Banking and Foreclosure

“We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”

The attorneys at KDAO serve both individual and business clients through their financial difficulties by assisting them through the bankruptcy process.  While bankruptcy is rarely painless, bankruptcy law provides an opportunity to either eliminate debt to make a fresh start or make the client’s financial situation bearable.

Individuals

If you are facing bankruptcy, there is more on your mind than just money.  There are other issues such as your home, your family, and your credit.  Taking these factors into consideration, KDAO’s bankruptcy attorneys can provide you guidance as to your best course.  In individual bankruptcy, there are three possible paths: Chapter 7 bankruptcy, Chapter 11 bankruptcy, and Chapter 13 bankruptcy.  In Chapter 7, also known as liquidation bankruptcy, most debt is wiped out entirely.  In Chapter 13, all of an individual’s debt is restructured into a single payment and single repayment plan.   Chapter 11 is also an option for individuals, and can be a powerful and versatile tool.  For those individuals who have significant property or business interests, Chapter 11 can provide more control, time, and options than are generally available under liquidations in Chapter 7 or reorganizations under Chapter 13.

Chapter 7

Chapter 7 can be a good option for individuals facing a great deal of unsecured debt, including things like credit card debt, medical bills, and utility bills.  In Chapter 7 bankruptcy, all of these unsecured debts are eliminated, except for certain debts that are generally not dischargeable in bankruptcy like student loans and some taxes. 

However, all of the individual’s personal assets beyond certain limits are subject to sale by the bankruptcy trustee.  Fortunately for the individual, there are a large number of assets, most commonly held by individuals facing financial difficulty, that are subject to protection, including residences and personal belongings.  Most individuals who would consider filing for Chapter 7 conclude their case with most of their personal property intact.

Chapter 13

Chapter 13 provides an opportunity for individuals with secured debts, like mortgages or car loans, to keep their assets safe.  Unlike Chapter 7, where unsecured debt is simply eliminated and collateral is liquidated on secured debts, in Chapter 13 both unsecured and secured debt is discharged upon completion of a court-supervised repayment plan.  These payment plans consolidate all outstanding debt into a single affordable payment.  The payment plan may last from three to five years depending on the circumstances of the individual.

Chapter 11

Chapter 11 is an extremely versatile tool in the hands of an experienced bankruptcy practitioner.  Both individuals and businesses can take advantage of Chapter 11.  For individuals who choose Chapter 11, those persons can take control of the liquidation or reorganization process, depending on the goal, to a degree that is simply not available under either Chapters 7 or 13 since those debtors can generally act as their own trustee as “debtors in possession.”   For businesses, Chapter 11 may be the best way to reorganize a company’s debts and operations.  Under Chapter 11, filing business entities can seek the time and breathing room needed to get the best price for assets they seek to liquidate while eliminating much or all of their unsecured debt, or to obtain financing necessary to weather a financially difficult period.

Businesses

Businesses like individuals have options when facing extreme financial difficulty.  The choice usually depends on whether the owners believe that the company can make a turnaround, or in the case of closely held businesses, how closely the individuals’ financial wellbeing is interlinked with the business.  Businesses can choose to either liquidate all of their assets ending the business in Chapter 7 or attempt to reorganize the business under a Chapter 11 bankruptcy plan.  In both cases, bankruptcy for businesses pose special challenges requiring experienced counsel.   

Please contact us at (847) 590-8700 to discuss how KDAO may be of service in your legal matter.