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Bankruptcy

Tim Dack, Bankruptcy Lawyer

Bankruptcy

 

Tim Dack represents Debtors, Creditors, Trustees in  all matters within the bankruptcy court.

Consult an experienced attorney to help you decide whether bankruptcy is right for you. There could be other options available to you besides bankruptcy.


CHAPTER 7

One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The debtor has no liability for discharged debts. In a Chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1). Although an individual Chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.

CHAPTER 11

Although individuals may file a petition under Chapter 11, this chapter is primarily designed for the rehabilitation of distressed businesses. The court’s largest and most complex cases are usually Chapter 11 cases. When a Chapter 11 petition is filed, the debtor remains in control of the business and is referred to as the “debtor-in-possession”, with rights and duties of a trustee. No trustee will be appointed in a chapter 11 case unless an interested party asks the court to do so and shows sufficient “cause” (e.g., fraud or mismanagement on the part of the debtor). A committee of unsecured creditors is usually appointed in a Chapter 11 case to monitor the debtor’s progress. If the debtor qualifies as a small business according to 11 U.S.C. §101 (51D), additional deadlines and requirements are imposed. The Chapter 11 debtor’s ultimate goal is to file a plan of reorganization that is acceptable to creditors and the court. The plan of reorganization outlines how the debtor will pay its creditors and reorganize its obligations and operations.

CHAPTER 13

A Chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” (1) If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. §1322(d). During this time the law forbids creditors from starting or continuing collection efforts.

ADVERSARY PROCEEDINGS

An adversary proceeding is a lawsuit arising in or related to a bankruptcy case. It is commenced with the filing of an adversary proceeding cover sheet, complaint, and the filing fee of $350.00, if applicable.

PROOF OF CLAIM

If you have been instructed by the Court to file a proof of claim, Tim Dack’s office can help you.

DISCHARGE IN A BANKRUPTCY

A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.