Bankruptcy

Helping Individuals and Businesses Obtain a Fresh Start through Chapter 7

Chapter 7 is the most commonly filed type of consumer bankruptcy, and it is also available to businesses that wish to wrap up their operations. Also known as a “liquidation bankruptcy,” Chapter 7 involves the liquidation of a debtor’s nonexempt assets in order to pay back creditors. Importantly, the Bankruptcy Code provides generous exemptions for a variety of categories of assets, including real estate, vehicles, personal property, cash, and others. In fact, the majority of Chapter 7 bankruptcies are zero-asset bankruptcies, which means that all of a filer’s assets are covered by the exemptions.

Perhaps the most important aspect of Chapter 7 bankruptcy for individuals is the fact that most debts can be discharged upon the conclusion of the case. When a debt is discharged, it means that you are no longer under any legal obligation to pay it back. In this way, Chapter 7 can provide consumers and business owners with a fresh financial start. Examples of debts that are often discharged in Chapter 7 bankruptcy include:

• Credit card debts
• Utility bills
• Past-due Rent
• Medical debts
• Civil judgments
• Certain tax debts
• Personal loans

There are also some debts that cannot be discharged in Chapter 7. In addition, in many cases, when you file is just as important as if you file. At Cole and Coon, we will thoroughly review the facts of your case to determine whether you can benefit from filing for Chapter 7 and, if so, a filing timeline that would benefit you most in light of your current situation.

Helping Businesses and individuals Reorganize or Liquidate

Historically Chapter 11 was thought of a business reorganization; however, it, has become available to both individuals and businesses and allows for either reorganization or liquidation of assets. Chapter 11 can allow businesses to continue operating while they pay their creditors over the term of a repayment plan which can be over a number of years. As with the other Chapters, in Chapter 11 the automatic applies. Chapter 11 also provides a platform for the sale of some or all of the assets of a company.

Like Chapter 7 a business can liquidate in Chapter 11 with the primary difference being the Debtor controls the liquidation. Individuals who file Chapter 11 often do so because their debts or income do not allow them to avail themselves of one of the other Chapters.

Recently Congress enacted sub-chapter 5 with the hope reducing costs and a case takes reach confirmation of a plan. Chapter 11 is often used in real estate case as well as small, medium and large companies.

Chapter 11 also provides protections for creditors including lenders, vendors, secured creditors and landlords. Like Chapter 7, under certain circumstances creditors can force a debtor into Chapter 11 by filing an involuntary case.

Coon & Cole has some of the most experienced Chapter 11 lawyers in Maryland and can assist both debtors and creditors in just about any issue in Chapter 11 from filing a debtors case to taking actions to protect a creditors interest.

Chapter 12 bankruptcy is available to small family farmers or fisheries that are experiencing financial problems. Similar to a Chapters 11 and 13, it allows debtors to reorganize their debts and halt collection activities for the term of the repayment plan.  Chapter 12 also makes it easier for the debtor to sell its assets over the objection of the secured creditor.

Chapter 13 Bankruptcy Representation and Counsel

In some cases, a debtor may not be eligible for Chapter 7 or would like to avoid the liquidation of his or her assets. Chapter 13 is a type of reorganization bankruptcy that is available to individuals only. In a Chapter 13, a debtor enters into a repayment plan that lasts three to five years. While the debtor is 'in' Chapter 13, his or her creditors are prohibited from taking any collection actions in order to recover debts. Prohibited collection activities include:

• Phone calls
• Collection letters
• Wage garnishment
• Repossession of assets
• Foreclosure
• Collection actions

In some cases, Chapter 13 bankruptcy can be used to prevent foreclosure on a debtor’s home. While Chapter 13 does not suspend mortgage payments, it can place the arrearage on your mortgage into repayment through the Chapter 13 repayment plan, giving you three to five years to get caught up. Provided that you can stay current on your payments moving forward, in this way, Chapter 13 can prevent foreclosure.

While much of our practice is devoted to helping individuals and businesses find relief through bankruptcy, we also understand that creditors have rights. We regularly work as outside counsel for lenders and other creditors that have interests in bankruptcy proceedings and are qualified to help them obtain as much recovery as possible.

We vigorously represent landlords, banks and all other types of creditors.