What does the term “surrender” mean in bankruptcy law? Surrendering property in bankruptcy involves secured loans, which are loans that are guaranteed by a piece of property, such as a house or car. In bankruptcy cases and many others, people typically surrender property when they can no longer make loan payments. → Read More
Understanding Cramdown in Bankruptcy One significant advantage is the ability to modify the rights of a secured creditor. This means the debtor can actually change the terms of a contract with a creditor through bankruptcy in a provision generally referred to as cramdown. The cramdown provision reduces the amount owed to the fair market value of the collateral that secures the debt. → Read More
Converting From One Bankruptcy Chapter to Another The bankruptcy term conversion refers to the process by which a debtor, creditor, or bankruptcy trustee transfers a pending bankruptcy case from one chapter to another. Conversion may occur for a number of reasons, and may be voluntary or involuntary depending on the circumstances. Follow this link for detailed information. → Read More
What will happen to my stocks or bonds in a business bankruptcy? When a business goes bankrupt, there will be winners and losers amongst its creditors and stockholders. Those who hold debt, like bondholders, will stop receiving interest and principal payments while the company goes through bankruptcy. → Read More
What happens to my company if I file for bankruptcy? A company going bankrupt is not just a source of anxiety for its leaders. Investors, creditors, and employees all share the same anxiety and stress. When a company can no longer pay its bills or even remain fully operational, it will file a Chapter 7 or Chapter 11 bankruptcy. What happens after filing for bankruptcy depends on which type the company has opted for. → Read More
Why would a company choose to file Chapter 11? Most companies prefer Chapter 11 when facing bankruptcy. It allows a business owner to create a plan for repayment and/or to reorganize and restructure debts, while continuing its normal business dealings. However, a few activities are not possible. → Read More
What is the role of the SEC in Chapter 11 bankruptcies? When a business is struggling with debts, that business may opt for a Chapter 11 bankruptcy. Essentially, this is a reorganization bankruptcy in which the business renegotiates and restructures many of the debts that they owe so that they can get the business back on track and ideally begin operating profitably. Often, businesses operate for many years in Chapter 11, and when a business does declare Chapter 11, it can have a major impact on the value of the investment that shareholders and stockholders have made in the company. As such, while a Chapter 11 bankruptcy is going to be primarily governed by the US federal bankruptcy code, the Securities and Exchange Commission (SEC) may also play a role in setting the rules. → Read More
Removing a Bankruptcy From Your Credit Report For those with a filing listed on their credit report, it’s important to take measures to have it removed as soon as it is possible – if and when there is a legitimate reason to do so. Follow this link for everything you need to know about removing a bankruptcy from a credit report. → Read More
Suing Someone Who Just Filed Bankruptcy Many times bankruptcy is filed in order to stop a lawsuit. Once a person or business files for bankruptcy, there will be an “automatic stay” put on the debtor’s debts. The automatic stay is a legal tool that protects the person you are suing. This means that if the debtor lists you as a creditor (and sometimes even if they don’t), you may have no legal right to collect a judgment from him, even in pending litigation. → Read More
Can I get into trouble with balance transfers in the bankruptcy process? Balance transfers are generally seen as a new debt, and if you don’t have the present intention to pay the new debt at the time it was incurred, it might be determined to be the result of fraud and you may not be able to have it discharged when you file bankruptcy. → Read More
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