Bankruptcy Law

The revisions to the Bankruptcy Code enacted in April 2005 took effect, for the most part, in October 2005. These revisions impose new hurdles to the ability of consumers to obtain discharges under chapter 7, and increase reporting and other requirements for all debtors and their lawyers. I am no longer accepting clients for the purposes of filing bankruptcy petitions. I am available to consult or represent parties in bankruptcy litigation matters, such as preference actions or non-dischargeability complaints.

I also represent small businesses in litigation, and am familiar with the bankruptcy issues that frequently arise. For example, when someone who owes you money files a bankruptcy petition, your rights to collect on the debt are automatically enjoined, or "stayed," until further court order, often permanently. Actions such as foreclosures, wage garnishments, pending lawsuits, car repossessions, and dunning letters must all cease.

Because the policy of the Bankruptcy Code is to provide debtors with a fresh start, many creditors will find their debts discharged permanently, without getting any further payments from the debtor. Creditors do have options in some circumstances, however. Your rights as a creditor vary depending upon factors such as the following:

the bankruptcy chapter filed;

whether the debt was used to buy consumer goods;

whether it is a secured debt;

the amount and timing of the debtor’s recent payments to you; and

whether you have challenges to the discharge of the debt.

The new law may result in more debtors starting, but failing to finish, their bankruptcy processes. In the case of dismissal of the case, the automatic stay is dissolved and state court proceedings can resume.