If The Defendant Is Attempting To Reorganize Its Debts Under Chapter 11 Do I Have Any Say About The Defendants Reorganization Plan
The plan of reorganization should specify the claims that the debtor proposes to pay, in whole or in part, and the terms of such payments over time often at least five years. The debtor must provide sufficient information for each creditor to determine exactly what, if anything, he or she will recover if the debtors proposed plan is approved by the court. The plan will include separate classes of similar types of claims, whether secured, or unsecured, etc., as well as specified percentages of the value of the claims asserted against the debtor.
In order to maximize your recovery, you must exercise a role in this process. Merely filing a proof of claim, without more follow-up, is unlikely to generate the best result for you. The basis for your claim may be so unique, compared to the debtor=s other creditors, that you are in a class of one or just a few creditors, without whose support the debtor cannot obtain approval of the plan. As the debtors goal is to obtain approval of its reorganization plan, you may be in a position to achieve a better-than-expected result, depending on the debtor and the overall value of the claims asserted in the case.
What Property Is Safe From Creditors
Exempt property includes most of what you need to live:
- Household items, up to $30,000 for a single person and $60,000 for a family.
- Vehicles, one for each licensed driver in the house.
- Your homestead, up to 10 acres urban property and up to 100 acres rural and 200 acres . NOTE: If you are behind on your mortgage, property taxes, or home equity payments, your homestead can be foreclosed. Dont get a home equity loan to pay off credit card debts or medical bills -if you default on the equity loan, you could lose your home.
- Other exempt property, including two firearms, tools of your trade, sporting equipment, bicycles, 2 horses, 12 head of cattle and other items.
Do I Have To File Bankruptcy Before Theres A Judgment
First, remember that it takes weeks or even months from service of the actual lawsuit until the creditor actually has a judgment on which he can execute.
There are time periods prescribed in the law of each state which create the absolute minimum time periods required. In the real world, most institutional creditors, like credit card companies, dont move these suits forward with much urgency.
In general a debt represented by a judgment is just as dischargeable as the same debt prior to entry of judgment. Note, however:
- A judgment lien that attaches to assets is only avoidable by the debtor if it impairs an exemption. More about exemptions.
- If the complaint alleged fraud or other grounds that would make a debt non dischargeable in bankruptcy, entry of a judgment against you may prevent you from later contesting the facts .
- In the case of debts that are unliquidated , a judgment will liquidate the debt: that may have the effect of increasing your debts beyond the eligibility requirements of Chapter 13, with its expanded discharge and inexpensive reorganization possibilities.
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Talk To A Professional For Advice
If your business is struggling with debt, it may feel like bankruptcy or closing your business is the only option.
Before you do anything, seek advice from a professional, such as a or financial counsellor. They can suggest different ways of repaying your debt that don’t involve bankruptcy or closing your business.
The National Debt Helpline can provide you with free, independent and confidential advice.
Do Certain Types Of Employment
Yes. After the administrative expenses of the bankruptcy case are paid, certain employee wage claims for unpaid wages or other forms of compensation are entitled to the highest priority treatment in most cases under the Bankruptcy Code up to an amount not to exceed $12,850 as of April 1, 2016. per individual or corporation, as the case may be, earned within 180 days before the date of the filing of the petition or the date of the cessation of the debtors business, whichever occurs first.
Additionally the unpaid wages or other forms of compensation must have been earned as:
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Adversary Proceeding Filed In Bankruptcy Court
A creditor who doesnt already have a fraud judgment against you can file an adversary proceedinga lawsuit in bankruptcy courtwithin 60 days of the first meeting of creditors. If the creditor doesnt file the proceeding on time, the debt remains dischargeable and eventually goes away.
The debt becoming dischargeable assumes, however, that you properly listed the creditor in your bankruptcy petition. If you didnt, the omitted creditor could file a fraud lawsuit against you even after your bankruptcy case is over.
Avoiding Pennsylvania Court Judgments In Bankruptcy
Unfortunately, some people will not contact our Bucks County bankruptcy lawyers until after a judgment has been entered. Fortunately, there are some tools available to help a debtor even after a court-ordered judgment. Under certain circumstances, a judgment lien could be avoided if it impedes a debtors exemptions. For example, you file a Chapter 7 bankruptcy after a judgment of $50,000 has been entered against you. Under Pennsylvania law, you have a judgment lien against your home. If your property is worth $200,000 and you have a $190,000 outstanding mortgage, then you have no exempt equity in the property. Because the judgment lien has no exempt equity to attach to when your case is filed, the judgment lien could be removed. Avoiding a lien in bankruptcy could be challenging, especially if a creditor challenges the value of your property.
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Act Before A Lien Is Placed On Your Property
Bankruptcy can stop a wage garnishment, even one that is in process. It can also stop most creditors from taking money from your bank account, the only exception being if you bank where you owe money. However, bankruptcy does not deal with secured debts. That means if your creditor places a lien on your home or other property, they will be entitled to continue to seize and sell those attached assets even if you file bankruptcy.
If you have received a judgment order that you cannot pay, talk to a Licensed Insolvency Trustee to find out how a consumer proposal or bankruptcy can help in your situation.
Can You File For Bankruptcy To Avoid A Lawsuit In Pennsylvania
If you fail to make monthly credit card payments or default on a loan, a creditor in Pennsylvania has a right to sue you in civil court. In addition to what you contractually owe a creditor, you could be required to pay additional court and attorney fees if a judgment is entered against you.
You have several options if you are sued, including fighting the lawsuit, attempting to settle the claim, ignoring it, or filing for bankruptcy to stop the suit and any other legal proceedings you are facing. Bankruptcy protects you from lawsuits and, in Pennsylvania, avoiding a judgment could have long-term beneficial implications.
Filing for bankruptcy should be a well-thought-out decision. By speaking with one of our Philadelphia bankruptcy attorneys, you will better understand the pros and cons of filing especially if you are a defendant in a pending lawsuit. Call Young, Marr & Associates at 701-6519 to review your options during a free consultation.
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What To Expect During A Free Consultation
During your free consultation we’ll go over the following:
During your free consultation we might need some specific information and documents from your bankruptcy case and we can usually access these documents from the court records during the call. So don’t worry if you can’t locate a copy of your bankruptcy discharge order or some other information from your case. Getting started with a free consultation is always the right decision.
Learn About Wiping Out Lawsuit Judgments In Bankruptcy
By Baran Bulkat, Attorney
Filing for bankruptcy relief will discharge most of your debts, including lawsuit judgments. But exceptions exist. Whether your bankruptcy will discharge a lawsuit judgment will depend on:
- the type of judgment, and
- whether the judgment creditor has placed a lien on your property.
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Is Bankruptcy The Solution
The should not, in general, be driven by a single debt.
Consider your total financial picture, the scope of relief that bankruptcy offers, and the non bankruptcy alternatives.
But often, filing of a collection action reinforces the idea that you need to do something to regain control of your financial future.
Proving Fraud At Trial
Proving fraud at trial isnt easy. Your creditor must prove that:
- you knowingly made a fraudulent representation
- the creditor relied on the misrepresentation , and
- the creditor lost money as a result.
Matters involving fraud are serious. A bankruptcy attorney can review your case and help you determine your best course of action. And hiring a lawyer likely isn’t as pricey as you might think. Find out how much it costs to hire a bankruptcy attorney.
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Filing Bankruptcy After Losing Lawsuit
There are a few ways to interpret the question: Can I file for bankruptcy after being sued? It may mean after a person receives a notice of the lawsuit but proceedings have not yet taken place. It could also refer to the pending process of a lawsuit as it progresses or even after a person has already lost the lawsuit. By now you know that you can file for bankruptcy after being notified of the lawsuit, but did you know you could also do it after the conclusion of the case? At virtually every stage of a lawsuit, one is able to file for bankruptcy.
Speak With A Denver Bankruptcy Law Firm Today
Being sued is stressful and can result in your property being seized out from under you, but in most cases bankruptcy can help. This is because bankruptcy can wipe out your liability for the debt and stop any further collection against you, regardless of whether you have been sued already or whether there is a judgment against you, or even whether your wages are already being garnished.
If you are planning to file for bankruptcy, a lawsuit should not cause any problems, though it may speed up the time frame in which you want to file in order to avoid a garnishment or liens on your property.
In most cases, having a lawsuit filed against you by a creditor means it is a good time to have a free consultation with a bankruptcy attorney to explore all your optionsand the sooner the better. Most people wait too long to find out about bankruptcy protection, and it costs them. If you are served with a summons, its not too late.
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Debts Never Discharged In Bankruptcy
While the goal of both Chapter 7 and Chapter 13 bankruptcy is to put your debts behind you so that you can move on with your life, not all debts are eligible for discharge.
The U.S. Bankruptcy Code lists 19 different categories of debts that cannot be discharged in Chapter 7, Chapter 13, or Chapter 12 . While the specifics vary somewhat among the different chapters, the most common examples of non-dischargeable debts are:
- Alimony and child support.
- Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years.
- Debts for willful and malicious injury to another person or property. âWillful and maliciousâ here means deliberate and without just cause. In Chapter 13 bankruptcy, this applies only to injury to people debts for property damage may be discharged.
- Debts for death or personal injury caused by the debtorâs operation of a motor vehicle while intoxicated from alcohol or impaired by other substances.
- Debts that you failed to list in your bankruptcy filing.
Does Filing For Bankruptcy In Canada Affect My Spouse
Filing for bankruptcy in Canada does not directly affect your spouse. Your debts are your debts only you are responsible for them. If you go bankrupt, your debts are discharged. Your husband or wife or common-law spouse is NOT responsible for your debts.
Many people believe that because you are married, your spouse is automatically responsible for your debts. This is not true. Often collection agents, when they are trying to collect from you, tell you that if you dont pay they will get the money from your spouse. This is a collection agency scare tactic they can only go after you for your debts.
The only exception is if your spouse has co-signed or guaranteed your debt. For example, if you took out a loan and your spouse co-signed for it, it is also legally their loan. If you both have a credit card on the same account, the credit card debt legally belongs to both of you.
Remember, your spouse is liable for the debt, not because they are your spouse, but because they have signed for the debt.
There may be an indirect impact on your spouse in the future if you try to obtain financing jointly As you rebuild your credit, you might not be eligible to co-sign a loan or obtain credit. Or, you may be subject to higher interest rates. This may affect your spouse if you jointly wish to apply for credit in your future.
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Can You Discharge Debts Related To A Car Accident In Bankruptcy
Submitted by the Bond & Botes Law Offices – Thursday, December 18, 2014
The impact of a car accident may be emotionally and physically devastating. It is even more devastating when it has been determined the car accident was entirely or even partially your fault. What happens when you are underinsured or not insured at all at the time of the accident? The impact of such an event may cause your finances to spin out of control.
Can Bankruptcy Stop Civil Lawsuit
Filing for bankruptcy may either put a hold on a lawsuit or it may stop it altogether, depending on the case. If the lawsuit concerns money or property, your lawsuit may be completely discontinued. If it involves other civil matters, it may not stop the proceedings, but rather place a temporary pause or suspension on them.
Immediately upon a bankruptcy filing, your protection will kick in. This protection, known as automatic stay protection, prevents creditors from attempting any collection activity. This includes attempts to win money through a lawsuit judgement.
There are some exceptions to which cases allow automatic stay. For example, a criminal case would not stop court proceedings from moving forward. In addition, proceedings to establish paternity and to establish or modify child support and alimony cannot stop because of a bankruptcy filing. Matters involving child custody and visitation are also exceptions to this protection.
Aside from the aforementioned cases, most other types of lawsuits involving the collection of debt will fall under automatic stay protection. Some of these cases might include:
- Breach of Contract Lawsuit
- Financial Dispute Between Business Partners
- Personal Injury Lawsuit
- When a plaintiff seeks compensation for an injury due to a negligence-related accident, such as a motor vehicle crash.
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Bankruptcy And A Personal Injury Case
When you submit a bankruptcy filing to the court, everything you own becomes part of your bankruptcy estate. Practically, this means that all of your possessions, intangible assets, and any property youâre entitled to become part of your bankruptcy estate on the date you file for relief. Whether youâve already filed a personal injury case or youâre still thinking about filing an accident case, the value of that legal claim will be considered part of the estate because you technically became entitled to any settlement you may reach when the accident occurred. If you file a personal injury claim, the bankruptcy trustee assigned to your case will evaluate its potential value and determine whether to pursue the claim on behalf of your creditors. The trustee is even empowered to agree to a settlement amount.
What Are Lawsuits And Judgments
A lawsuit is simply a way for a creditor to get a court to issue an order that says the money is owed to the creditor, and the amount.
The Judgment, in turn, gives the creditor the ability to try to collect the debt by whatever means are allowed pursuant to applicable state law.
In California, this includes wage garnishment, seizing funds in bank accounts, and placing a lien against real estate and other assets.
So, it is obviously best to file a bankruptcy case before a judgment is entered on the lawsuit.
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