Chapter 11 Bankruptcy - Savage Villoch Law

What is bankruptcy?

Savage Villoch Law, PLLC — Mon, 27 Apr 2015 03:59:54 GMT

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. Chapter 13 provides a discharge of certain debts if the debtor agrees to pay a portion of his or her disposable income over 3 to 5 years to a trustee for the benefit of the debtor’s creditors. Chapter 13 is for regular wage earners who either make too much money to qualify for Chapter 7 bankruptcy and/or would like to keep non-exempt property from liquidation by the bankruptcy trustee. For more information about bankruptcy, schedule a free consultation TODAY with Savage, Combs & Villoch, PLLC. Our telephone number is 813-200-0013. We do bankruptcies in Central Florida and we’re ready to help today! Please visit our website to learn more about bankruptcy and refer a friend or family member too.

A brief history of bankruptcy in the United States.

Savage Villoch Law, PLLC — Sun, 21 Dec 2014 05:10:30 GMT

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. Without federal bankruptcy laws in place, debtors were at the mercy of their home state laws, if the laws provided them with any relief at all. Once a debtor owed a debt, the debt dogged the debtor forever unless paid off. Also, debtors were unable to get rid of debts from other states because one state did not necessarily have jurisdiction (or power) to discharge a debt originating in another state. In colonial America, if you did not pay your debts, you were often times sent to debtor’s prison. And up until 1839, debtors could still be imprisoned for not paying their debts! In 1841 and then 1867, Congress passed new bankruptcy laws, but they suffered the same short lived fate as as the Bankruptcy Act of 1800. However, in each new attempt, bankruptcy law began to evolve, improve, and become the foundation for modern day bankruptcy law. For instance, in 1841, Congress began to allow voluntary cases, allow discharge of debtors who turn over their assets, and provide for the recovery of fraudulent and preferential transfers. In 1867, U.S. Districts Courts were recognized as having original jurisdiction over bankruptcy matters and corporations are finally recognized as debtors who can file bankruptcy. 1898 brought the first long-term bankruptcy law passed by Congress. It remained in effect for almost 80 years. This 1898 law called for “referees,” who were the predecessors to current bankruptcy judges. The law also created the Office of the United States Trustee. The Chandler Act of 1938 further created what are now known as chapters for separate types of bankruptcy, including a chapter for business reorganizations and a chapter for wage earners. Fast forward to the Bankruptcy Reform Act of 1978, which aside from 2005 reforms, is essentially the bankruptcy laws as we know them to date. This Act established bankruptcy courts in each district and provided for separate bankruptcy judges, who are appointed by the President and confirmed by the Senate. The Act also provided for new chapters 11 and 13 and makes it easier for businesses and individuals to receive discharge from their debts in bankruptcy. In 1986, Congress added chapter 12, which provides special bankruptcy relief to family farmers. In 2005, the most recent overhaul to bankruptcy took place and it was significant. Entitled the “Bankruptcy Abuse Prevention and Consumer Protection Act,” the 1978 laws were reformed to establish a “means test” where debtors must specifically qualify for chapter 7 bankruptcy; otherwise, their cases are dismissed or converted to chapter 13 plans. The reform also made credit counseling a condition for completing bankruptcy, among a few other things. Bankruptcy law has come a long way since 1800 where it was involuntary and aimed at merchant traders. Society has similarly come a long way since debtor’s prisons and refusing to allow a fresh start for the honest, but unfortunate debtor. No longer is bankruptcy as stigmatizing as it once was and is now seen as a tool to refresh and shed oppressive debt in order to improve and contribute once again to the economy. If you have any questions about whether bankruptcy is right for you, please contact Alfred Villoch, III, at Savage, Combs & Villoch, PLLC. The telephone number is 813-200-0013 or click www.savagelaw.us today!

So far in 2014, consumer bankruptcy filings are down 12 percent nationwide.

Savage Villoch Law, PLLC — Thu, 09 Oct 2014 04:05:37 GMT

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. See “Bankruptcy 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. ABI Executive Director, Samuel J. Gerdano, believes that “[t]he continued decline in bankruptcy filings corresponds to sustained low interest rates and high costs of filing.” He commented that “[t]otal filings are on track to fall under 1 million for the first time since 2007.” For more information about bankruptcy, please call Savage, Combs & Villoch, PLLC, at 813-200-0013. Also, please visit www.savagelaw.us!

Tampa Bay Business Journal reports that Arigato Japanese Steakhouse, LLC, abruptly closes the doors of its three Tampa Bay restaurants.

Savage Villoch Law, PLLC — Sat, 20 Sep 2014 15:47:53 GMT

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.” See “Arigato’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. Already in financial trouble, Arigato filed for Chapter 11 bankruptcy protection back in 2012. See In re Arigato Japanese Steakhouse, LLC, Case No. 8:12-bk-16665-MGW (Bank. M.D. Fla). Chapter 11 allows a company to file for bankruptcy but remain in business under the watchful eye of the United States Trustee, the creditors’ committee, and the bankruptcy court. In Chapter 11, a company can either reorganize its affairs and emerge as a leaner and meaner company or the business can wind down its affairs (i.e., liquidate) in an orderly fashion to maximize the value of its assets that are sold separately or sell the company as a whole through bankruptcy court supervision. It appears that Arigato confirmed its Chapter 11 plan to reorganize on June 25, 2013 and intended to stay in business at that time, but then on December 17, 2013, the United States Trustee filed a motion to dismiss Arigato’s bankruptcy case, complaining that Arigato had failed to timely file operating reports as required by the court and failed to pay quarterly fees of $9,750 and $6,825, respectively. See Docket No. 254. The motion appears to be still pending. Also, the Florida Department of Revenue filed a motion to dismiss Arigato’s case on July 30, 2014, complaining that Arigato failed to file tax returns for 2013 and 2014. This failure resulted in taxes, penalty and interest obligations in the approximate amount of $200,372.02. See Docket No. 289. In light of these financial troubles, it is not surprising that Arigato closed the doors to its three Tampa Bay Area restaurants and, unfortunately, it seems hard to believe that Arigato will “make good by everyone we are in debt to.” Chapter 11 allows a company to reorganize its affairs and emerge from bankruptcy a better company. But in Arigato’s case, it seems like the company just couldn’t make it work.