Greetings!
We believe that everyone deserves a fresh start. There are legal solutions available that can help you achieve that fresh start. Through this monthly newsletter, it is our goal to offer you information, as well as solutions, garnered over 35 years of combined legal experience practicing bankruptcy law. We understand the seriousness of choosing to file bankruptcy, and we want to give you power through knowledge to help you make that decision. Please contact us for a no-cost consultation.
Sincerely,
|
|
|
Individual Chapter 11 Bankruptcy Filing
|
Most people associate Chapter 13 bankruptcy with personal reorganizations, and Chapter 11 bankruptcy with corporate restructures. However, an experienced bankruptcy lawyer can assist you with filing an individual Chapter 11 bankruptcy, and help you take advantage of a more meaningful debt restructuring as a consumer.
Why would an individual file a Chapter 11 bankruptcy?
Many debtors do not pass the means test (which determines eligibility to file a Chapter 7 bankruptcy) because they have too much disposable income after paying for their necessary expenses. Additionally, the debt limits for a Chapter 13 filing are not always sufficient for a consumer who has borrowed a significant amount of money. As of April 1, 2013, the unsecured debt limit is $383,175.00, and the secured debt limit is $1,149,525.00. Thus, an individual debtor may have unsecured or secured debt that exceeds the Chapter 13 debt limits. An individual Chapter 11 bankruptcy ,where there are no debt limitations, provides the best option for this type of consumer.
What are the benefits of an individual Chapter 11 filing?
An individual Chapter 11 case is designed to handle even the most complex problems of a consumer with a large amount of debt. Below are several benefits a consumer can receive from an individual Chapter 11:
- The means test does not apply to individual debtors in Chapter 11 cases, so any individual is eligible to file a Chapter 11 bankruptcy.
- There is no strict commitment period in Chapter 11 cases for the length of a repayment plan, so a debtor is not limited to either a 3 year repayment plan or a 5 year repayment plan (as there is in Chapter 13) - plans may last shorter or longer.
- In Chapter 11, an individual debtor can modify secured debts, such as car loans and certain mortgages. There is a time restriction in Chapter 13 cases where the debtor must have financed a vehicle for more than two and a half years before the loan can be reduced to the value of the car. In Chapter 11 cases, there is no time restriction.
- In most cases, the individual debtor in a Chapter 11 bankruptcy remains in possession of his/her assets, and will continue to manage his/her finances under the supervision of the court. This allows the individual debtor the opportunity to improve his/her financial situation, which will, in turn, benefit his/her creditors.
- Less disruption in the calculation of plan payments for individual debtors. An individual with income in excess of the median for the state does not have to apply the Internal Revenue Service standards in calculating available income. This allows a debtor to propose a repayment plan that more closely conforms to his/her actual budget than in Chapter 13
- Plan payments may be delayed until confirmation. Debtors may be required to pay secured creditors adequate protection payments until confirmation, which protects the secured creditors from diminution in value of their collateral. In Chapter 13, plan payments begin 30 days after the filing date.
- Debtors can design Chapter 11 plans that classify creditors to allow for easier confirmation within reasonable limits.
What are the disadvantages of an individual Chapter 11 filing?
Chapter 11 bankruptcy cases are generally more expensive than Chapter 13 cases, due to the additional work involved. In addition, Chapter 11 requires voting by the creditors, and under-secured creditors can elect to be treated as fully secured in Chapter 11. However, these disadvantages are usually far outweighed by the benefits, savings, and convenience of Chapter 11.
If you are interested in learning more about an individual Chapter 11 bankruptcy filing, contact Leiderman Shelomith, P.A. today for a no-cost consultation.
|
|
|
The Bankruptcy Bar Association for the Southern District of Florida
Installation Dinner and Awards Ceremony.
Zach Shelomith to be installed as Treasurer.
October 18, 2013:
Broward County Bar Association Bench & Bar Convention 2013
Zach Shelomith will be one of the featured speakers.
|
|
Mortgage Lien Stripping and Cramdown in an Individual Chapter 11
|
|
A married couple came to Leiderman Shelomith, P.A. seeking relief from mortgage debt. The clients owned their primary residence and 7 investment properties. Each piece of real property had 2
mortgages. Three of the investment properties were not rented. The attorneys at Leiderman Shelomith, P.A. helped the clients file an individual Chapter 11 bankruptcy.
The value of the clients' home was less than the amount due on the first mortgage. While the first mortgage on their home could not be modified, we stripped the second
mortgage off of the property, and removed the lien from the home. The amount due on the second mortgage was added to the pot of unsecured claims.
The clients' 4 rented investment properties valued at amounts less than the balance(s) amounts due on the respective first mortgages on those properties.
Since these were investment properties, we were not only able to strip the second mortgages off of each property, but we were able to "cramdown" the first mortgages down to the value of each property. That meant that not only did the entire amount owed under each second mortgage get added to the pot of unsecured claims, but so did the portion of each first mortgage that was owed in excess of the value of each property.
Essentially, we helped the clients re-amortize their mortgages over 30 years at interest rates that were lower than what they were under the original mortgages. The clients were also able to surrender their non-rented investment
properties.
These clients entered bankruptcy having about $1.5 million of unsecured and under-secured debt. The attorneys at Leiderman Shelomith, P.A. were able to confirm a plan that allowed the clients to pay those creditors only about 1.1% of what was owed over 5 years, and saved these clients in excess of one million dollars.
If you are interested in learning more about an individual Chapter 11 bankruptcy filing, contact
|
|
 |
|
|
|
 Zach B. Shelomith is a founding Shareholder at Leiderman Shelomith, P.A. He handles personal bankruptcy matters, corporate bankruptcy matters, Assignments for the Benefit of Creditors, and bankruptcy litigation matters.
Prior to forming the firm, Zach served as a Judicial Intern to the Honorable A. Jay Cristol, Chief Bankruptcy Judge Emeritus for the Southern District of Florida. Zach obtained a B.B.A. from the University of Miami and a J.D. from the University of Miami School of Law, where he was awarded the American Bankruptcy Journal Prize. Zach commonly represents debtors, creditors, and Chapter 7 bankruptcy trustees in all aspects of bankruptcy representation. Zach has also spoken at legal seminars focusing on bankruptcy, including an individual Chapter 11 seminar. His Practice Areas Include: - Personal Bankruptcy
- Corporate Bankruptcy
- Assignments for the Benefit of Creditors
- Bankruptcy Litigation
|
We are pleased to share that Ashley Prager Popowitz, an associate attorney at Leiderman Shelomith, P.A., recently co-authored the article, Get Busy Stripping until the Eleventh Circuit Says Otherwise; which appeared on the front page of the Southern District of Florida Bankruptcy Bar Association Journal. Please click here to read Ashley's article.
|
About Leiderman Shelomith, P.A.
|
|
Leiderman Shelomith, P.A. was founded by Jonathan Leiderman and Zach Shelomith in 2003. The firm quickly built an excellent reputation across South Florida as a boutique bankruptcy law firm, handling both personal and corporate bankruptcy matters, including Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, as well as state court Assignments for the Benefit of Creditors. Ashley Prager Popowitz joined the firm as an associate attorney in 2009.
The firm's attorneys have been recognized as a South Florida Legal Guide Up and Comer, as a Super Lawyer Rising Star for the State of Florida, and as a Florida Legal Elite Up and Comer. Our attorneys are members of the National Association of Consumer Bankruptcy Attorneys, the American Bankruptcy Institute and the Bankruptcy Bar Association for the Southern District of Florida, among other organizations. The firm's attorneys are also frequent lecturers at seminars and community programs, speaking about bankruptcy law to attorneys and the general public.
The firm, Mr. Leiderman, and Mr. Shelomith, are AV® Preeminent Rated Attorney's, awarded by LexisNexis® Martindale-Hubbell®, for having obtained the highest possible peer-review rating for their ethical standards and legal ability.
The firm represents debtors, creditors and bankruptcy trustees in all aspects of bankruptcy cases, including litigation and appeals, handling both liquidations and reorganizations. Our office is conveniently located in suburban Fort Lauderdale, Florida, and is easily accessible from anywhere in Miami-Dade, Broward and Palm Beach Counties. We handle bankruptcy debtor cases across the Southern District of Florida, particularly in Broward, Miami-Dade, Palm Beach and Monroe Counties, and other bankruptcy cases throughout the entire State of Florida.
|
|
|
|
