Our attorneys will assist in the selection of the appropriate bankruptcy chapter, help you identify and protect assets and utilize exemptions to maximize the benefit and outcome of your case.
Bankruptcy cases are traditionally identified by the chapters that describe them.
A Chapter 5 permits business debtors and certain individuals with debts below $2.75 million to reorganize their obligations under Chapter 11 without needing to obtain consent from a class of “impaired” debtors, as required under basic Chapter 11. It also relaxes some of the rules for administration so certain debtors may benefit.
A Chapter 7 is a liquidation of the non-exempt assets of the debtor’s estate, which is supervised by the bankruptcy court. A Trustee is appointed by the bankruptcy court to:
- Take possession of any non-exempt assets of the debtor’s estate,
- Reduce the non-exempt assets to cash, and
- Make distributions to creditors.
This liquidation process is subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. In most Chapter 7 cases, there is little or no nonexempt property and there is no actual liquidation of the debtor’s assets.
A Chapter 13 is designed for an individual debtor who has a regular source of income and valuable assets, which the debtor desires to retain.
A Chapter 13 allows a debtor to:
- Keep assets; and
- Repay creditors over time.
Debtors who do not qualify for Chapter 7 relief as a result of the means test, must pay all of their disposable income into the Chapter 13 plan (typically five (5) years).
The debtor must complete the payments required under the plan before receiving a discharge. However, during the plan a debtor is protected from all collection efforts and other creditor actions.
A Chapter 11, is a reorganization of debts by a corporation or individual who desires to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization.
A Chapter 11 requires the debtor to:
- File a plan of reorganization; and
- Must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan.
The court ultimately confirms or denies confirmation of the plan of reorganization.
The purpose of a Chapter 11, is to allow the debtor to go through a period of consolidation and emerge with a reduced debt load and a reorganized business.
Our attorneys will work with you to identify and evaluate the benefits of each chapter to determine which is the most beneficial to you given your current financial situation.
Our attorneys are well versed in the bankruptcy litigation practice whether it is prosecuting or defending complaints to determine dischargeability, challenging the discharge debts or handling other adversary complaints.
In some cases, the filing of the bankruptcy petition can result in additional litigation to determine whether a debtor’s bankruptcy case should be dismissed without a discharge or whether a specific creditor’s debt should be determined to be non-dischargeable. If successful, both of these types of cases can have far reaching implications for the debtors involved. Recognizing the facts required to successfully prosecute a complaint to determine dischargeability or defending against such a complaint is complicated. As litigation attorneys, we have both a wealth of trial experience and have prosecuted and defended such actions in the bankruptcy context.
Bankruptcy cases also spin off other types of litigation. Our attorneys are well versed in defending fraudulent transfer and preference actions. A fraudulent transfer is the transfer of an asset made by a debtor in an attempt to avoid a creditor’s collection efforts. A preference action is initiated by a trustee of a bankruptcy estate or a debtor in possession and is brought in an effort to recover payments made by the debtor to a creditor prior to the filing of the bankruptcy petition. In certain instances, payments made to creditors for antecedent debts within 90 days of filing bankruptcy are considered preferences. If the creditor is also an insider, the relevant preferential period extends to one year. If the amount of the preferential payment received by the creditor exceeds the amount a creditor would have received in a liquidation of the debtor’s bankruptcy estate, the creditor may have to disgorge the amount of the preferential payment for the benefit of all of the debtor’s creditors.
Our attorneys also have experience modifying and stripping liens in both Chapter 7 and 13 cases which require the filing of adversary complaints in some instances. Being experienced bankruptcy litigators allows our attorneys to handle the simple cases as well as those that are multifaceted.
Our attorneys can protect your rights as a creditor in a bankruptcy case by obtaining relief from the automatic stay, filing a proof of claim or monitoring bankruptcy cases for creditors seeking distribution from a bankruptcy estate.
The threat of bankruptcy is regularly used as leverage during negotiations with creditors. We can evaluate the legitimacy of those bankruptcy threats to provide you with an ability to calculate the likelihood of filing and the practical outcome if there is a bankruptcy filing. Having the ability to effectively refute the perceived threat of bankruptcy will certainly strengthen your position in negotiations.
Understanding your rights as a creditor once a bankruptcy has been filed can be overwhelming. Our attorneys can guide creditors through the bankruptcy proceedings whether as a secured or unsecured creditor. Evaluating the appropriate steps in protecting your rights as a creditor in a bankruptcy case must be conducted simultaneously with an analysis of the cost. With the ever present threat of a discharge of your claims, a creditor must be weary of spending resources which will not result in a positive return. A comprehensive understanding of the bankruptcy practice allows us to provide you with quality representation for a fraction of the costs of larger firms.
Our attorneys can simplify and explain the complex bankruptcy litigation practice whether you need someone to:
- Obtain a cash collateral order;
- Object to plan confirmation;
- Obtain relief from the automatic stay;
- Defend fraudulent conveyance and preference actions; or
- File a proof of claim.
Our goal is to maximize the value of your dollar while effectively protecting your rights.
Contact Allred, Bacon, Halfhill & Young, PC For More Information
In an effort to support the best interests of our clients, we offer competitive fees. Call 703-352-1300 or contact our firm to learn more about how our Fairfax business law lawyers will personally tailor our services to your needs.
Debt Relief Agency
The attorneys at Allred, Bacon, Halfhill & Young, PC, provide bankruptcy services to consumers and federal law requires that they be identified as a Debt Relief Agency. Our attorneys help people file bankruptcy in Virginia under the United States Bankruptcy Code.