less than $11,097,350, and fishermen must owe less than $2,268,550​.
  • Have at least 50% of debts (farmers) or 80% (fishermen) related to business operations​.

Benefits of Chapter 12

  • Stops creditor harassment: As soon as you file, lenders must stop collection attempts, repossessions, and foreclosures​.
  • Restructures debt: The “cramdown” provision allows you to reduce secured debt to the market value of your assets. If your equipment loan is more than what the equipment is worth, Chapter 12 can lower what you owe​.
  • More flexible payments: Unlike Chapter 11 or 13, Chapter 12 recognizes that farmers and fishermen earn money seasonally. The court considers this when approving a repayment plan​.
  • Debt forgiveness: Once the repayment plan is complete, some remaining debts may be discharged​.

Things to Consider Before Filing

Chapter 12 works best for those who want to keep their business running while paying off debt. However, there are a few things to keep in mind:

  • You must show a stable income, even if it fluctuates throughout the year​.
  • A court-appointed trustee will oversee payments to creditors​.
  • Certain debts, like child support and some taxes, cannot be erased​.

If debt is threatening your farm or fishing business, Chapter 12 may offer a way forward. It provides protection from creditors and gives you time to repay what you owe. Contact O’Brien Law Firm, LLC, in Southaven, MS, today to discuss your options and get the legal guidance you need.

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Navigating the Complexities of Bankruptcy Filings for Serial Entrepreneurs

On Behalf of O’Brien Law Firm, LLC

Posted on: January 22, 2025

Starting a business always comes with risks. For serial entrepreneurs in Mississippi, taking chances on multiple ventures can sometimes lead to financial hurdles down the road. When debts pile up and businesses struggle, filing for bankruptcy may feel like the only way out. However, bankruptcy is not always straightforward, especially for entrepreneurs who have started more than one business.

What Bankruptcy Means for Serial Entrepreneurs

Bankruptcy is meant to help people and businesses manage debt, but it affects serial entrepreneurs differently. For small business owners, especially those who have started multiple ventures, bankruptcy often focuses more on personal financial issues than on saving a business.

Chapter 11 bankruptcy is one option for struggling businesses, allowing them to reorganize their debts. However, it can also trap entrepreneurs in a failing business longer than necessary. This situation is known as the “lock-in effect,” where staying with an existing business feels easier than starting a new one.

In Mississippi, entrepreneurs have several bankruptcy options to consider:

  • Chapter 7 Bankruptcy: This involves selling off assets to pay debts. It can give entrepreneurs a fresh start but may also put personal assets at risk if they have guaranteed business debts.
  • Chapter 11 Bankruptcy: This allows businesses to restructure debts, but it can make it harder for entrepreneurs to leave a failing business and try something new.
  • Chapter 13 Bankruptcy: This option works best for sole proprietors. It lets them create a plan to repay debts over time while keeping some control over their business.

The Challenges Entrepreneurs Face During Bankruptcy

Filing for bankruptcy is stressful and complicated, but serial entrepreneurs face even more challenges.

  • Struggling to Get Credit: After filing, it can be difficult to get loans or funding for future business ideas because of damaged credit.
  • Emotional Stress: Business failure is tough, and it can make entrepreneurs hesitant to try again, even if bankruptcy laws are meant to help.
  • Complex Legal Processes: Bankruptcy laws are not simple. Entrepreneurs need to understand how filing will affect their personal debts and future plans.

O’Brien Law Firm, LLC, knows how challenging this process can be for serial entrepreneurs in Mississippi. Contact our team today to learn how we can help you move forward.

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How Does Bankruptcy Affect Co-Signed Loans and Joint Accounts?

On Behalf of O’Brien Law Firm, LLC

Posted on: November 22, 2024

Filing for bankruptcy can bring debt relief, but for those with co-signed loans or joint accounts, it may complicate financial responsibilities. When a loan or account is shared, both parties are responsible for the debt, and bankruptcy can shift the burden in unexpected ways.

How Co-Signers Are Affected by Bankruptcy

When someone co-signs a loan, they are legally bound to the same responsibilities as the primary borrower. This means that if the borrower cannot repay the debt, the lender can pursue the co-signer for payment. Bankruptcy can change the situation depending on the type filed.

Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, the primary borrower’s debts are typically discharged, meaning they no longer have to pay them. However, the co-signer remains fully responsible for the debt.

The lender can pursue the co-signer for the entire balance, and if the co-signer cannot pay, they may face collection actions, wage garnishments, or negative credit reporting.

Chapter 13 Bankruptcy

Chapter 13 provides some protection for co-signers. During the repayment plan (usually three to five years), an automatic stay known as the “codebtor stay” may prevent creditors from pursuing the co-signer, provided the borrower keeps up with the plan payments.

This stay can be lifted if the creditor proves that the co-signer directly benefits from the debt, such as using a car financed through the loan.

Joint Accounts and Shared Financial Responsibility

Joint accounts, often opened by spouses or family members, operate similarly. Both parties are equally liable, which means bankruptcy affects each account holder.

  • If one account holder files for Chapter 7, the debt might be discharged for that individual, but the other joint owner will still be fully liable.
  • In Chapter 13, the joint account holder may have temporary protection under the codebtor stay, but this depends on the repayment plan’s terms and whether it covers the entire debt.

Move Forward with Bankruptcy and Co-Signed Loans

Bankruptcy can provide significant debt relief, but it is important to consider its impact on co-signers and joint account holders. Each bankruptcy type has different effects, so it is important to review all options with a legal professional. For guidance tailored to your situation, contact O’Brien Law Firm, LLC, today.

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Filing for Bankruptcy Without an Attorney: Pros and Cons

On Behalf of O’Brien Law Firm, LLC

Posted on: September 24, 2024

If your source of income comes to a sudden halt, you might find yourself unable to pay your debts. Under such circumstances, you have to file for bankruptcy to keep bill collectors at bay, restructure your loan installments, and eliminate your debt in some cases. The question is whether you should consider filing for bankruptcy on your own or if you should seek guidance from an attorney.

The Advantages

  1. Elimination of Attorney Fees: The decision to file for bankruptcy without the help of a bankruptcy attorney offers you the benefit of saving money.
  2. Unmatched Control Over the Filing Process: The decision to file for bankruptcy on your own means that you are in charge. It involves communicating directly with the court, making important decisions, and putting together all the paperwork.
  3. You Will Learn All That It Takes to File for Bankruptcy: Filing for bankruptcy on your own can be a learning experience. You will understand the legal system and more about financial management.

Cons of Filing for Bankruptcy Without an Attorney

  1. Inability to Navigate the Complexities of the Legal Procedure: Filing for bankruptcy in the United States is not a straightforward issue, as it entails navigating complex legal procedures. There are a set of requirements that determine if the court will declare you bankrupt or not. There is usually the disadvantage of getting a negative outcome if you fail to adhere to certain rules and requirements.
  2. There is the Possibility of Making Detrimental Errors: Like any other legal procedure, there are specific ways to file for bankruptcy that a layman may not be aware of. A lack of knowledge on these specifics can result in erroneous filing that could get your case dismissed.
  3. Lack of Legal Expertise: Seeking the services of an attorney when filing for bankruptcy comes with additional benefits, such as expert legal advice. If you do it alone, you are missing out on the benefits that come with experience and knowledge in negotiating for the best outcomes.

Make the Best Choice for Your Future

You can ultimately determine your financial future by correctly filing for bankruptcy. Filing your bankruptcy without an attorney can save you the cost of attorney fees, but there are other major risks you don’t want to take as they outweigh those savings. At O’Brien Law Firm, LLC, we have seen many cases in Southaven, MS, where an experienced attorney has made a substantial difference in achieving a favorable outcome. Contact us today for professional guidance to navigate this challenging process successfully.

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