Articles Posted in Chapter 11

Bankruptcy is a federal law that allows people and businesses (even cities and municipalities) to manage or eliminate debt.  Bankruptcy is available to most everyone, and you do not even need to be insolvent to file. Bankruptcy is important because it imposes an immediate “automatic stay” on all creditors, and these creditors must stop all collection efforts.  If the creditors continue to call, send letters, file lawsuits, etc., those creditors are in violation of bankruptcy law and could be fined or required to pay sanctions.  This automatic stay gives the bankruptcy filer (or debtor) a breathing spell.

There are different chapters of bankruptcy depending on your needs or factual situation. There are Chapters 7, 9, 11, 12, and 13.  The most common chapters for everyday consumers are Chapters 7 and 13.

Chapter 7 provides a discharge of certain debts if the debtor agrees to give up all of his or her non-exempt property to a trustee for sale for the benefit of the debtor’s creditors.   Most people will find that there are very little to no assets available for creditors after the exemptions.  For example, in Florida, a person’s home can be exempt, retirement accounts can be exempt, up to $1,000 of a person’s vehicle can be exempt, property held jointly with a non-debtor spouse can be exempt, etc.

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

Contrary to pop culture belief, bankruptcy existed long before the game show Wheel of Fortune.  Remember when contestants would lose their prize money if they spun the wheel and randomly landed on the ominous black wedge, “BANKRUPTCY”?  Bankruptcy also existed way before celebrities like M.C. Hammer, Billy Joel, Burt Reynolds, and Mike Tyson each filed for bankruptcy protection. P.T. Barnum, a famous American showman and businessman, filed bankruptcy in 1877.  K-Mart filed bankruptcy in 2002.

Bankruptcy in the United States dates back to the United States Constitution itself. Article I, Section 8 of the U.S. Constitution gives Congress the power to enact uniform laws on the subject of bankruptcies. Although Congress had this power beginning in 1787, Congress did not pass a bankruptcy law until about 13 years later in 1800 and, even then, the law passed was short lived and was limited to involuntary bankruptcy proceedings brought against merchant and traders. In 1803, Congress repealed the Bankruptcy Act of 1800, citing excessive costs and corruption.

By Alfred Villoch, III, Esquire, with Savage, Combs & Villoch, PLLC

Consumer bankruptcy filings are down 12 percent so far in 2014, according to Epiq Systems, Inc., and as reported by the American Bankruptcy Institute.  SeeBankruptcy Filings Through First Three Quarters of 2014 Fall 12 Percent from 2013, Commercial Filings Fall 22 Percent.” The total consumer filings nationwide this year are 705,452.  Commercials filings are down 22 percent over the same period.   The total commercial filings are 26,767.

The top bankruptcy-filing states per capita are Tennessee, Alabama, Georgia, Utah, and Indiana.  Surprisingly, Florida is not in the top 5.

By Alfred Villoch, III, with Savage, Combs and Villoch, PLLC

This meeting is named after section 341 of the bankruptcy code.  It’s usually held about one or two months after you file for bankruptcy.  You are required to attend this meeting in order to successfully complete bankruptcy and discharge your debts.  Your attorney will attend the 341 meeting with you and will make sure that you are comfortable and prepared.   You should bring your driver’s license and social security card.

A trustee is the person who administers your bankruptcy case.  The 341 meeting is an opportunity for the trustee appointed in your case to ask you questions generally about your assets, liabilities, and financial affairs.  The trustee will investigate possible fraud, genuine mistakes in the paperwork, and will make sure that your paperwork is in full and complete order. The trustee will also speak with you about:

By Alfred Villoch, III, at Savage, Combs & Villoch, PLLC

Arigato Japanese Steakhouse, LLC, a restaurant with three locations in the Tampa Bay area, including a popular location in the Carrollwood area, has permanently closed its doors, according to Eric Snider with the Tampa Bay Business Journal.  The restaurant was founded in 1971 and has been in the Tampa Bay area since 1978.

Mark Douglas with WFLA quotes Arigato’s owner, Dale Del Bello, as stating that he is “currently working very hard and doing everything in [his] power to make good by everyone we are in debt to.”  SeeArigato’s owner saddened by his restaurant closures in Clearwater and St. Petersburg.”  While this is an admirable quote from the owner, it is likely a hollow promise based on recent filings with the bankruptcy court in Tampa.

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