Case Results

Chapter 11 for Individuals: Save Hundreds of Thousands of Dollars by Stripping and Cramming Down Mortgages!

We consulted with a couple who owned 6 real properties , including their homestead. Each property was valued at less than the respective 1st mortgage, and in several instances, there was a 2nd mortgage, as well as other encumbrances, such as judgments liens, municipal liens and association claims of lien.

Collectively, the clients’ debt exceeded $3.6 million, which included $2.4 million of unsecured and undersecured claims. We filed an individual Chapter 11 bankruptcy case, and we were able to reduce the 1st mortgages down to the value(s) of each property and remove all 2nd mortgages and other encumbrances. In many instances, we were able to successfully propose new 30 year payment terms, at low interest rates.

Furthermore, with regard to the $2.4 million of unsecured and undersecured claims, we were able to propose a repayment plan of just over 1%, over 5 years, in order to discharge the remaining debt.

Multiple Mortgages? Modify Them in an Individual Chapter 11 to Save Your Home and Investment Properties

We consulted with an individual who owned 5 real properties, including his homestead. Each property was valued at less than the respective 1st mortgage.

Collectively, the client’s debt exceeded $2.3 million, which included $915,000.00 of unsecured and undersecured claims. We filed an individual Chapter 11 bankruptcy case, and we were able to reduce the 1st mortgages down to the value(s) of each property that could operate on a cash-flow positive basis and remove all 2nd mortgages. For the property that could not operate on a cash-flow positive basis, the property was abandoned to the secured creditor(s) and the personal liability will be discharged.

With regard to the $915,000.00 of unsecured and undersecured claims, we were able to propose a repayment plan of 2.4%, over 5 years, in order to discharge the remaining debt.

How to Save Your Business’ Assets in a Chapter 11 Bankruptcy

We consulted with a business that was a manufacturing plant that had heavy equipment. The equipment was financed through secured lenders. The company had numerous unsecured trade creditors, as well. Due to the downturn of the economy, the company was unable to keep current in its payments, and a creditor obtained a judgment and was about to execute and take all of the assets of the company.

We filed a Chapter 11 bankruptcy on an emergency basis, and used the protections of the automatic stay to stop the execution of the company’s assets. We were able to re-amortize the secured loans, which enabled the company to retain all of its assets. We also restructured the payments to the unsecured creditors, allowing the company to repay those debts over 5 years.

The company was able to reorganize and continue operating with a new schedule of payments to its creditors.

Is Your Business Closing? Obtain Maximum Liquidation Value for Your Company’s Creditors Through an ABC

We consulted with a business that was forced to ultimately close due to an inability to pay its debts when they came due. Numerous creditors filed lawsuits and obtained judgments against the company. The company retained us to assist with a liquidation of its assets, so that the value to the creditors could be maximized and so that creditors’ claims could be liquidated in one venue.

We recommended that the company proceed with an Assignment for the Benefit of Creditors, which is a procedure for the administration of insolvent businesses that ensures full reporting to creditors and equal distribution of assets according to priorities established under Florida law. The Assignment for the Benefit of Creditors was filed and allowed the business to wind down. A court-appointed Assignee sold the assets of the business to a third party, and a maximum value was derived for the benefit of the company’s creditors.

Corporate Chapter 11 Too Costly? Sell Your Company as a Going Concern Through an ABC

We consulted with a medical practice that had substantial liability associated with old equipment leases and other obligations. One of the company’s creditors filed a lawsuit. The value of the company’s assets was far less than the total amount of its liabilities. If sold as a going concern, the company would derive much more value for its creditors than if its assets were liquidated. However, the cost of a Chapter 11 was prohibitive.

We therefore recommended an Assignment for the Benefit of Creditors proceeding, where a third-party Assignee would sell the assets of the company, as a going concern, to the physician/medical director of the business. The sale of the assets would be for the market value as a going concern, which was still significantly less than the debt owed by the company. The sale of the assets would be free and clear of all liens, claims and encumbrances.

Through the Assignment for the Benefit of Creditors proceeding, the physician/medical director was able to purchase the assets and continue with the operation of the company, with no interruption. The creditors received more than they would have received in a Chapter 7 bankruptcy liquidation or a Chapter 11 bankruptcy reorganization.

Chapter 13 – A Great Option When You Own a Lot of Property

A husband and wife hired us to file a Chapter 13 bankruptcy. They had $29,154.80 in assets, including 4 cars that they owned outright. They had $138,667.07 in unsecured debt, and $209,538.82 in secured debt. The clients intended to surrender their homestead in the bankruptcy. As a result, they were entitled to a $8,000.00 wild card exemption, a $2,000.00 personal property exemption, and a $2,000.00 vehicle exemption, a total of $12,000.00.

The clients will pay a total of $15,481.26 to their unsecured creditors over 5 years, and discharge a total of $332,724.63.

The clients are thrilled that they are able to have a manageable monthly payment and that they will be able to keep all 4 of their cars. They were originally very hesitant to file bankruptcy because they feared that they would not be able to keep all of their cars.

Save Your Investment Property in a Chapter 13 Bankruptcy

A client consulted with us because she was trying to save her investment property. She originally filed a Chapter 13 bankruptcy with another law firm, but the case was dismissed. Her investment property was worth $90,000.00, and it had a $131,860.00 mortgage encumbering it.

We filed a new Chapter 13 bankruptcy for this client, and successfully negotiated a cram down on the investment property’s mortgage. The payments are going to be stretched out over 8 years, and the interest rate was reduced to 5.25%. This was a very successful case because typically you cannot extend the terms of a mortgage more than 5 years unless the bank agrees to the terms.

In addition, our client was able to surrender her homestead property, discharge $486.687.59 of secured debt, and discharge $142,121.96 of unsecured debt. She makes a monthly payment to her unsecured creditors of $279.60. Her unsecured creditors will receive a total of $14,818.80.

Cure Your Mortgage Arrears in a Chapter 13 Bankruptcy in Order to Keep Real Property

A client consulted with us in an effort to save her homestead property and investment property. Her children lived in her investment property, so she didn’t want to lose it. However, the client hadn’t paid her mortgage payments or real estate taxes in years on either property.

We filed a Chapter 13 bankruptcy for this client. We were able to cure and maintain her monthly obligations and save both properties. The client was able to maintain the regular monthly payment of $342.78 a month on her homestead, and cure the $22,881.12 in arrearages over 5 years. She was also able to save her investment property by making the regular monthly mortgage payment, the regular monthly homeowner’s association payment of $235.00, and curing the $17,884.38 in arrearages over 5 years. This client did not have any unsecured debt.

We call this type of case a cure and maintain plan. It is a strategic Chapter 13 that allows a debtor to force a monthly payment on a bank without its consent, and allows a debtor to become current at the end of the 5 year plan.

You Can File a Personal Chapter 7 Bankruptcy and Keep All of Your Assets!

We consulted with a married couple who owned their homestead, 2 cars valued at $3,500.00 (both owned by the husband), and other personal property worth $10,742.74.  They had exempt retirement accounts worth $6,074.72.

Collectively, our clients’ debt totaled $257,793.66, which included $82,829.32 of unsecured claims, mostly comprised of medical bills and credit card debt.

Both clients were employed.  Their monthly expenses ($4,169.22) exceeded their monthly income ($3,952.04) by $217.18.  We filed a joint Chapter 7 bankruptcy case.

Our clients owned non-exempt personal property worth $8,168.02, and were entitled to personal property exemptions totaling $3,000.00.  As such, they were $5,168.02 over the allowable exemption limit.

Our clients were thrilled to learn that the trustee abandoned her interest in all of their non-exempt property and filed a report of no distribution.  Our clients got to keep 100% of their assets and discharged 100% of their debt!

This case was a good example of disproving the myth that all debtors lose their personal property in Chapter 7 liquidations.

Judgments Entered Against You?  Have No Fear – They Can Be Discharged in a Personal Chapter 7 Bankruptcy

We consulted with a divorced woman who rented her home, financed a car that was worth less than the amount due on the loan, and owned personal property valued at $1,850.84.

Our client’s debt totaled $63,895.66, which included $48,896.26 of unsecured claims, mostly comprised of medical bills and credit card debt.  One of the credit card companies had obtained a judgment against our client.

Our client was employed.  Her monthly expenses ($3,964.96) exceeded her monthly income ($3,746.03) by $218.93.  We filed a Chapter 7 bankruptcy case.

Our client owned non-exempt personal property worth $1,850.84, and, since she was entitled to personal property exemptions totaling $5,000.00, all of her personal property was exempt.

Our client was relieved when the trustee filed a report of no distribution.  She got to keep 100% of her assets and discharged 100% of her debt (including the judgment)!

This case was a good example of a basic personal Chapter 7 case.

Hire an Attorney to File Your Personal Chapter 7 Bankruptcy to Ensure that all Available Exemptions are Claimed

We consulted with a married man who had a wife who was not going to join him in a bankruptcy, and 2 minor children.  He came to see us because one of his creditors had garnished his bank accounts.  He and his wife rented their home.  While most of the couple’s personal property was jointly owned, our client owned 1 car valued at $4,500.00, and other personal property worth $6,260.62.  Since our client qualified as the head of his family, his wages ($1,350.62 of the $6,260.62) were exempt under Florida law.

Our client’s debt totaled $114,914.29, which included $111,446.07 of unsecured claims, comprised of credit card debt, 3 final judgments, a deficiency on a car lease (the car was returned because our client could no longer afford to make the payments), and several personal loans.

Our client was employed, but his wife was not.  Their monthly household expenses ($5,116.95) exceeded their household monthly income ($4,811.00) by $305.95.  We filed a Chapter 7 bankruptcy case.

Our client owned non-exempt personal property worth $9,410.00, and was entitled to personal property exemptions totaling $6,000.00.  As such, he was $3,410.00 over the allowable exemption limit.

Our client was thrilled to learn that the trustee abandoned his interest in all of his non-exempt property and filed a report of no distribution.  Our client got to keep 100% of his assets and discharged 100% of his debt!

This case was a good example of disproving the myth that all debtors lose their personal property in Chapter 7 liquidations.  It also showed why it is important to consult with a bankruptcy attorney rather than trying to file bankruptcy on your own.  This client was able to claim an additional exemption that he otherwise might not have known about because he was smart enough to hire our law firm.

Repurchasing Your Interest in Personal Property in a Personal Chapter 7 Bankruptcy

We consulted with a divorced man who rented his home, owned a car that was worth $9,000.00, and owned additional personal property valued at $4,338.44.

Our client’s debt totaled $288,179.42, and was 100% unsecured.  It was mostly comprised of a deficiency on real property that he used to own that was sold in a foreclosure sale, as well as some medical debt, and personal loans.  Besides the foreclosure judgment, there was 1 other judgment that had been entered against our client.

Our client was employed.  His monthly expenses ($3,027.34) exceeded his monthly income ($2,841.97) by $185.37.  We filed a Chapter 7 bankruptcy case.

Our client owned non-exempt personal property worth $13,338.44, and was entitled to personal property exemptions totaling $6,000.00.  As such, he was $7,338.44 over the allowable exemption limit (mostly due to the value of his car).  This was something that we discussed with our client in detail before filing his bankruptcy case.  Because he was made aware that if he wanted to keep his car (and all of his other personal property) that he would likely have to repurchase his interest in those items from the bankruptcy trustee, he made sure he had access to money that would allow him to settle with the trustee.

At the Meeting of Creditors, we reached an agreement with the trustee, whereby our client paid him $7,000.00 to keep his car and the rest of his personal property.  Our client got to keep 100% of his assets, his creditors go to share in the $7,000.00 recovery on a pro rata basis (after the trustee recovered his fees and costs), and the remainder of his debt was discharged.

This case was a good example of why it is important to hire an attorney (and the right attorney who has an excellent relationship with the trustees) to file your bankruptcy.  We have attended countless Meetings of Creditors where we have witnessed debtors in the same situation as our client who are visibly shocked to learn for the first time that they will either have to pay money to the trustee in order to keep over-exempt assets or surrender said assets.

Personally Guaranteed business debt?  Don’t Worry – Discharge it in a Personal Chapter 7 Bankruptcy

We consulted with a single woman who rented her home, and owned personal property valued at $2,186.41.

Our client’s debt totaled $288,179.42, all of which was unsecured.  The majority of the debt was comprised of business credit card debt and personal guarantees that she had incurred while owning a business that had recently stopped operating.

Our client was employed.  Her monthly expenses ($2,810.67) exceeded her monthly income ($2,206.97) by $603.70.  We filed a Chapter 7 bankruptcy case.

Our client owned non-exempt personal property worth $2,186.41, and, since she was entitled to personal property exemptions totaling $5,000.00, all of her personal property was exempt.

Our client was relieved when the trustee filed a report of no distribution.  She got to keep 100% of her assets and discharged 100% of her debt !

This case was a good example of filing a personal Chapter 7 case to discharge business-related debt.

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  Leiderman Shelomith
  Bankruptcy Attorneys

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  Fort Lauderdale, FL 33312
  Phone: 954-920-5355
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