Overview of Bankruptcy Law

Chapter 7 Liquidation Bankruptcy
Chapter 11 Reorganization
Chapter 13 Bankruptcy
Benefits of the Automatic Stay
Fees and Costs
What to bring to the initial free consultation
How to contact our firm for an appointment
Form to bring to your first consultation

What is bankruptcy?

            Bankruptcy is a process provided by U. S. Statutes that permits a person or business to eliminate certain debts, or to require creditors to accept a payment plan.  The most common types of bankruptcy are:

Chapter 7 Liquidation Bankruptcy
            In a "Chapter 7" bankruptcy, your debts and property are listed on forms, along with the list of exempt property that the State of your residence or the Federal Laws permit you to keep after your discharge of debts.  Most debts are discharged, meaning you are no longer obligated to pay them.  An appointed trustee will take any non-exempt property and distribute it to creditors.  Often, there will be no non-exempt property, but you will have to repay secured debts or release the security, (such as a home or  automobile,) to the creditor.  Any balance owed on the secured debt will still be discharged, however, even if you surrender the security.  Taxes cannot typically be discharged in bankrupty, but the government may be forced to accept a payment plan under some circumstances, as described below.

Chapter 11 Reorganization
            Chapter 11 permits an operating business, whether a sole proprietorship or a partnership or corporate entity, to prevent its creditors from suing or otherwise disrupting its business while it proposes a plan of reorganization.  The high cost of legal fees and accounting fees required to successfully file and confirm a plan of reorganization usually limit this form of relief to businesses with a solid income and large amounts of debt that need to be restructured.

Chapter 13 Bankruptcy
            A Chapter 13 is similar to a Chapter 11 bankruptcy, in that the Debtor must propose a plan to repay creditors that meets the standards of the law.  Chapter 13's are overseen by a standing Trustee.  The Debtor must pay the Trustee's fees in addition to the Debtor's own legal fees and payments to Creditors.  There are monetary limits on who can file a Chapter 13.  Only individuals can file a Chapter 13, it is unavailable to corporate entities and partnerships.  Chapter 13 debtors are also permitted to keep their exempt property so long as they comply with the terms of their plan, and may be able to restructure some secured debts.  Taxes can be included as part of the Plan as well.

Benefits of the Automatic Stay
            One of the great benefits of filing Bankruptcy is the automatic stay, which goes into effect the moment the petition is filed, and is intended to stop all litigation and collection tactics immediately, so as to put all creditors on an even footing and give the Debtor breathing room.  If a creditor violates the stay, they may be sanctioned by the Bankruptcy Court upon the filing of a motion by the Debtor's attorney.  As a practical matter, Creditors will usually stop all contact immediately when they confirm that a petition in Chapter 7, 11 or 13 is filed.  If you receive any contact whatsoever from creditors after filing, notify us immediately.
Fees and Costs

            Bankruptcy fees and costs vary widely.  Our firm offers a free initial consultation for potential Bankruptcy clients.  If you bring an accurate description of your debts and property, with approximate values, to your initial conference, you will leave with a good approximation of what your bankruptcy will cost, what to expect during your case, and whether bankruptcy is right for you.  Remember that previous filings and/or dismissals of bankruptcy cases may affect your ability to file a new case, so be sure to disclose them to us.

What to bring to the initial free consultation
            You should take time to make a comprehensive list of all your creditors and your debts, with accurate amounts for each.  Be sure to indicate which are secured debts, listing them separately and indicating what property secures the debt, such as your home, automobiles or furniture, etc.  A  basic list of your property, with approximate values, is also needed to evaluate your situation and what property can be exempted and kept after bankruptcy.  You will fill out a comprehensive questionnaire when you arrive at the office, so that we can evaluate your situation accurately and give you useful advice.  Please come prepared, since you will have to pay a fee if a second conference is required.  If you have tax claims, lawsuits pending or other urgent issues, please bring all relevant paperwork regarding these matters with you.  For your convenience, we have provided a form Download Bankruptcy Document (PDF) for you to fill out, print and bring to the initial consultation.

Contact Us

You can make an appointment for your initial free consultation by calling us, or by emailing us at frontdesk@borlandlaw.com

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