Individual Chapter 11 Cases:
They're Real and They're Spectacular


The individual Chapter 11 bankruptcy case.  Most individuals who are not in the legal industry have no idea what that means.  Many individuals, including those in the legal industry, have stated that such a thing doesn't even exist.  Others, including attorneys (even bankruptcy attorneys), are terrified of the concept.  However, the individual Chapter 11 bankruptcy case is a powerful tool that can help individuals achieve results that are just not possible in other types of bankruptcy cases.

So, what is an individual Chapter 11 bankruptcy case?  It is a bankruptcy proceeding filed under Chapter 11 of the United States Bankruptcy Code by an individual (or an individual and his/her spouse), rather than by a business.  Whereas the vast majority of bankruptcy cases filed by individuals are Chapter 7 liquidations or Chapter 13 reorganizations, Chapter 11 provides an alternate method for an individual to reorganize his or her finances.  Contrary to what other attorneys and legal professionals have tried to argue to us, individuals are eligible to file a Chapter 11 bankruptcy case.  In fact, many of the provisions of Chapter 11 of the United States Bankruptcy Code are specifically tailored for individuals.

Many attorneys who handle business Chapter 11 cases or Chapter 13 cases are not aware of the countless nuances, pitfalls and benefits of the individual Chapter 11 case.  Numerous individual bankruptcy cases are filed as a Chapter 7 or Chapter 13 case, when a Chapter 11 case would instead bring about much greater benefits to these individuals.

So, what can an individual Chapter 11 bankruptcy case do?  Well, here are just some examples of the results that can be achieved in an individual Chapter 11 bankruptcy case, pulled from our own case files:
  • The modification of mortgages on 2 investment properties worth over $1 million each (including principal reductions), to affordable payment terms, while discharging over $1.2 million of unsecured debt, through a payment of 1.4% over 5 years.  This individual's entire real estate business hinged on the success of her individual Chapter 11 case.
  • The elimination of a second mortgage on a single mother's primary residence, while discharging over $400,000 of unsecured debt, through a payment of 3.2% over 5 years.  This individual had tried for several years to modify her second mortgage, to no avail, causing serious financial strain on her and her daughter.
  • The elimination of 3 junior mortgages/liens on a public employee's primary residence, along with the modification of a mortgage on an investment property (including a principal reduction), to affordable payment terms over a period of time greater than 5 years.
  • The modification of mortgages on 8 investment properties worth an aggregate of approximately $1.5 million (including principal reductions and the elimination of junior mortgages and liens), to affordable payment terms, while discharging over $1.5 million of unsecured debt, through a payment of 10% over 7 � years.  This individual invested heavily in the real estate market, suffering numerous losses, including the loss of his business, before being able to reorganize his finances.
  • The discharge of over $240,000 of unsecured debt, through a payment of 8.5% over 5 years, according to a payment schedule that took into account substantial future anticipated medical expenses for a cancer patient.
  • The discharge of over $6.3 million of unsecured debt, including deficiency claims for several failed real estate projects, through a payment of 0.47% over 5 years, including the settlement of a non-dischargeable claim over 10 years.
  • The elimination of over $960,000 of secured debt on a real property infested with Chinese drywall, whose value fell to less than $80,000.  This couple and their family had to move from their long-time family home, and were saddled with this debt before being able to discharge it in their Chapter 11 case.
  • The modification of mortgages on 14 investment properties for a high net-worth individual, worth an aggregate of approximately $3.6 million (including principal reductions and the elimination of junior mortgages and liens), to affordable payment terms, while discharging over $6.5 million of unsecured debt, through a payment of 5.6% over 5 years.
  • The elimination of a second mortgage on a cancer survivor's primary residence, while discharging over $168,000 of unsecured debt, through a payment of 5.9% over 5 years, according to a payment schedule that took into account substantial future anticipated medical expenses.
In the majority of these instances, the client was able to retain the majority (and many times all) of their real properties.  In all of these instances, the client was able to retain all of their personal property, including cash, bank accounts, furniture and valuable business interests.

Arguably, NONE of these results could have been achieved in a Chapter 7 or Chapter 13 bankruptcy case. 

These are but a few examples of what an individual Chapter 11 case can do.  Having an experienced individual Chapter 11 bankruptcy attorney on your side can give you a distinct advantage.

If you think that you or someone you know may benefit from an individual Chapter 11 case, or if you are an attorney who has a client that may benefit from consulting with an experienced individual Chapter 11 bankruptcy attorney, contact Leiderman Shelomith, P.A. today for a no-cost consultation.

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Attorney Spotlight


Zach Shelomith is among the preeminent individual Chapter 11 bankruptcy attorneys in the Southern District of Florida.  He handles personal and corporate bankruptcy matters, Assignments for the Benefit of Creditors, bankruptcy litigation and student loan law matters.

Prior to forming the firm with Jonathan Leiderman, 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 has spoken at numerous legal seminars on the subject of individual Chapter 11 cases, and is honored to be the only South Florida panelist who will be speaking about individual Chapter 11 bankruptcy cases at the American Bankruptcy Institute's 2015 Caribbean Insolvency Symposium, which is being held next month in Grand Cayman, Cayman Islands.  Zach was also invited to speak at an individual Chapter 11 seminar sponsored by the Broward County Bar Association's Bankruptcy Section on April 23, 2015.

Zach also represented the Debtors in one of the few individual Chapter 11 bankruptcy cases in the United States Bankruptcy Court for the Southern District of Florida that determined the issue of whether the "Absolute Priority Rule" still applies in individual Chapter 11 bankruptcy cases after the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Zach was recently selected as a Florida Super Lawyer, a distinction given to only up to 5% of attorneys in the State of Florida and he is AV Rated by LexisNexis Martindale-Hubbell.

Zach resides in Hollywood, Florida, with his wife Brooke, and his children, Sophie and Landon.

Practice Areas

Personal Chapter 7

There are numerous circumstances that may warrant a Chapter 7 bankruptcy, the most common type of case filed by individual consumers.
 
Many people are unaware that a Chapter 11 bankruptcy filing is available to individuals.

Personal Chapter 13

There are a number of reasons why a Chapter 13 filing may be right for you.

We discuss all options with you and we provide full implementation of the best strategy moving forward.

Corporate Chapter 7

If your business entity is facing overwhelming debt, a corporate Chapter 7 bankruptcy filing may be the solution to its troubles.

Corporate Chapter 11

A business that needs to restructure its finances is offered various beneficial tools in a Chapter 11 filing.

Creditor Representation

Creditors of bankrupt debtors have several avenues for recovering what is owed to them.


Assignment for the Benefit of Creditors

"ABC" is often the most efficient and cost-effective method for accomplishing the goals of a business that is in financial distress.

Upcoming Events


January 28, 2015 - Bankruptcy Bar Association for the Southern District of Florida - Brown Bag Seminar:  Hot Topics in Consumer Bankruptcy Law - Zach B. Shelomith is a panelist.


February 5, 2015 through February 7, 2015 - American Bankruptcy Institute's 2015 Caribbean Insolvency Symposium (http://www.abiworld.org/CIS15/) - Held at the Westin Grand Cayman in Grand Cayman, Cayman Islands - Zach B. Shelomith is going to be a panelist.



He is the only panelist from the State of Florida who will be speaking at the session about individual Chapter 11 bankruptcy.  The moderator at that session will be Judge A. Jay Cristol, Chief Emeritus of the U.S. Bankruptcy Court for the Southern District of Florida.



April 23, 2015 - Broward County Bar Association, Bankruptcy Section - Issues in Individual Chapter 11 cases - Zach B. Shelomith is a panelist.

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. Felipe Plechac-Diaz joined the firm as an associate attorney in 2014.  The firm began representing borrowers with their federal, state, and private student loan matters in 2014, including the defense of student loan lawsuits.

 

The firm's attorneys, who have 38 years of combined legal experience, have been recognized as a South Florida Legal Guide Up and Comer, a Super Lawyer Rising Star for the State of Florida, a Florida Legal Elite Up and Comer, and a Florida Legal Elite. 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. The firm also represents borrowers in all aspects of student loan law, including federal, state, and private student loans. 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 and student loan matters throughout the entire State of Florida.

 

Disclaimer 

 
The information you obtain in this newsletter is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters, and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.