“Out of Bankruptcy Work-Outs”

Sometimes bankruptcy may not be the best alternative for a client facing financial problems.  C. Scott Kirk will evaluate your case and determine your best options, and if bankruptcy can be avoided, then that option will be pursued.  In these circumstances, C. Scott Kirk will contact your creditors and attempt to reach financial settlements or “work-outs” with your creditors.  Attempting to settle with your creditors may be your best alternative.

Chapter 7

Chapter 7 is referred to as the “fresh start” or “liquidation” bankruptcy.  This form of bankruptcy allows a consumer to receive a discharge of most debts and obligations, and in exchange, the consumer allows a trustee to liquidate any of their non-exempt property.  However, this does not mean that the client will lose all their property.  A consumer can maintain certain amounts of property, such as a house, car, most retirement savings, and furnishings after the bankruptcy. 

Chapter 7 allows a business to cease operations in an orderly manner.  A trustee is assigned to liquidate the assets of the business and disburse the money to creditors.  

Chapter 13

Chapter 13 is a bankruptcy mainly for consumers who wish to reorganize their debts.  This form of bankruptcy is for a consumer who wishes to save their home, car or other assets.  With the help of C. Scott Kirk, the client will prepare a plan of reorganization that will last for three to five years.  Once the plan is approved by the Court, the client will make payments to a trustee and certain creditors in accordance with the approved plan.  Once the client has completed the plan, the Court will issue a discharge of most remaining debts to the client.  If you have fallen behind on your mortgage payments, car payments, or owe taxes, a Chapter 13 may be the best option to solve your debt problems.

Chapter 11

 Chapter 11 is a bankruptcy that is used mainly by businesses to reorganize its debts and continue operating.  A business that files a Chapter 11 normally does not have a trustee assigned to manage the case, however, the United States Bankruptcy Administrator will be assigned to supervise the case.  With Court approval, a business can sell property, terminate burdensome contracts and leases, and shed certain debts.  The business will create a plan of reorganization that will provide repayment of secured debts, taxes, and unsecured debts.  All plans must be approved by the Court and accepted by creditors.

Chapter 11 is not used exclusively by businesses.  In certain circumstances, a consumer or individual may find that Chapter 11 may be their best option.

Chapter 12

Chapter 12 is a bankruptcy that is used by qualifying farmers and commercial fisherman.  In many aspects, Chapter 12 functions like a Chapter 13.  The main difference is that the client is not confined to the requirements of plan that must be completed in three to five years.  In a Chapter 12, a trustee is assigned to supervise the case.  The client will present a plan that restructures secured debts, pays tax debt, and pays a portion or all unsecured debts.  If approved by the Court, the client will pay creditors according to the terms of the plan.