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Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most basic form of bankruptcy filing for individuals and businesses.

In a Chapter 7 bankruptcy, the individual debtor(s) are allowed to keep certain exempt property.  The value of property that can be claimed as exempt varies from state to state.  Un-exempt assets, if any, are sold (liquidated) by the Chapter 7 Trustee and the proceeds are used to repay the debtor(s) creditors.

For most clients, their assets tend to be fully exempt from liquidation by the Trustee.

Most unsecured debts (i.e. credit cards) are discharged upon receipt of a chapter 7 discharge.  This means that your unsecured debt obligations may be discharged (eliminated) without you loosing your home, vehicle, qualified retirement or other assets.

The bankruptcy attorneys at the Law Offices of Anthony B. Vigil, APC are well versed and highly experienced in Chapter 7 bankruptcy filings.  Contact us today to schedule a free consultation to review your financial situation and receive a recommendation from an attorney for a solution to your financial troubles.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is also knows as individual reorganization.  It enables individuals with regular income to develop a plan to repay part or all their debts through the chapter 13 plan.  Similar to chapter 7, it ceases all collection efforts from creditors via the automatic stay under 11 U.S.C. §362. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.

Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure.  By filing a chapter 13 debtors can stop foreclosure proceedings and may cure delinquent mortgage payments over the duration of the chapter 13 plan.   Debtors can also save their vehicles from repossession and cure delinquent vehicle payments via their chapter 13 plan.

Chapter 13 plans are also used avoid "underwater" junior mortgages or other liens, pay back taxes over time, or partially repay general unsecured debt (i.e. credit cards).

The bankruptcy attorneys at the Law Offices of Anthony B. Vigil, APC are well versed and highly experienced in Chapter 13 bankruptcy filings.  Contact us today to schedule a free consultation to review your financial situation and receive a recommendation from an attorney for a solution to your financial troubles.

 “..chapter 13 debtors can stop foreclosure proceedings and may cure delinquent mortgage payments in the chapter 13 plan.”

CHAPTER 11 BANKRUPTCY

Chapter 11 bankruptcy is a form of bankruptcy reorganization available to individuals, corporations and partnerships.  It has no limits as to the amount of debt, as Chapter 13 does.  It is the usual choice for large businesses seeking to restructure their debt.  It is a form of bankruptcy that involves a reorganization of a debtor's business affairs, debts and assets.  Chapter 11 is the most complex of all bankruptcy cases and generally the most expensive.

Chapter 11 is probably the most flexible of all the chapters.  Chapter 11 debtors can renegotiate and adjust certain interest rates, assume or reject executory contracts and unexpired leases, sell property free and clear of lien and interests and extend payment of unsecured tax debt.  Chapter 11 debtors can also cure defaulted or accelerated obligations.  Chapter 11 debtors maintain the benefits of the automatic stay under 11 U.S.C. §362 which serves as an injunction of all lawsuits, foreclosures, repossessions, bank levies, wage garnishments and other collection activities.

The debtor usually remains in possession of its assets, and operates the business under the supervision of the court and for the benefit of creditors. The debtor in possession is a fiduciary for the creditors.  If the debtor's management is ineffective or less than honest, a trustee may be appointed.

A creditors committee is usually appointed by the U.S. Trustee from among the 20 largest unsecured creditors who are not insiders.  The committee represents all of the creditors in providing oversight for the debtor's operations and a body with whom the debtor can negotiate an acceptable plan of reorganization.

A Chapter 11 plan is confirmed only upon the affirmative votes of the creditors, who are divided by the plan into classes based on the characteristics of their claims, and whose votes are a function of the amount of their claim against the debtor.

If the debtor can't get the votes to confirm a plan, the debtor can attempt to "cram down" a plan on creditors and get the plan confirmed despite creditor opposition, by meeting certain statutory tests.

 The bankruptcy attorneys at the Law Offices of Anthony B. Vigil, APC are well versed and highly experienced in Chapter 11 bankruptcy filings.  Contact us today to schedule a free consultation to review your financial situation and receive a recommendation from an attorney for a solution to your financial troubles.

“Chapter 11 debtors can renegotiate and adjust certain interest rates, assume or reject executory contracts and unexpired leases, sell property free and clear of lien and interests and extend payment of unsecured tax debt.”