Bankruptcy

• Chapter 7

  Chapter 7 bankruptcy is also known as a liquidation bankruptcy.  It involves the sale of the debtor´s non-exempt property and the distribution of those proceeds to the debtor´s creditors.  Property that is classified as “exempt” is protected from creditors and remains in the possession of the debtor.  Other “non-exempt” property (if there is any) will be liquidated, with the proceeds then going to creditors.  Chapter 7 is the most common form of bankruptcy that is filed by individual consumers.  It does not involve filing a repayment plan, as is done in a Chapter 13 bankruptcy.Atlantis Law will explain the ins and outs of Chapter 7 to you and make sure that you have a full understanding of what filing for Chapter 7 means for you and your property.  Whether you are a single individual or a married couple, we will help determine if you are eligible for Chapter 7, and if so, if filing would be the best decision for you and your unique situation.  Normally, a Chapter 7 bankruptcy will be discharged 3-4 months after the filing.

• Chapter 13

  Chapter 13 bankruptcy is also known as a reorganization bankruptcy and involves filing a repayment plan to pay back all or part of your debt.  The repayment plan will be based on your monthly income.  In filing this plan, the debtor is able to keep their property while making affordable monthly payments over a 3 to 5 year period.  If you are eligible to file for Chapter 13, Atlantis Law will work with you to create an effective, affordable and advantageous repayment plan.  Your payments will be made to the Court trustee, who will then distribute them to your creditors.  We will make the process simple and efficient for you and guide you through the process.Chapter 13 has several advantages over a Chapter 7 bankruptcy, such as saving your home from foreclosure.  Chapter 13 also allows the debtor to reschedule their secured debt so that they may be repaid over the life of the bankruptcy payment plan, which may help lower monthly payments.  In filing a Chapter 13, think of the repayment plan as a consolidation of all of your loans, where all you have to do is make one monthly payment to the Court trustee-you won´t have to deal with your individual creditors directly, saving you time and stress.  The biggest advantage with a Chapter 13 is that you may be able to strip any junior liens against your real property.  If your house is underwater (valued less than what is owed on it), Atlantis Law can help you file a lien strip motion, where the security may be “stripped” away from your second or third mortgages.  The result is that when your Chapter 13 bankruptcy is finally discharged, those junior liens will no longer be recorded against your real property.
  Atlantis Law will help determine if you are eligible for a Chapter 13 bankruptcy. Since a Chapter 13 bankruptcy is complicated and is a 3-5 year commitment, we will guide you through the process and create a repayment plan that you will be comfortable with.

• Chapter 11

  Chapter 11 bankruptcy is another type of reorganization bankruptcy.  It is typically used by corporations or partnerships who wish to keep operating (under the oversight of the court) while repaying their debt over time.  In certain rare cases, an individual may file Chapter 11 bankruptcy if their debts exceed the limits allowable for Chapter 13 bankruptcy.  Chapter 11 is highly complex and complicated, and Atlantis Law will help you determine if it is the best course of action for you. 

Sometimes, filing for Chapter 7 or 13 bankruptcy may not be the solution.  You may be uncomfortable with filing for bankruptcy, or it might not be the best financial answer for your particular situation.  There are several other alternatives to bankruptcy, and Atlantis Law will determine which options works best for you.

Debt Settlement: The process of debt settlement involves negotiating directly with your creditors in order to reach a settlement agreement.  Often, this agreement will be for an amount substantially less than the total debt owed.  The settlement agreement may be paid off in one lump sum or over a monthly payment plan.  Your creditors may be difficult to deal with so Atlantis Law will negotiate firmly on your behalf to reach the lowest settlement agreement possible.  We are experienced negotiators and use expert tactics to negotiate aggressively on your behalf.  Our attorney negotiators have repeatedly settled outstanding debts for well below the balance due.

Debt Consolidation:  Debt consolidation involves borrowing enough funds from a lender, (usually a bank) at a low interest rate, to pay off higher interest rate debts.  Consolidating your debts enables you to replace making many payments to many different creditors, with making one monthly payment to just one creditor.

• 341 meeting: The meeting of creditors required by section 341 of the Bankruptcy Code at which the debtor is questioned under oath by creditors, a trustee, examiner, or the U.S. trustee about his/her financial affairs. Also called creditors’ meeting.
• adversary proceeding: A lawsuit arising in or related to a bankruptcy case that is commenced by filing a complaint with the court.
• automatic stay: An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
• bankruptcy administrator: An officer of the judiciary serving in the judicial districts of Alabama and North Carolina who, like the U.S. trustee, is responsible for supervising the administration of bankruptcy cases, estates, and trustees; monitoring plans and disclosure statements; monitoring creditors’ committees; monitoring fee applications; and performing other statutory duties. Compare U.S. trustee.
• bankruptcy court: The bankruptcy judges in regular active service in each district; a unit of the district court.
• bankruptcy estate: All legal or equitable interests of the debtor in property at the time of the bankruptcy filing. (The estate includes all property in which the debtor has an interest, even if it is owned or held by another person.)
• bankruptcy judge: A judicial officer of the United States district court who is the court official with decision-making power over federal bankruptcy cases.
• bankruptcy petition: The document filed by the debtor (in a voluntary case) or by creditors (in an involuntary case) by which opens the bankruptcy case. (There are official forms for bankruptcy petitions.)
• chapter 7: The chapter of the Bankruptcy Code providing for “liquidation,”(i.e., the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.)
• chapter 11: The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)
• chapter 13: The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)
• confirmation: Bankruptcy judges’s approval of a plan of reorganization or liquidation in chapter 11, or payment plan in chapter 12 or 13.
• consumer debtor: A debtor whose debts are primarily consumer debts.
• consumer debts: Debts incurred for personal, as opposed to business, needs.
• creditor
• One to whom the debtor owes money or who claims to be owed money by the debtor.
• credit counseling: Generally refers to two events in individual bankruptcy cases: (1) the “individual or group briefing” from a nonprofit budget and credit counseling agency that individual debtors must attend prior to filing under any chapter of the Bankruptcy Code; and (2) the “instructional course in personal financial management” in chapters 7 and 13 that an individual debtor must complete before a discharge is entered. There are exceptions to both requirements for certain categories of debtors, exigent circumstances, or if the U.S. trustee or bankruptcy administrator have determined that there are insufficient approved credit counseling agencies available to provide the necessary counseling.
• current monthly income: The average monthly income received by the debtor over the six calendar months before commencement of the bankruptcy case, including regular contributions to household expenses from nondebtors and income from the debtor’s spouse if the petition is a joint petition, but not including social security income and certain other payments made because the debtor is the victim of certain crimes. 11 U.S.C. § 101(10A).
• debtor: A person who has filed a petition for relief under the Bankruptcy Code.
• Discharge: A release of a debtor from personal liability for certain dischargeable debts set forth in the Bankruptcy Code. (A discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents the creditors owed those debts from taking any action against the debtor to collect the debts. The discharge also prohibits creditors from communicating with the debtor regarding the debt, including telephone calls, letters, and personal contact.)
• dischargeable debt: A debt for which the Bankruptcy Code allows the debtor’s personal liability to be eliminated.
• exemptions, exempt property: Certain property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors. For example, in some states the debtor may be able to exempt all or a portion of the equity in the debtor’s primary residence (homestead exemption), or some or all “tools of the trade” used by the debtor to make a living (i.e., auto tools for an auto mechanic or dental tools for a dentist). The availability and amount of property the debtor may exempt depends on the state the debtor lives in.
• joint petition: One bankruptcy petition filed by a husband and wife together.
• Lien: The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.
• Liquidation: A sale of a debtor’s property with the proceeds to be used for the benefit of creditors.
• nondischargeable debt: A debt that cannot be eliminated in bankruptcy. Examples include a home mortgage, debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime. Some debts, such as debts for money or property obtained by false pretenses and debts for fraud or defalcation while acting in a fiduciary capacity may be declared nondischargeable only if a creditor timely files and prevails in a nondischargeability action.
• Plan: A debtor’s detailed description of how the debtor proposes to pay creditors’ claims over a fixed period of time.
• Priority: The Bankruptcy Code’s statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full. For example, under the Bankruptcy Code’s priority scheme, money owed to the case trustee or for prepetition alimony and/or child support must be paid in full before any general unsecured debt (i.e. trade debt or credit card debt) is paid.
• reaffirmation agreement: An agreement by a chapter 7 debtor to continue paying a dischargeable debt (such as an auto loan) after the bankruptcy, usually for the purpose of keeping collateral (i.e. the car) that would otherwise be subject to repossession.
• secured creditor: A creditor holding a claim against the debtor who has the right to take and hold or sell certain property of the debtor in satisfaction of some or all of the claim.
• secured debt: Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans and tax liens.
• Trustee: The representative of the bankruptcy estate who exercises statutory powers, principally for the benefit of the unsecured creditors, under the general supervision of the court and the direct supervision of the U.S. trustee or bankruptcy administrator. The trustee is a private individual or corporation appointed in all chapter 7, chapter 12, and chapter 13 cases and some chapter 11 cases. The trustee’s responsibilities include reviewing the debtor’s petition and schedules and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. In chapter 7, the trustee liquidates property of the estate, and makes distributions to creditors. Trustees in chapter 12 and 13 have similar duties to a chapter 7 trustee and the additional responsibilities of overseeing the debtor’s plan, receiving payments from debtors, and disbursing plan payments to creditors.
• undersecured claim: A debt secured by property that is worth less than the full amount of the debt.