Creditor Representation Across a Diverse Range of Bankruptcy Matters
The bankruptcy attorneys at Gilbert Garcia Group are not only experienced bankruptcy litigators; we’re actively involved in the bankruptcy legal community. Our bankruptcy lawyers are involved in the local, state and national dialogue among trustees, judges and the debtor bar about effective ways to manage claims itemization, affidavits in support of motions for relief, and loss mitigation during bankruptcy.
Gilbert Garcia Group represents creditors involved in various types of bankruptcy proceedings, as we discuss below. Our bankruptcy legal team provides support across a range of bankruptcy services, including representation of creditors regarding proofs of claims, motions for relief from stay, cram downs, valuations, plan reviews, and other relief such as serial filer. If you are in need of representation or advice for a bankruptcy proceeding in which your finances, assets, or interests are affected, our seasoned attorneys are ready to assist.
Chapter 7 – Liquidation
Chapter 7 is one of the two main avenues for individual debtor bankruptcy. Chapter 7 bankruptcy is available for debtors whose income is below a certain threshold, or whose disposable income after accounting for household costs, medical bills, and other expenses falls below the relevant threshold. Chapter 7 is generally limited to unsecured debts, meaning debts that are not secured by collateral. Certain types of debt are generally or entirely excluded, such as student loans, tax debt, court fines, and family law obligations (alimony, child support).
In a Chapter 7 proceeding, certain nonexempt liquid assets belonging to the debtor will be turned over to the court and sold in order to pay as much of the covered debt as possible. Whatever debt remains after liquidation will be discharged, meaning the debtor will no longer be liable.
Lenders are rightfully wary of Chapter 7 bankruptcies, as they often leave creditors with little or no repayment of outstanding debt. Creditors may object to the inclusion of their debt in the bankruptcy proceedings, and, with help from a seasoned bankruptcy lawyer, can seek to raise their priority in the distribution of liquidated assets. A Chapter 7 bankruptcy filing automatically halts all collection proceedings, but creditors may be able to lift the “automatic stay” in order to pursue collection actions regarding certain assets, such as mortgages, that are not subject to the Chapter 7 proceeding.
Chapter 9 – Adjustment of Debts of a Municipality
Chapter 9 bankruptcy provides a means for financially distressed municipalities to obtain protection from creditors by hashing out a plan with creditors to resolve outstanding debt. Liquidation of assets is nearly impossible in a Chapter 9 proceeding. Instead, Chapter 9 operates more like Chapter 13, or even a loan modification: The municipality negotiates a repayment plan that may involve reducing interest rates, reducing monthly premiums, adjusting the term and timeline for repayment, or reducing the principal amount owed.
Chapter 11 – Reorganization
Chapter 11 bankruptcy involves the reorganization of a debtor’s debts, business affairs, and assets. Chapter 11 is available to large and small businesses, as well as individuals (though Chapter 7 and Chapter 13 are significantly more common for individuals). In a Chapter 11 proceeding, the debtor comes up with a reorganization plan, essentially amounting to a contract between the debtor and creditors elucidating how the business will continue to operate and pay its financial obligations. Typically, Chapter 11 involves downsizing the business to some extent in order to free up sufficient assets to pay some or all of the covered debt. Filing for Chapter 11, like other forms of bankruptcy, will trigger the court to issue an automatic stay on all collection proceedings.
Unlike Chapter 7 or Chapter 13 bankruptcies, in a Chapter 11 bankruptcy, the creditors must vote in favor of the bankruptcy in order for the court to approve. If the creditors reject the plan, the debtor can seek a “cram down,” which would force the creditors to accept. Creditors with a vested interest in the debtor’s assets must, with the advice of savvy bankruptcy counsel, evaluate whether to accept the plan as offered or reject the plan and chance a less favorable bankruptcy down the line.
Chapter 12 – Family Farms and Fishing Businesses
Chapter 12 is limited to small family farms and fishing operations in the agriculture or aquaculture industries. Chapter 12 operates similarly to Chapter 13, with creditors and debtors agreeing on a three-year or five-year repayment plan and adjustment of debts. Family-owned partnerships or closely-held corporations that qualify often prefer Chapter 12 to Chapter 11 as it is less expensive and complex, and qualifying individuals and spouses often prefer Chapter 12 to Chapter 13 as it adds more flexibility in payment plans to account for the seasonal nature of the debtor’s income.
Chapter 12 proceedings include the section 341 meeting of creditors, and creditors can take an active role in protecting their interests in a Chapter 12 bankruptcy, including examining the debtor and posing objections to a proposed plan.
Chapter 13 – Adjustment of Debts of an Individual with Regular Income
Chapter 7 and Chapter 13 together make up the bulk of individual bankruptcy filings. While Chapter 7 involves the collection of non-exempt assets for sale by a bankruptcy trustee, Chapter 13 instead involves crafting a three to five-year repayment plan by which an individual debtor can repay as much of their debt as possible. Assets do not need to be liquidated in Chapter 13. At the end of the repayment period, any covered debt that remains will be discharged.
Chapter 13 is reserved for debtors with regular income who would be able to repay part or all of their covered debt should they be given a reduced payment obligation. There are limits to the total amount of secured and unsecured debt a debtor may owe to qualify for Chapter 13. Creditors may object to the payment plan, and there are means to pursue collection activities toward certain secured assets, such as homes subject to a defaulted mortgage.
Chapter 15 – Ancillary and Other Cross-Border Cases
Chapter 15 bankruptcy permits foreign debtors to file for bankruptcy in the United States. The section is reserved for insolvency cases involving debtors with assets both within and outside the country. Chapter 15 bankruptcies involve complex, cross-border considerations and require the steady hand of a seasoned Florida bankruptcy lawyer.
If you are a business owner with assets in multiple countries and you are seeking to file for bankruptcy, make sure you have counsel well-versed in state, federal, and international law. Likewise, if you are a mortgagor, lender, or other creditor subject to a Chapter 15 bankruptcy, it’s vital to secure bankruptcy counsel who knows how to properly protect your interests throughout this more obscure bankruptcy proceeding.
Seasoned Bankruptcy Attorneys Protecting Your Valued Interests
The dedicated, detailed, and effective bankruptcy lawyers at Gilbert Garcia Group are ready to protect your financial interests in a pending or anticipated Florida bankruptcy proceeding. Call one of our experienced bankruptcy today to discuss your matter. Contact Gilbert Garcia Group, P.A. to learn more about how we assist individuals, business owners, and creditors across Florida with bankruptcy and bankruptcy-related issues.