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Chapter 11 Explained

October 31, 2011 By Leave a Comment

By Andrew Sarski -

When a person or a business needs to file for bankruptcy protection, there are several chapters within the United States Bankruptcy Code under which the initial petition can be filed that will govern the subsequent proceedings. While many people understand the basics for bankruptcy petitions that are more consumer-oriented and usually filed under Chapter 7 or Chapter 13, many see filings under Chapter 11 of the code as extremely complicated and difficult to understand.

While a bankruptcy filing under Chapter 11 is usually a complicated matter, there are some basics that are not difficult to understand. However, this is not a filing that one should attempt to take on individually. You will need professional help in order to make sure that all goes as it should, so contact a bankruptcy lawyer today to schedule an initial consultation if you are having trouble meeting your obligations.

Basic Procedure under Chapter 11

Generally, a Chapter 11 filing is done by businesses, and this sort of filing is known as either a ‘reorganization bankruptcy’ or a ‘rehabilitation bankruptcy.’ The reason for these labels is that a Chapter 11 filing basically gives the petitioner time to put together a plan that helps it get out from under the debts it cannot pay at the time of the filing and to one day ‘emerge’ from bankruptcy.

Below is a brief look at the procedures involved with a Chapter 11 filing:

  1. Initial filing – When a business files for Chapter 11 protection, the court will order that the creditors cease with collection efforts while the case is pending, much like in a consumer bankruptcy filing.
  2. Disclosure statement – The filing party must also file a disclosure statement that lists all assets and liabilities as well as a plan for reorganization that details how the debts will be paid during the plan’s duration.
  3. Creditors’ committee – When a filing occurs, the largest creditors are usually grouped into a committee that will vote on the reorganization plan. If the plan is approved, the parties move forward under it. If it’s not, either the filing party must come up with a new plan, the creditors can come up with their own plan or the filing party can petition the court to ‘cram down’ their plan if it’s reasonable on its face, and the court will rule on it.
  4. Post-plan – When the court ultimately accepts a plan, the debts as constituted prior to the filing are discharged and the petitioner must make the payments proposed in the plan until the time has passed. If the company does not pay under the plan, it opens up several possibilities for enforcement.

How You Should Proceed

If your Arizona business is struggling, it doesn’t necessarily mean that it’s time to shut the doors for good. You could emerge from Arizona bankruptcy just like many other companies have done, but you’ll need the help of an experienced bankruptcy attorney. Contact Phillips & Associates today to schedule an initial consultation.

Article Source: http://EzineArticles.com/?expert=Andrew_Sarski
http://EzineArticles.com/?Chapter-11-Explained&id=2454499

 

 

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The Broken Bank – Choosing Bankruptcy

July 27, 2011 By Leave a Comment

By Joseph Devine -

The majority of American families find themselves in the unpleasant life situation of living from paycheck to paycheck and this makes them incredibly vulnerable to financial collapse in the event of a medical emergency, job loss, or other event that disrupts income or creates a dramatic increase in the level of one’s obligations. Typically, when one enters into debt and establishes repayment agreements with his or her creditors it is with an optimistic view that does not take into account the potential for these problematic occurrences to arise. As a consequence it may become impossible to keep up with the demands of your creditors and filing for bankruptcy protection may offer the best solution.

Though nobody sets out with the intention to fall behind on the repayment of his or her debts, there comes a point when scrambling and struggling to make ends meet causes more harm than it accomplishes good. It can be difficult to determine where that transition takes place, but a continual inability to make minimum payments on time and an abundance of collection calls and letters are some indicators that a substantial change is necessary.

Advantages of Bankruptcy

Even when filing for bankruptcy protection offers the best and swiftest path to the resolution of an overwhelming and unmanageable debt load, many people are still hesitant to file. Part of the reason for this is the longstanding negative public perception and judgment of those people who seek the advantages offered by the provisions of the United States Bankruptcy Code. But there are potentially adverse health effects, devastating and irreversible strains placed on relationships, and other troubling consequences associated with needlessly enduring a high stress debt situation.

Depending on the form of bankruptcy protection that you seek, you will be subject to different requirements and the procedural handling of your case will vary, though effectively all of the options will serve to somehow ease your terms of repayment of debts. Some of the advantages of a filing include:

  • Granting an extended period of time to make payments (Chapter 13)
  • Offering the opportunity to restructure repayment agreements or businesses (Chapters 11/12)
  • Forgiveness and discharge of debts (Chapter 7)
  • Automatic stay of collection efforts and creditor contact (Most chapters)

For More Information

Choosing which form of bankruptcy will be the most beneficial for your situation requires a consultation with a skilled and experienced attorney.

For more information, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

Article Source: http://EzineArticles.com/?expert=Joseph_Devine
http://EzineArticles.com/?The-Broken-Bank—Choosing-Bankruptcy&id=3530846

 

 

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We’ve Moved!

June 2, 2011 By
Our new home is http://blog.nolo.com/bankruptcy/.
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How Does Bankruptcy Work? The Truth Behind Freeing Yourself From the Aggravation of Economic Failure

May 31, 2011 By Leave a Comment

By Deborah B. Hall -

Struggling to keep your finances under control may not be a possibility for many of you during this time of economic stress. For those of you wanting to answer the question “how does a bankruptcy work?”, keep on reading this article.

It’s tough being in a situation where you feel you’re not in control, but how you got into this mess is not as important as learning to get out of it. To find out the best way for you to deal with this type of situation its best for you to have a free consultation with someone who has experience in dealing with circumstances like this.

Because there are currently 3 types of bankruptcy to be filed: Chapter 7, Chapter 11 or Chapter 13. By speaking with a specialist you’ll be able to learn exactly which chapter will be best utilized for your business and / or personal financial situation. Understanding which chapter to file could mean the difference between having your creditors getting part or all of your assets. You may also find yourself lucky enough to be free of your financial burden completely.

Are you still asking yourself how a bankruptcy works? I have to repeat this information to be sure you understand how important it may be to have an idea of what property may be exempt from your creditors. You may not have to lose everything you own and you may actually be able to keep some of the things you value most. The difference between Chapter 7 and Chapter 13 could mean creating a plan to repay your debt or being released from your debt and starting fresh. Please understand you’ll have an easier time dealing with this situation if you are aware of what you’ll be letting go off and the stress of moving forward could be easier to deal with.

Another thing you may not yet understand is that although your financial burden may be eased after you file for bankruptcy, you’ll have to prepare for having this on your credit report for at least 10 years. For most families who prepare for this in advance, this may not be an issue. If you can plan together to support each other during this time then it should be easier to deal with. If you find you’ll have to go bankrupt to survive, I can tell you from personal experience, the time does go by fast and there should be credit options available for you to help rebuild your credit as soon as your bankruptcy is approved and closed.

Hopefully, you now have some answers to how a bankruptcy works. I’m sure you have more to learn so start today by doing some online research. I know bankruptcy is unpleasant and irritating but peace of mind is within your reach.

How You Can Get a Free Consultation
The sooner you file the sooner you can begin rebuilding your credit. CLICK HERE have your questions answered by an expert in the field of bankruptcy. They are my #1 recommendation and since the bankruptcy evaluation is free, you have nothing to lose.

The road to financial freedom and recovery is closer to you than you think.

Article Source: http://EzineArticles.com/?expert=Deborah_B._Hall
http://EzineArticles.com/?How-Does-Bankruptcy-Work?-The-Truth-Behind-Freeing-Yourself-From-the-Aggravation-of-Economic-Failure&id=3865135

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Protection From Garnishment for Social Security, Veterans Benefits

May 12, 2011 By

A new treasury rule, effective May 1, 2011, will provide more protection to receipients of federal benefits from garnishment of their bank accounts.

ManGrabbingPiggyBank_iStock.jpgGarnishment and Federal Benefits: The Basics

If a creditor gets a judgment against you, it has various tools to collect on that judgment. One tool allows the creditor to garnish (grab the money in) your bank account. But there are limits to garnishment. Judgment creditors cannot grab funds that come from certain sources, including some types of federal benefits such as Social Security, Supplemental Security Income, veterans benefits, and a few others.

Although these types of funds cannot be seized by creditors, in practice, when banks got a garnishment order in the past, they often froze all funds in the account (up to the amount of the debt), without regard to whether the funds were protected from garnishment. This means the bank accountholder would not be able to access those funds for weeks or months. The accountholder could object to the garnishment of the protected funds to prevent the bank from turning them over to the judgment creditor. But many people were unable to complete the paperwork and procedure to do so, and so lost funds that never should have been seized.

The New Rule: The Onus is on the Bank

The new rule puts the onus on the banks. Banks receiving garnishment orders must now determine if the bank account has protected federal benefits that have been electronically deposited into the account within the previous two months. If the bank discovers that there are protected funds, it cannot include those funds in the account freeze.

What This Means for Accountholders

Federal benefits received and deposited in a bank account via paper check are not protected by this new rule. Nor are funds received (even if received electronically) more than two months prior to the garnishment order. However, the regular state procedures for challenging a garnishment order will still be available for these types of funds. Federal benefit recipients currently receiving paper checks should consider switching to electronic deposit of their benefits.

For More Information

If you receive federal benefits and think you might need protection from bank garnishments, be sure to read about the nitty, gritty details of this new rule (this post just covers the very basics). For the short term, you can get an excellent summary of the new rule, as well as recommendations for how beneficiaries of federal benefits can best protect themselves, from the National Consumer Law Center at http://shop.consumerlaw.org/pdf/nclc-rpts-repo-jan-feb-2011.pdf.

By Guest Blogger Kathleen Michon

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How and When to Reopen a Bankruptcy Case

April 26, 2011 By

Sometimes people want to reopen a closed bankruptcy case because they failed to invoke important procedures while their bankruptcy case was open.

BankruptcyPetitioniStockPhoto.jpgFortunately it's usually possible to reopen the bankruptcy and play catch-up. Common reasons for wanting to reopen a bankruptcy case include:

  • failing to timely file an Official Form 23 (pre-discharge counseling certification)
  • failing to name an important creditor or list valuable property, or
  • failing to take necessary steps to remove a judgment lien from real estate.

The process for reopening a bankruptcy case involves two steps.

Step One: Ex Parte Motion to Reopen. The first step is what's known as an ex-parte motion to reopen the case. This is a request to the judge that the case be reopened without giving advance notice to the creditors or scheduling a hearing. The paperwork, which consists of the motion or request, and an order granting the request, is pretty simple and widely available, both in Nolo's How to File for Chapter 7 Bankruptcy, by Albin Renauer, Steve Elias, and Robin Leonard, and various bankruptcy lawyer websites.

Step Two: Request for the Desired Action. The second step is to request (by motion and order) that the judge allow the desired action, for instance the removal of a judicial lien on real estate, or the entry of an order of discharge.

The fee for reopening a bankruptcy case is $274, so it's obviously less expensive to get everything done while you case is open. However, if you are trying to remove a lien worth many thousands of dollars, or asking for a discharge an expensive student loan, the fee to reopen the case is relatively unimportant.

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New Mexico Debt Collection Rule Is a Victory for Debtors

April 18, 2011 By

FinalNoticeIStock.jpgNew Mexico's Attorney General will begin enforcing a new Rule which requires debt collectors doing business in New Mexico to (1) make a good faith effort to determine if collection of a debt is time-barred (meaning it is too late to sue for recovery of the debt in court) and (2) if it is time-barred, to so inform the debtor. The collector must also tell the debtor that signing a new agreement to pay the debt, or making a partial payment might "revive" the debt, resetting the time period that the collector has to sue on the debt. (To learn more about time-barred debts, and what that means for collection of the debt, read Nolo's article Time-Barred Debts: When Collectors Cannot Sue You for Unpaid Debts.)

The Attorney General implemented the rule in order to end "an industry-wide [debt collection] practice that tends to or does mislead or deceive" consumers by failing to provide important information to consumers - that is, that a debt is so old that it is legally unenforceable in court. The new Rule is a victory for consumers. As New Mexico Attorney General King said: "This Rule is intended to ensure that debt collectors provide important information to consumers so that they can make informed decisions when they are confronted with a demand to pay an old unenforceable debt."

The law went into effect on December 15, 2010, but the Attorney General delayed enforcement until March 15, 2011 in order to give debt collectors time to revamp their practices. You can read the Attorney General's announcement here. The announcement contains a link to the text of the new rule.

By: Guest Blogger Kathleen Michon 

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Foreclosures Down, But Not for the Right Reasons

April 14, 2011 By

ForeclosureIStock.jpgAccording to RealtyTrac, foreclosures in the first three months of 2011 are trending down as compared to 2010. Foreclosures in January, Februrary, and March of 2011 are down by 27% as compared to foreclosures in the same months of 2010.

Unfortunately, most experts agree that this trend is not due to a healthier economy and housing market, but instead to bank backlogs in the foreclosure process. In 2010/2011 the media called attention to banks' shoddy foreclosure practices (for more on this see Nolo's article False Affidavits in Foreclosures: What the Robo-Signing Mess Means for Homeowners). Courts slapped banks for taking shortcuts on foreclosure paperwork and bypassing procedures meant to protect mortgage holders. Because some banks can no longer ram through foreclosures, a backlog has built, slowing the foreclosure rate.

By: Guest Blogger Kathleen Michon

Filed Under: Court, Foreclosure, News Tagged With: , , , , , ,

Watch Out For the Newest Foreclosure Scam in California

April 12, 2011 By

Scams involving purported mortgage modifications and foreclosure assistance have abounded since the California foreclosure crisis in 2009. The California Department of Real Estate recently warned consumers about the newest version of these scams. (To learn more about foreclosure, check out Nolo's Real Estate & Rental Property area.)

In this scam, a "lawyer" invites homeowners to join a mass joinder or class action against a bank or mortgage company. The "lawyer" promises results such as stopping foreclosures, lowering mortgage payments, lowering principal balances, or eliminating mortgages altogether. "Clients" must pay a nonrefundable fee, often between $3,000 and $9,000 to join the litigation. The litigation is a sham, and the clients receive nothing.

Scammers often solicit victims by mass mail or advertise the "litigation" on the Internet. The solicitations often sound legitimate, and require clients to sign lengthy retainer agreements.

To learn more about this scam, and how to protect yourself, check out the California Department of Real Estate's consumer alert.

by Guest Blogger Kathleen Michon

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Life After Bankruptcy – Starting Over

April 1, 2011 By Leave a Comment

By Joseph Devine -

For better or for worse, many people grow up to be deeply concerned with their reputation and how they are perceived by others. While in principle this seems like it could be a genuinely beneficial trait as it might motivate positive actions and behaviors, in practice it can instead prove to cause significant distress as an individual attempts to create a positive outward impression that is distantly removed from the actual reality of the situation. This is frequently true with regard to a person’s financial circumstances as there is a social pressure to appear successful and at a minimum absolutely responsible with the repayment of debts. In some cases, filing for bankruptcy may be the best option.

Despite the fact that there are instances in which seeking bankruptcy protection offers relief not only from the stress of lingering debts, but also from the anxieties caused by aggressive collection efforts. Frequent and threatening letters and phone calls can take a toll on a person’s emotional health and may adversely affect his or her work life and interpersonal relationships. It is no coincidence that disputes regarding money are one of the most commonly cited causes of marital arguments and dissolutions. Choosing to file for bankruptcy protection can give you the opportunity to begin rebuilding your economic stability instead of continuing to struggle and scramble in the hope that something will improve.

Starting Over, Starting Better

In addition to the social taboo against utilizing the forms of protection afforded by the United States Bankruptcy Code, the immediate and lasting effect that a bankruptcy filing has on a person’s credit score and his or her access to loans and credit also serves as a deterrent to some. This is regrettable, though, because an unmanageable debt load and an ongoing inability to make timely payments can trigger a perpetual condition that has the same consequences as a bankruptcy filing might but without the advantage of having some assistance with the resolution of outstanding debts.

After you have filed for bankruptcy protection, you will be followed by that fact on your credit report for up to 10 years and may struggle to obtain credit, but the same will be true if you are consistently failing to repay your debts. As you begin to rebuild after bankruptcy, the following are some important steps:

  • Adjust your standard of living to fit your new economic reality – if you continue with the same behaviors and habits that led to your bankruptcy filing, you will end up in the same difficult position
  • Pay all of your bills on time, with no exceptions
  • Seek a credit card so that you can aggressively start to rebuild a positive relationship with credit by paying your bill in full each month

The Help You Need

It can be intimidating to seriously wrestle with the issue of filing for bankruptcy or taking other steps to overcome massive debt. For the advice that you need contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

Article Source: http://EzineArticles.com/?expert=Joseph_Devine
http://EzineArticles.com/?Life-After-Bankruptcy—Starting-Over&id=3664325

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