Tag Archives: bankruptcy
How Chapter 11 Restructures Business Debt
When a business finds itself drowning in debt, Chapter 11 bankruptcy can offer a lifeline. Unlike Chapter 7, which liquidates assets to repay creditors, Chapter 11 allows for debt reorganization. This means the business gets a chance to develop a plan to reorganize its debts and return to solvency. Here’s how Chapter 11 tackles these […]
Using Chapter 13 for Relief From Credit Card Debt
Crushing debt from credit card charges can feel inescapable. Minimum payments barely make a dent, and the stress of looming balances can be paralyzing. If you’ve explored other options and are still overwhelmed, Chapter 13 might be a path to financial freedom. Here is a primer on how this form of bankruptcy treats credit card […]
Grounds for Creditors’ Relief from the Bankruptcy Automatic Stay
Once a bankruptcy petition is filed in court, an automatic stay goes into effect that prevents creditors from taking further action to enforce most debt obligations. The purpose of the stay is to give the debtor time to reorganize its finances through the bankruptcy process. The stay remains in effect throughout the duration of the […]
Your Responsibilities as a Debtor in Possession During Chapter 11
The role of the debtor in possession (DIP) is essential to the success of a Chapter 11 bankruptcy. In most cases, the debtor’s business continues to be operated by its owner, who acts as the proxy of the bankruptcy trustee. However, the DIP also takes on a fiduciary duty to act in the best interests […]
How Exemptions Work in a California Bankruptcy
One of the most persistent misunderstandings in bankruptcy is that you have to give up your assets to gain a discharge from debt under Chapter 7. The truth is, 98 percent of Californians who file Chapter 7 get to keep all of their property. Remember, the goal of bankruptcy is to help you get a […]
Obtaining Debtor-in-Possession (DIP) Financing During Chapter 11
For companies bordering on financial collapse, Chapter 11 bankruptcy can offer relief through protection from creditors and a debt restructuring plan that provides a way to return to solvency. But the reorganization process requires access to capital. This is why debtor-in-possession (DIP) financing is critical. It allows the debtor, who remains in possession of the […]
Facing Adversary Proceedings That Challenge Discharge of Debts
The goal of a bankruptcy is to obtain a fresh financial start by having some or all of your debts discharged — namely, wiped out. However, there may be reasons that a creditor or the bankruptcy trustee objects to the discharge of certain debts or to all of them. This sometimes results in an adversary […]
How Nonconsensual Third-Party Releases Can Be Useful in Chapter 11 Bankruptcy Cases
Nonconsensual third-party releases are provisions in Chapter 11 bankruptcy plans that release non-debtor parties from liability to creditors without the consent of all potential claim holders. These releases can be a useful tool for debtors in a number of situations. The common purpose of nonconsensual third-party releases is to protect directors and officers from liability […]
The Perils of Not Responding to a Collection Lawsuit
When you are served with a summons and complaint in a collection matter, ignoring these papers will likely have costly consequences. You might not only lose the opportunity to defend yourself, but also put yourself at risk of collection measures that can take your assets and income from you, or even force you into bankruptcy. […]
What Can Delay Completion of a Chapter 11 Bankruptcy?
Chapter 11 bankruptcy allows a financially struggling business to get back on its feet by reorganizing its debts. But there is no definitive timeline for the Chapter 11 process. Depending on numerous factors, winding up a reorganization plan can take anywhere from six months to five years or even longer. There are multiple procedural stages […]
