- Adversary Proceeding
- Automatic Stay
- Buyback Agreement
- Chapter 13 Plan
- Means Test
- Meeting of Creditors
- Motion for Relief from the Automatic Stay
- Negative Equity
- Proof of Claim
- Secured Debt
- Unsecured Debt
- US Trustee
An Adversary Proceeding (AP) is similar to a lawsuit filed by either the Debtor or a Creditor and runs on a separate docket beside the core bankruptcy case. Common reasons for bankruptcy attorneys to file an AP is to seek sanctions against a creditor for violating the Debtor’s rights, or to determine whether IRS debt is dischargeable. A common reason for a Creditor to file an AP against a Debtor is to dispute the dischargeability of a debt.
The day a person files for bankruptcy the bankruptcy Court issues an Order to all creditors listed in the Petition that tells them to stop any and all attempts to collect a debt against the Debtor. This Order is called the “Automatic Stay”. There are severe penalties if it is proven that a creditor willfully violates the automatic stay, and I prosecute creditors who do so.
In a Chapter 7 bankruptcy, a Debtor must sometimes enter into a buyback agreement with their Trustee if they have assets that are not protected by applicable exemption law. If the Debtor wants to keep these assets, bankruptcy attorneys will negotiate an agreement between the Debtor and the Trustee to buy the non-exempt property back from the bankruptcy estate. Usually, this involves the Debtor making monthly payments to the Trustee.
Chapter 13 Plan
When a Debtor files a Chapter 13 bankruptcy, she enters into a payment plan with the Chapter 13 Trustee. In Orlando, the Trustee is Laurie K. Weatherford. As an Orlando bankruptcy attorney, I draft a plan for my client that explains goals my client wants to accomplish in her Chapter 13 case. The plan is filed at the beginning of my client’s case, and serves as a framework for the entire case.
In Chapter 13 bankruptcy, the Chapter 13 Plan must be approved by the Court after all objections made by the bankruptcy attorneys to Proofs of Claim filed by Creditors have been heard, and any objections by Creditors to the Chapter 13 plan have been resolved. Once the bankruptcy Judge Confirms the Plan, the parties to the bankruptcy are bound by its terms.
In bankruptcy, anyone a Debtor owes money to at the time the Debtor’s case is filed is considered a Creditor.
As an Orlando bankruptcy attorney, the Debtor, first and foremost, is my client.
More commonly, the person filing bankruptcy is known by the bankruptcy Court as the Debtor.
Receiving the Discharge Order is your ultimate goal when filing bankruptcy.
A Discharge is entered at the end of a bankruptcy case and releases the Debtor from personal liability for all debts except those few that are Non-Dischargeable. In other words, you are no longer legally required to pay any debts that were discharged. A Discharge is a permanent Order prohibiting Creditors from taking any form of collection action on discharged debts, including legal action and communications, such as telephone calls, letters, and personal contacts.
If Discharge is the ultimate goal in bankruptcy, Dismissal is like getting a red card and being tossed from the game. A Dismissal usually occurs in a Chapter 13 case if you are unable to make your payment under your Chapter 13 Payment Plan. If you case is Dismissed, your Creditors can collect on the debts you owe them, just as they could before your bankruptcy filing.
Exemptions are provided by State or Federal Statute and used by Debtors to protect certain assets from being liquidated in bankruptcy court. In other words, applying the exemptions available to you correctly will allow you to keep your stuff. One of my main jobs as an Orlando bankruptcy attorney is to determine which exemptions apply in my client’s case and use them correctly to allow my client to keep the assets he or she wants to keep.
The most commonly used exemptions are the homestead exemption, vehicle exemption, wildcard exemption, and retirement plan exemption.
When you have missed 4 or more mortgage payments on a piece of real estate, the creditor you owe the money to can file a lawsuit against you to take the home away from you. This lawsuit is known as a foreclosure.
In Florida, the creditor must file a foreclosure lawsuit against you and receive a final judgment against you in that lawsuit before the real estate can be taken away from you. This procedure can last over a year.
Filing a Chapter 13 bankruptcy is one way to prevent a foreclosure from taking place or to stop an active foreclosure.
The Means Test is part of the not-so-new bankruptcy law that went into effect in 2005 and applies to your eligibility to file a Chapter 7 bankruptcy.
Very basically, if your gross household income exceeds the median income for a household of your size in the state in which you are filing bankruptcy, then you fail the Means Test.
Did you click on that link? Is your household income higher than the median? Do you think that you can’t file Chapter 7 bankruptcy now?
Think again. As an Orlando bankruptcy attorney, I have represented thousands of clients whose income level exceeded the median income level yet still received a Discharge of their debts in a Chapter 7 bankruptcy.
“Passing” or “Failing” the Means Test, despite Congress’s best intentions, has become a subjective endeavor.
If you think that you might fail the Means Test, then you should contact an experienced Orlando bankruptcy attorney, like me, to discuss your situation.
Meeting of Creditors
Once a bankruptcy case has been filed, the Trustee conducts a meeting with the Debtor called the Meeting of Creditors. This is a bit of a misnomer, as Creditors rarely show up for the meeting. At this time, the Trustee will place the you under oath and ask you questions about the bankruptcy petition that your Orlando bankruptcy attorneys filed for you.
Motion for Relief from the Automatic Stay
A Motion for Relief can be filed in either a Chapter 7 or Chapter 13 bankruptcy. When this happens, a Creditor is asking the bankruptcy judge to allow it to collect on a debt that it otherwise would not be allowed to collect on. Usually the Creditor is asking for permission from the bankruptcy Court to proceed with an ongoing State Court action involving the repossession or foreclosure of property the Debtor owned prior to filing bankruptcy.
There are reasons why a bankruptcy judge in Orlando would allow a creditor permission to collect on a debt included in your bankruptcy. However, there are many reasons why your Orlando bankruptcy attorneys would object to the Creditor’s request.
A Motion for Relief is one of the many examples why you should have experienced Orlando bankruptcy attorneys on your side. 407-898-8225
The difference between what you owe on your car, house, or other collateral and what that collateral is worth. For example, if you owe $15K on a car, and the market value of the car is $10K, then you have $5K of “negative equity” in the car.
Negative equity is created when you “roll over” a previous car loan into a new one. Negative equity can be eliminated by redeeming a car in a Chapter 7 bankruptcy or by taking advantage of the benefits of a Chapter 13 bankruptcy.
When filing bankruptcy, Debtors fill out papers that eventually get filed with the bankruptcy Court by your Orlando bankruptcy attorneys. These papers are known as the Bankruptcy Petition. In these papers, you must fully disclose all of your assets and all of your debts.
Proof of Claim
In a Chapter 13 bankruptcy, each Creditor listed in the case is given the opportunity to file a Proof of Claim with the bankruptcy Court. This claim must include evidence that the Debtor owes them money. In a Chapter 7 bankruptcy, claims are only paid if the Chapter 7 Trustee has recovered assets or funds from the Debtor.
A Reaffirmation Agreement only happens in Chapter 7 bankruptcy. This agreement, that must be approved by a bankruptcy judge, makes the Debtor liable for a debt that otherwise would have been Discharged in the bankruptcy.
In other words, you’re stuck with a debt that you would have been able to get out of had you not signed, and the Court had not approved, the Reaffirmation Agreement. Because most Reaffirmation Agreements are NOT in my clients’ best interests, as an Orlando bankruptcy attorney, I do not sign Reaffirmation Agreements and the bankruptcy judge generally will not approve Reaffirmation Agreements
In Chapter 7 bankruptcy, it is sometimes possible for the Debtor to pay only the market value of a vehicle or, other personal property, instead of the total amount owed on the item at the time of filing bankruptcy. This is called Redeeming the property and is performed by your Orlando bankruptcy attorneys filing a motion with the bankruptcy Court once the case is filed.
Secured debt is debt that has some type of collateral attached to it, which the Creditor is entitled to take possession of if the debt is not paid. The most common types of secured debt are car loans and mortgages.
In each bankruptcy case, the bankruptcy Court appoints a Trustee to oversee the case. A Chapter 7 Trustee’s job is to review each case to determine if there are assets and liquidate any of those assets that are not exempt. The Chapter 13 Trustee’s job is somewhat different. The Chapter 13 Trustee collects payments on the Chapter 13 Plan and distributes funds paid into that plan to Creditors with legitimate claims in the case.
Unsecured debt is the most common type of debt. These debts are not tied to any property. Think credit cards and medical bills.
The US Trustee’s office oversees each case and reviews the bankruptcy petition for possible fraud and Means Test violations.