Especially in today’s economic climate, many people and businesses have fallen on hard times and bankruptcy may be their only option. At Kan & Clark, LLP, our bankruptcy attorneys represent clients in Chapter 7, Chapter 11 and Chapter 13 Bankruptcy filings.

Whether your financial problems stem from credit card debt, medical bills, housing expenses or other financial woes, we will advise you as to whether bankruptcy is your best option and which type of bankruptcy is right for you. If bankruptcy is your best option, one of our bankruptcy attorneys will help you through the process from start to finish. We understand that going through bankruptcy is the last thing you want, but we will give your case the personal attention it deserves and make every effort to ensure that the process is as painless as possible. The rules in Bankruptcy Court are very technical and your case may be dismissed if you miss any of the requirements. Therefore, it is important to have an advocate on your side when going through bankruptcy. If you are facing a situation where you think bankruptcy is an option, contact us immediately for a free initial consultation. We serve the Atlanta area as well as the surrounding metro counties, including Cobb, Dekalb, Gwinnett, and Fulton.

Chapter 7 Bankruptcy The three most commonly filed bankruptcies are chapter 7, chapter 13 and chapter 11. The most powerful rule in bankruptcy is the Automatic Stay which goes into effect immediately upon filing a case with the court. The Automatic Stay prohibits creditor harassment, wage garnishment, law suits, foreclosures and repossessions upon filing. However, exceptions to the Stay exist for certain repeat filers.Ch. 7 Bankruptcy Common Questions A Chapter 7 bankruptcy provides for liquidation of assets to be distributed to creditors. The court appointed representative of the estate, otherwise known as the Trustee is designated to each Chapter 7 case upon filing the petition with the court. The Trustee liquidates the Debtor(s) non-exempt property to cash and distributes the proceeds to creditors according to the Code’s rules. In many cases, the Chapter 7 case will be a “No Asset” case and creditors will not receive anything after the debtor(s) exemptions. Pending no objections to dischargeability from creditors, the debtor(s) is discharged from liability for most unsecured debts. Certain debts are non-dischargeable such as:

• Debts for most taxes
• Debts incurred to pay nondischargeable taxes
• Student loan debt
• Domestic support obligations
• Debts for most fines, penalties, forfeitures or criminal obligations
• Debts for personal injuries or death caused by the debtor’s operation of a motor vehicle while intoxicated
• Debts which are not properly listed by the debtor
• Debts for which the debtor has given up the discharge protection by signing a reaffirmation agreement in compliance with the Bankruptcy Code
• Debts owed to certain retirement plans
• Debts that the bankruptcy court has ruled in this case are not discharged

A Chapter 7 “No Asset” bankruptcy generally takes about 90 days to complete. Once the case is filed, the court will generate a 341 Meeting of Creditors date to take place approximately 30 days from the file date. This is a mandatory meeting that is overseen by the Trustee. The creditors also have the opportunity to appear and inquire about debt incurred. The debtor(s) must then take the Financial Management Course or post-bankruptcy class within 45 days of the 341 meeting. The course is required for discharge and if not timely filed, the case will be closed without a discharge. If the Trustee determines the case to be a “No Asset” case, a Report of No Distribution will be filed. Once the deadline for objection to dischargeability has expired, the court will issue an Order of discharge and final decree. The case is then closed. If you are facing a situation where you think bankruptcy is an option, contact us immediately for a free initial consultation. We serve the Atlanta area as well as the surrounding metro counties, including Cobb, Dekalb, Gwinnett, and Fulton.

Chapter 13 Bankruptcy A chapter 13 bankruptcy is a court approved payment plan that allows a debtor to retain their property, and pay back all or a portion of their debts over a period of time. Under Chapter 13, debtors propose a plan to make monthly installment payments to creditors over a period of three to five years. Chapter 13 bankruptcy is also known as the wage earner’s plan since it enables individuals with regular income to develop a plan for repaying at least a percentage of their debts.Ch. 13 Bankruptcy Common Questions A Chapter 13 bankruptcy is most appropriate for a debtor with income but does not have the ability to pay all of their debts in full. The repayment period depends on the debtor’s average income. Generally, payments under the plan are lower than what the debtor would pay without the bankruptcy process. Contrary to what you may have heard, you do not need to be unemployed to file for bankruptcy. Particularly in the case of a Chapter 13 bankruptcy, a debtor must have income to be eligible. You may have also heard that filing under Chapter 13 requires a debtor to repay all debts in full. This is generally not the case. Although there are certain debts which must be paid in full, unsecured debts are rarely fully paid. Additionally, filing for bankruptcy under any chapter, including Chapter 13, does not permanently ruin your credit, nor does it permanently deny you the ability to obtain credit in the future. Some people are able to obtain credit while in their Chapter 13 plan. Indeed, after the Chapter 13 plan has run its course, many credit card companies who were unsecured creditors in the plan, invite the debtor to apply for credit cards. Most importantly, it is important to bear in mind that filing for bankruptcy, including one under Chapter 13, does not imply a personal failure of the debtor. Most people file for bankruptcy because circumstances that they cannot control have caused their debts to become unmanageable. Remember, bankruptcy is a legal process and an individual right under federal law.As mentioned above, an individual must have income to file for bankruptcy under Chapter 13. Additionally, under current law, unsecured debts of the debtor must be less than $336,900.00; and secured debts less than $1,010,650.00. There are also certain conditions prohibiting a debtor from filing a Chapter 13 bankruptcy if a previous petition had recently been dismissed. If the debtor is eligible to file for bankruptcy under Chapter 13, they must first attend a credit counseling course by an approved agency before filing the bankruptcy petition with the bankruptcy court. Once the petition is filed, an impartial trustee is appointed to administer the case. As soon as the bankruptcy petition is filed, a procedure known as an automatic stay goes into effect. This immediately stops collection efforts against the debtor, the debtor’s property, and in the case of a Chapter 13 bankruptcy also applies to collection actions against third parties for consumer debts. The court gives notice to all creditors that a bankruptcy has been filed, and twenty to fifty days after filing the trustee will hold a meeting of creditors. At this meeting, the trustee and creditors inquire about the debtor’s financial affairs and the debtor’s proposed plan for repayment. No later than forty-five days after the meeting of creditors, there is a hearing before a Judge to confirm the proposed plan. If the plan is confirmed, the trustee will start distributing funds pursuant to the plan; if it is not confirmed, then the plan is modified, or the debtor may have the option of converting their bankruptcy to one under Chapter 7 of the bankruptcy code. If you are facing a situation where you think bankruptcy is an option, contact us immediately for a free initial consultation. We serve the Atlanta area as well as the surrounding metro counties, including Cobb, Dekalb, Gwinnett, and Fulton.

Chapter 11 Bankruptcy Chapter 11 Bankruptcy is designed for businesses and high net assets cases.Ch. 11 Bankruptcy Common Questions The goal of a Chapter 11 Bankruptcy is to help the debtor “reorganize” their debt to keep the business operational or to keep the personal assets intact. Chapter 11 Bankruptcy is not a guarantee of success but rather an opportunity for the business or individual to try negotiate the orderly repayment of their debts.An individual Chapter 11 Bankruptcy usually falls into two categories. An individual who has just enough assets to disqualify them from a Chapter 13 Bankruptcy may convert that case to a regular Chapter 11 filing. A “mini” Chapter 11 bankruptcy is best described as a Debtor who owns an asset (usually a house) that exceeds the Chapter 13 secured debt limit of $1,010,650.00 or the unsecured debt limit of $336,900.00. The high debt prevents a Chapter 13 Bankruptcy plan approval, so the debtor must file for a Chapter 11 even though their overall goal of a payment plan is similar to the Chapter 13.  In a regular Chapter 11 Bankruptcy, the Debtor uses the reprieve from creditors to reorganize their debts into a healthier and reasonable payment plan.

It is best to consult with an attorney to see if your situation requires a Chapter 11 Bankruptcy. In a Chapter 11 bankruptcy, it is difficult to predict precisely how long it may take to get because of the complexity of formulating the reorganization plan. The reorganization plan needs to be accepted by all the creditors as well as the trustee before it gets implemented. Depending the size and the complexity of the bankruptcy and the assets involved, debtors may come out of the bankruptcy within a few months, or it may take several years. The reason for the time discrepancies is because, at first, debtors have the exclusive right of proposing a plan within 120 days of the filing. After a certain amount of time, the creditors are then allowed to propose their plans for reorganization. The reorganization plan, whatever is chosen, needs to be confirmed by the bankruptcy court. The creditors then need to vote and approve the plan. If the plan is confirmed, then the debtor follows the repayment plan until the debt is completely paid. If the plan is not confirmed then the court looks to other options for the debtor. Some options include converting the Chapter 11 into a Chapter 7 and liquidating the assets. Or in some cases, dismissing the case, and returning the debtor back to whatever their status was before the bankruptcy. Therefore, the timeline is definitely different with each case depending on the assets involved and the difficulty. If you are facing a situation where you think bankruptcy is an option, contact us immediately for a free initial consultation. We serve the Atlanta area as well as the surrounding metro counties, including Cobb, Dekalb, Gwinnett, and Fulton.