It is sometimes said that filing a bankruptcy is a last resort. This is not always right, for bankruptcy is truly a uniquely compassionate, powerful, even-handed, salutary area of law that is aimed at providing relief from overwhelming debt for ordinary citizens, working folks, farmers, families, small business owners, as well as businesses in financial trouble. A properly prepared bankruptcy can eliminate or reduce your debt, preserve your property, give you peace of mind, and provide you with a new beginning, a fresh start. Our firm has been helping clients through bankruptcy for more than 25 years.
Bankruptcy law provides for the reduction or elimination of most debts, and can provide time to repay those debts that will not be discharged (eliminated). It also enables individuals and organizations to repay secured debts — typically mortgage debts (secured by real estate) and vehicles pledged as collateral — on more favorable terms.
Bankruptcy comes in five varieties:
- Chapter 7 provides for the cancellation of unsecured debts, such as credit cards and personal (signature) loans. Secured debt is not affected — the collateral (the property pledged) remains in the borrower’s possession as long as timely payments are being made. Chapter 7 is always available to individuals with primarily business debts and corporations, and to individuals who meet certain income requirements.
- Chapter 9 deals with the reorganization of municipalities and related local entities, like county-owned hospitals and school districts. Individuals and corporations cannot file bankruptcy under Chapter 9.
- Chapter 11 is the most comprehensive and complex chapter of the Bankruptcy Code, providing different options to reorganize debt, repaying some debts, cancelling others, and restructuring the remainder. Although individuals can file for Chapter 11 relief, the complexity, high filing fees, and administrative costs make Chapter 7 or Chapter 13 bankruptcies more appropriate for most individuals.
- Chapter 12 provides for the restructuring of debts for family farmers, including family-owned corporations. It offers a very powerful set of tools for restructuring farm indebtedness and is the most successful reorganization chapter, albeit limited to farmers.
- Chapter 13 permits the debtor to eliminate many debts and repay others over a period of three to five years. It may also permit a reduction in principal owed on secured debts, or the elimination of these debts altogether and can be used to structure a repayment plan for debts that cannot be eliminated (discharged) in bankruptcy. Only individuals may file under this chapter.
Especially if you are currently facing foreclosure on your home or other real estate, collection lawsuits, garnishment of wages, creditor harassment, bankruptcy may be the best option for keeping your property, freeing yourself of debt, and beginning with a clean slate. We will carefully analyze your specific circumstances, explain and help you evaluate all your options, and answer all your questions and concerns before deciding which option is right for you. There is no charge for this initial free appointment.
Our firm has represented various small and larger businesses, assisting such creditors and explaining creditors’ substantive and procedural rights when a debtor files for bankruptcy. Creditors need not throw up their hands once a bankruptcy is filed. When repayment of a legitimate debt is at stake, a creditor is urged to consult knowledgeable and experienced bankruptcy counsel. A creditor does not have to absorb the loss without first seeking the opportunity to mitigate or alleviate the loss. There are many ways that Vermont creditors can try to recover partial or total amounts owed by clients who are filing Chapter 7, Chapter 11, Chapter 12, or Chapter 13 bankruptcies. The higher the stakes, the more worthwhile it is to examine all possible defenses.
Your options as a creditor may include:
- A creditor may assert an “administrative expense” priority claim for goods received by the bankrupt customer within 20 days of a bankruptcy filing.
- A creditor may assert a “reclamation claim” for goods delivered to an insolvent customer within the 45 days before a bankruptcy filing.
- A creditor may assert rights as a “lien holder” with regard to special classifications of supplies.
- A creditor may assert a right to compensation as an “essential supplier” or “critical vendor.”
- A creditor may pursue priority litigation versus other lien holders, including secured creditors, taxing authorities and landlords.
- A judge may grant relief from the automatic stay or except your debt from the discharge if it can be shown that a debtor is committing fraud or acting in bad faith.
Our firm can also defend you should a bankruptcy trustee seek to recover as a preferential payment or fraudulent transfer money that the debtor paid you or goods that you recovered on a legitimate debt before the debtor filed bankruptcy.
In addition, we represent commercial and retail clients outside bankruptcy in the collection of commercial debt, secured and unsecured, for small and large businesses, contractors, subcontractors, banks, lenders, commercial landlords and equipment lessors. On your behalf we can undertake:
- Construction collections – filing and enforcement of mechanic’s lien claims, and labor and material payment bond claims
- Replevins – repossession and recovery of collateral from defaulting commercial debtors for lessors and other secured creditors
- Litigation − prosecution of debt collection civil actions in state and federal courts and before alternative dispute resolution forums (arbitration, mediation), and defense against commercial debtor’s counterclaims.
Contact us to schedule a free consultation to protect your rights as a creditor rather than risking total loss through a customer’s bankruptcy.
Glinka & Schwidde, through its offices in Moscow and St. Petersburg, Russia, also offers a full range of legal services in International law and the law of the Russian Federation, including:
- representation of debtors, creditors, and bankruptcy trustees in cross-border bankruptcies under Chapter 15 of the U.S. Bankruptcy Code,
- negotiation, drafting, review, revision, and judicial enforcement of international (cross-border) contracts, agreements, and other commercial arrangements,
- representation of creditors and debtors in international forums, including arbitration, mediation, and litigation,
- consultation and representation of appellants (applicants) before the European Court of Human Rights,
- handling all aspects of commercial, criminal, and other cases within the Russian Federation.
Gleb Glinka, who supervises our offices in Moscow and St. Petersburg, Russia, is admitted to practice both as an attorney in Vermont and U.S. federal courts and as an attorney (advocate) in all courts of the Russian Federation.