Practice Areas

Pagter and Miller provides both Debtor and Creditor Representation in Bankruptcy Matters.
A Debtor is a person who has filed a petition for relief under the Bankruptcy Code.
A Creditor is one to whom the debtor owes money or who claims to be owed money by the debtor.

Chapter 7, (Liquidation) contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor's assets. These cases are called "no-asset cases." A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, if the debtor is an individual, he or she receives a discharge that releases him or her from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed. Amendments to the Bankruptcy Code enacted in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 require the application of a math-driven income and expense "means test" to determine whether individual consumer debtors qualify for relief under chapter 7. If such a debtor's income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief.

Chapter 13, (Adjustment of Debts of an Individual With Regular Income) is designed for an individual debtor who has a regular source of income and who has limited unsecured debt and approximately $1million in total secured (mortgage-type) debts. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a "plan" to repay creditors somewhere between 0-100% of their debts over time – usually over three to five years. Chapter 13 may be the only alternative for consumer debtors who do not qualify for chapter 7 relief under the means test. At a confirmation hearing, the court either approves or disapproves the debtor's repayment plan, depending on whether it meets the Bankruptcy Code's requirements for confirmation. Chapter 13 is very different from chapter 7 since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based sometimes upon yet another math-based income and expense test, and sometimes upon the debtor's anticipated income over the life of the plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The discharge is also somewhat broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.

Chapter 11, (Reorganization) ordinarily is used by commercial enterprises or individuals with high net worth or incomes, such as from ownership of several real properties, or individuals who cannot qualify for chapter 13.  Debtors seek to repay creditors concurrently through a court-approved plan of reorganization. The chapter 11 debtor usually has the exclusive right to file a plan of reorganization, i.e. to deal with creditors’ claims, for the first 120 days after it files the case, and must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan. The court ultimately approves (confirms) or disapproves the plan of reorganization. Under the confirmed plan, the debtor often can reduce its debts by repaying a portion of its obligations and discharging others. The debtor also can terminate burdensome contracts and leases, sell assets, and rescale its operations in order to return to profitability. Under chapter 11, the debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.