Chapter 11

Chapter 11 Reorganization Under the Bankruptcy Code

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.)

Background

A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy.

An individual cannot file under chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court, or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d)-(e). In addition, no individual may be a debtor under chapter 11 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

How Chapter 11 Works

A chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. A petition may be a voluntary petition, which is filed by the debtor, or it may be an involuntary petition, which is filed by creditors that meet certain requirements. 11 U.S.C. §§ 301, 303. A voluntary petition must adhere to the format of Form 1 of the Official Forms prescribed by the Judicial Conference of the United States. Unless the court orders otherwise, the debtor also must file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a schedule of executory contracts and unexpired leases; and (4) a statement of financial affairs. Fed. R. Bankr. P. 1007(b). If the debtor is an individual (or husband and wife), there are additional document filing requirements. Such debtors must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts.11 U.S.C. § 521. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). (The Official Forms are not available from the court, but may be purchased at legal stationery stores or downloaded from the Internet at www.uscourts.gov/bkforms/index.html.)

The courts are required to charge a $1,000 case filing fee and a $39 miscellaneous administrative fee. The fees must be paid to the clerk of the court upon filing or may, with the court’s permission, be paid by individual debtors in installments. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. Fed. R. Bankr. P. 1006(b) limits to four the number of installments for the filing fee. The final installment must be paid not later than 120 days after filing the petition. For cause shown, the court may extend the time of any installment, provided that the last installment is paid not later than 180 days after the filing of the petition. Fed. R. Bankr. P. 1006(b). The $39 administrative fee may be paid in installments in the same manner as the filing fee. If a joint petition is filed, only one filing fee and one administrative fee are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 1112(b)(10).

The voluntary petition will include standard information concerning the debtor’s name(s), social security number or tax identification number, residence, location of principal assets (if a business), the debtor’s plan or intention to file a plan, and a request for relief under the appropriate chapter of the Bankruptcy Law. Upon filing a voluntary petition for relief under chapter 11 or, in an involuntary case, the entry of an order for relief, the debtor automatically assumes an additional identity as the “debtor in possession. ” 11 U.S.C. § 1101. The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under chapter 11, without the appointment of a case trustee. A debtor will remain a debtor in possession until the debtor’s plan of reorganization is confirmed, the debtor’s case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. The appointment or election of a trustee occurs only in a small number of cases. Generally, the debtor, as “debtor in possession,” operates the business and performs many of the functions that a trustee performs in cases under other chapters. 11 U.S.C. § 1107(a).

Generally, a written disclosure statement and a plan of reorganization must be filed with the court. 11 U.S.C. §§ 1121, 1125. The disclosure statement is a document that must contain information concerning the assets, liabilities, and business affairs of the debtor sufficient to enable a creditor to make an informed judgment about the debtor’s plan of reorganization. 11 U.S.C. § 1125. The information required is governed by judicial discretion and the circumstances of the case. In a “small business case” (discussed below) the debtor may not need to file a separate disclosure statement if the court determines that adequate information is contained in the plan. 11 U.S.C. § 1125(f). The contents of the plan must include a classification of claims and must specify how each class of claims will be treated under the plan. 11 U.S.C. § 1123. Creditors whose claims are “impaired,” i.e., those whose contractual rights are to be modified or who will be paid less than the full value of their claims under the plan, vote on the plan by ballot. 11 U.S.C. § 1126. After the disclosure statement is approved by the court and the ballots are collected and tallied, the court will conduct a confirmation hearing to determine whether to confirm the plan. 11 U.S.C. § 1128.


In the case of individuals, chapter 11 bears some similarities to chapter 13. For example, property of the estate for an individual debtor includes the debtor’s earnings and property acquired by the debtor after filing until the case is closed, dismissed or converted; funding of the plan may be from the debtor’s future earnings; and the plan cannot be confirmed over a creditor’s objection without committing all of the debtor’s disposable income over five years unless the plan pays the claim in full, with interest, over a shorter period of time. 11 U.S.C. §§ 1115, 1123(a)(8), 1129(a)(15).

How to find a good bankruptcy attorney?

How to find a good bankruptcy attorney for your case?

Bankruptcy is one of the most complicated areas of law. There are different bankruptcy laws at federal and state levels. The process of filing for bankruptcy is a complex court procedure. To ensure to comply with all requirements properly, consult a bankruptcy lawyer. But how one can find a good bankruptcy lawyer?

Here are some ways to find a good bankruptcy lawyer:

First of all, find some contact details of lawyers

  • Check with your family and friends to get some reference who may have hired a bankruptcy attorney.
  • Check American Bar Association and American Bankruptcy Institute (ABI)
  • Contact the local bar association in your area
  • Search on internet, you will find lot of contacts and useful information
  • Check your local telephone book for bankruptcy lawyers

Once you get contact details, call or send emails to them, or drop your phone or email so that they can call you back. Most of the bankruptcy lawyers give you a free consultation on your case. So, create a list of bankruptcy lawyers based on the information you might have gathered from the above sources and start calling or visiting them for free consultancy.

While calling or during free consultation, please ensure to ask

  • Number of bankruptcies they handle in a month or in a year?
  • Number of bankruptcies of the kind as is yours?
  • Availability of attorney for you and your case during filing and when the case is in court?
  • Meet the actual person you will deal with.
  • The list of documents you are required to produce
  • The whole process, starting from filing the bankruptcy to final settlement port court order, till you till you move on in your life
  • A plan for your case he suggests that include time, cost and other important points like your future prospects in your personal life, job etc.

Be sure to keep all details of your case ready. It will help if you create a small checklist of items to be referred or discussed. You should keep on updating this list as you discussions with attorneys continue and you gain more information about the requirements and information they might ask for.

Visit the local court for a day to have a first-hand feel of what you should expect from your attorney. Observing the attorneys in action can give you an idea of the lawyer you want representing you. You may as well find out which local attorneys specialize in bankruptcy laws, especially the type of bankruptcy you are seeking. Get the names of lawyers on the local bankruptcy court’s debtor or creditor committees; they may well be your potential attorneys. Don’t forget to check about local programs that offer free or low-cost legal help with bankruptcies.

Select the most suitable one

  • Compare attorneys’ experience and reputations. Ensure to verify information by directly checking with the attorneys and their firms. Keep in mind that bankruptcy law is a specialty; make sure he knows his way around bankruptcy court.
  • Check with your state’s bar association and your local bar association for attorney’s eligibility to practice law in your state and any disciplinary action against him in the past.
  • Is the attorney a member of ABI, National Association of Consumer Bankruptcy Attorneys, or state or local bankruptcy attorney associations?
  • Compare the upfront fee and expenses. Find out if any fees are not included. Check from the attorneys about local programs that offer free or low-cost legal help with bankruptcies.
  • Don’t go for the cheapest, find a reasonable one. Too much or too little may be avoidable unless you have a clear reason to select them.
  • Most importantly, did you feel comfortable talking to the attorney? It is very important as you will be dealing with them for long period of time and quite often. And it can’t be overemphasized that the most important aspect of any legal process is often effective communication between client and attorney.

Once you have finalized a bankruptcy attorney for your case, go and meet him. Get all specifics and details in writing. It is always good to have everything in black and white.

Loan Modification

What is the difference between a loan modification and a forbearance agreement?

A loan modification is a permanent change in one or more terms of a borrower’s home loan, allows the loan to be reinstated, and results in a payment the homeowner can afford. A forbearance agreement is a temporary solution where the lender agrees to do or not do something that they are legally entitled to do. Examples are no payments made for six months, accepting interest-only payments for a period of time or the lender agreeing not to foreclose while the borrower attempts to sell the home.

Can the lender include late charges in the Loan Modification?

The federal plan under the Obama Administration, Making Home Affordable, mandates that the bank waive any administrative charges, late fees and penalties when offering a loan workout.

How will the Making Home Affordable Plan help me get a loan modification?

This plan allocates $75 billion dollars and this money is used to subsidize lenders and loan servicers that agree to offer loan modifications to their clients. Thus, it gives lenders a financial incentive to help to qualified borrowers. In addition, homeowners who pay their new modified payments on time may be eligible up to $5000 credit to their loan balance.

How do I know if I will qualify for a loan modification?

You don’t! There is no guarantee that the bank will modify your loan and anyone that tells you they guarantee results are lying! However, the primary criteria your lender will look at will be your ability to pay new modified payment. If you provide proof of income, expenses and proof that whatever hardship you encountered has been addressed (you either have increased your income or reduced your expenses), then you stand a very good chance of having your loan modified.

Do I have to be currently delinquent on my payments to get a loan modification?

Under the Making Home Affordable Modification Plan, the federal government will pay lenders an extra bonus for reaching out to those homeowners that are current, but at risk of becoming delinquent in the future. This will help stabilize our economy as borrowers are given assistance before they default on their loans, hopefully preventing future foreclosures.

What is an acceptable Hardship situation?

There is no one answer. Contact a qualified bankruptcy lawyer for further assistance. Because every person is unique, each homeowner has a unique set of circumstances. Generally, lenders consider divorce, marital separation, loss of employment, the death of spouse, co-borrower or family member, illness, job relocation, and/or military service to be acceptable reasons to consider a loan modification. By including a serious, detailed hardship letter as part of your modification application, the lender is given the documentation necessary to learn about your specific circumstances.

Foreclosure Defense

What is a foreclosure?

A foreclosure is a legal proceeding that is started by a lender after a homeowner has failed to pay his/her mortgage. After a homeowner has failed to make their payments on time (usually at least 90 days, but a lender does not have to wait before holding a borrower in default after even one missed payment), a lender will serve notice of default on the borrower as required by the loan documents (specifically the Mortgage in New York State). If the borrower does not cure their default by the time stated in the default notice, the lender can commence foreclosure proceedings in accordance with the law to take actual possession of the home. If a foreclosure is permitted, the borrower loses the title to the home and the lender becomes the official owner of the home.

What happens in a foreclosure proceeding?

A foreclosure proceeding occurs when a lender files a lawsuit seeking to take possession of your home. After the lender commences the action, the borrower is given a limited time to reply. If the borrower fails to reply, a default judgment can be entered and ownership of the home transferred to the lender by the court. If a borrower appears in the action, the Court will usually order the parties to provide each other with whatever information each has in their possession and over time, listen to the factual and legal arguments of each party. Ultimately, a Judge may make a legal ruling deciding the result or a trier of fact (jury) could decide the case if an actual trial is needed.

What is a Notice of Lis Penden?

A Notice of Lis Pendens (“Lis Pendens”) is a legal document that is filed with the County Clerk’s Office. This document gives notice to all that there is a pending lawsuit against the borrower and the property. A Notice of Lis Penden is usually filed when a bank or creditor wishes to initiate foreclosure proceedings against a delinquent borrower. Once the Lis Pendens is filed, the borrower is served with a Summons and Complaint. These documents give the borrower formal notice that the foreclosure action has been started. In New York State, a borrower then has 20 days to respond if they were personally served, and 30 days to respond if they were served in any other manner.

What should I do if I received a foreclosure notice?

If you have been served with a Summons and Complaint containing a foreclosure notice, you should act as quickly as possible to explore any foreclosure defenses you might have. The best thing you can do is speak with a qualified lawyer. Generally, if your family attorney does not handle this area of the law, they should have the professional expertise to refer you to someone who does. By getting help from a knowledgeable law firm and its’ staff, you will receive the information, advice and solutions you need to avoid foreclosure, or if foreclosure is not avoidable, to help you protect any and all rights you may have, including the right to sell your home if you have equity in it, a “short-sale” if it can be negotiated with your lender or a deed in lieu of foreclosure whereby you can walk away from the home without any further obligations to your lender.

Bankruptcy Attorney

Bankruptcy can be a complex process. If you live in Jacksonville, you must file in the Bankruptcy Court for the Northern District of Florida You also need to comply with federal, state and local rules and procedures.

Why hire an attorney for filing bankruptcy in Jacksonville?

Bankruptcy rules, along with the Court Rules make things difficult for you to file your own bankruptcy case. It could be poorly written, Jacksonville court’s local rules probably won’t make much sense to you. And you must comply with the details of the process, such as filing dates, filing procedures, fees, etc.

The main forms used in bankruptcy are standard forms, used nationwide in all bankruptcy courts. However, the local bankruptcy court may have additional local forms for dealing with things like the list of creditors. All these could really be overwhelming if you want to do it yourself. Therefore, think seriously about find a good bankruptcy lawyer in Jacksonville. Having a local bankruptcy lawyer practicing in Jacksonville has several benefits. One is that he or she understands Florida State Exemptions, another is that he or she understands allowable expenses, and a third is that he or she can help you navigate through the many rules and regulations that he or she has been trained for, and most non-attorneys have a hard time understanding.

Finding an attorney who practices in Bankruptcy Court in Jacksonville, FL can be daunting job. You need to consider several things to ensure you are hiring a good attorney. Read how to find a good bankruptcy attorney for your case. If you need to hire a bankruptcy attorney familiar with Florida, you will find that we have all of the qualities of a good Bankruptcy Attorney right here in Jacksonville.

Where to file your bankruptcy if you live in Jacksonville, Florida?


United States bankruptcy courts operate under the federal jurisdiction. Bankruptcy cases may never be filed in any Florida state courts. Across the United States, there are 94 federal judicial districts, but if you live in Florida, you must file in either the Southern District Court of Florida or the Northern District of Florida, depending on the county of your residence. Decisions of a bankruptcy court judge are subject to appeals to the United States district court.