Bankruptcy Law

Stop Foreclosure And Take Control Of Past-Due Mortgage Payments

We Can Help You Protect Your Investment And Defend Your Family's Home

Your house is more than just a roof over your head. It is the home where you raise your children, where you and your friends gather, and where your family feels safe and secure.

When unforeseen debts or other financial hardships threaten your ability to pay your mortgage and retain your home, it's important to remember that you have options.

At The Associates, in Florida, we can help you stop foreclosure proceedings and keep your family in their home. We go further in our representation to help you address the underlying issues that led to the default. David Merrill is in a unique position to help you as an attorney with over 19 years of bankruptcy experience and the owner of a respected law firm, let us help you.

Get The Information You Need to Make The Right Decision

"What is your intention with the home?" is a question mortgage collectors often ask, but it is not so easy to answer. Every financial situation is different, and there are many options for resolving mortgage issues. We provide you experienced and honest advice based on your individual circumstances before making any decision.

We can help you understand the benefits and consequences of every option, including:

• Filing for Chapter 7 bankruptcy
• Filing for Chapter 11 bankruptcy
• Filing for Chapter 13 bankruptcy
• Selling your home, including by way of a short sale
• Refinancing your loan
• Negotiating a loan modification
• Agreeing to a forbearance

You should never feel pressured to make an important financial decision that will affect your future and your family's, which is why we choose to offer free initial consultations. Schedule your consultation with our attorney by completing a confidential form online or by calling our offices in West Palm Beach at 561-877-1111. Se habla español tambien.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code when necessary.

Chapter 7 Is A Fresh Financial Start

We Have The Experience You Need

The Associates, we want to make your financial situation better without making your life any more complicated or stressful. We take the time to understand your goals and listen to your concerns. With our attorney's over 19 years of bankruptcy experience, you can trust that he will help you find the best solution.

What Do You Need To Know About Chapter 7 Bankruptcy?

Misinformation about bankruptcy is a big problem. It can prevent some people from getting the help they need or cause them to wait longer than they should before filing. Listed below are a few important things you need to know about filing for Chapter 7 bankruptcy in Florida.

• You get a clean financial slate. You can discharge most if not all of your debt.
• You will not lose everything. In fact, bankruptcy exemptions allow you to keep most if not all of your assets.
• It stops foreclosure, repossession and wage garnishment. The automatic stay immediately prohibits creditors from continuing to collect debts.
• It will not ruin your credit score. Bankruptcy is only one factor, and you can begin rebuilding your credit score immediately.
• You can get credit again and quickly. You can improve your credit score in as little as one year to qualify for new credit.
• It does not have to and should not be your last option. Following a strict budget might help you get by for a while or even resolve some debt, but it can take years. Bankruptcy allows you to get your fresh start quickly.

Call Us For A Free Initial Consultation To Learn More | Se Habla Español

It is always better to get experienced advice from a lawyer sooner rather than later, but we never want you to feel pressured into making a decision. We offer free initial consultations so that you can learn about your options for relief without obligation.

Call our West Palm Beach office at 561-877-1111. You can also send us your information in a confidential email, and a member of our responsive staff will contact you.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code when necessary.

What Can I Keep in a Bankruptcy?

Many people are scared of filing for bankruptcy because they think they will lose everything. Both federal and Florida law ensure that this won't happen. Knowing how to take advantage of exemptions (the things you can keep by law) to protect your most-valued assets, however, is complex.

That is where we come in. At The Associates, we offer comprehensive bankruptcy representation led by attorney David Lloyd Merrill, one of the most experienced bankruptcy lawyers in West Palm Beach and along the Treasure Coast. He has been helping people through bankruptcies for more than 19 years. He knows the laws and exemptions. You can rest assured knowing that you will work with a lawyer who will find the best way forward for your unique financial situation.​

Want to learn more about bankruptcy exemptions? Schedule a free consultation at our West Palm Beach office by calling 561-877-1111.

Understanding Bankruptcy Exemptions

Many people are scared of filing for bankruptcy because they think they will lose everything. Both federal and Florida law ensure that this won't happen. Knowing how to take advantage of exemptions (the things you can keep by law) to protect your most-valued assets, however, is complex.

That is where we come in. At The Associates, we offer comprehensive bankruptcy representation led by attorney David Lloyd Merrill, one of the most experienced bankruptcy lawyers in West Palm Beach and along the Treasure Coast. He has been helping people through bankruptcies for more than 19 years. He knows the laws and exemptions. You can rest assured knowing that you will work with a lawyer who will find the best way forward for your unique financial situation.

Want to learn more about bankruptcy exemptions? Schedule a free consultation at our West Palm Beach office by calling 561-877-1111.

Florida law has a lengthy list of exemptions that, for most people, are more beneficial than federal exemptions. We will sit down with you and help you figure out how to take advantage of exemptions protecting your:​

• Home, no matter how much it is worth
• Income from disability benefits, work, Social Security, workers' compensation and unemployment benefits
• Retirement assets such as a pension plan, 401(k) account and other investments
• Personal assets, subject to various limitations

People worry about losing items such as furniture, electronics and other possessions. In most cases, however, people are surprised at how much they can keep.

Call The Associates Today for Help

Understanding what exemptions work for you is a difficult task. With deep knowledge of all types of complex bankruptcies, we can help you shed your debts and get back on the right track. Schedule a free consultation today by contacting our West Palm Beach office at 561-877-1111.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Filing for Chapter 7 Bankruptcy

Life hardly ever goes according to plan. Illnesses, job losses and other financial emergencies occur. Taking the right steps, however, can provide you with the opportunity to move on from these stressful events. For some, that may include filing for Chapter 7 bankruptcy.

At The Associates, we are here to tell you that there is light at the end of the tunnel — and it isn't a train. With a main office in West Palm Beach, we have helped people throughout Florida and the Treasure Coast liquidate troublesome debts, giving them back control.

Want to learn more? Call our office today at 561-877-1111 to talk to an experienced bankruptcy attorney.

Do I Qualify? How Does the Process Work?

Chapter 7 bankruptcy is also known as "liquidation bankruptcy" because it quickly discharges many of your debts in less than a year. These can include medical bills, credit card bills and some unsecured loans.

Benjamin Franklin once said, "Creditors have better memories than debtors." That may be true, but a Chapter 7 bankruptcy filing can quickly stop them in their tracks. Your filing may put a stop to foreclosure, repossessions and garnishments. If your creditors keep contacting you, let us know. We know the laws required to handle them.

To qualify for a Chapter 7 filing, you will need to pass the means test, which takes your financial situation into account. Some people may not qualify for a Chapter 7, in which case a Chapter 13 filing may be better for them. We can explain the means test and help you determine which chapter will work best for you.

Get Help Today From an Experienced Lawyer

The Associates is one of the most highly regarded bankruptcy firms serving West Palm Beach and Florida's Treasure Coast. To learn more about how we can protect your rights and interests, schedule a free consultation by calling our West Palm Beach office at 561-877-1111.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

West Palm Beach, FL Chapter 11 Bankruptcy

With The Associates Bankruptcy Attorneys, you are guaranteed the attention you deserve. The Chapter 11 procedure can be very complicated but our seasoned attorneys can help you reorganize your affairs. We can provide high quality representation and help you or your business deal with creditors or foreclosures.

The Associates Bankruptcy Attorneys can help. If in fact there is a legal and business solution to your problem, we can guide you through a Chapter 11 Bankruptcy so that you can successfully reorganize and emerge from bankruptcy. Contact our experienced Florida Chapter 11 Bankruptcy lawyer today for a free consultation.

Background

A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy.

A chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. The voluntary petition will include standard information concerning the debtor's name(s), social security number or tax identification number, residence, location of principal assets (if a business), the debtor's plan or intention to file a plan, and a request for relief under the appropriate chapter of the Bankruptcy Code. Upon filing a voluntary petition for relief under chapter 11 or, in an involuntary case, the entry of an order for relief, the debtor automatically assumes an additional identity as the "debtor in possession." 11 U.S.C. § 1101. The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under chapter 11, without the appointment of a case trustee. A debtor will remain a debtor in possession until the debtor's plan of reorganization is confirmed, the debtor's case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. The appointment or election of a trustee occurs only in a small number of cases. Generally, the debtor, as "debtor in possession," operates the business and performs many of the functions that a trustee performs in cases under other chapters. 11 U.S.C. § 1107(a).

Generally, a written disclosure statement and a plan of reorganization must be filed with the court. 11 U.S.C. §§ 1121, 1125. The disclosure statement is a document that must contain information concerning the assets, liabilities, and business affairs of the debtor sufficient to enable a creditor to make an informed judgment about the debtor's plan of reorganization. 11 U.S.C. § 1125. The information required is governed by judicial discretion and the circumstances of the case. The contents of the plan must include a classification of claims and must specify how each class of claims will be treated under the plan. 11 U.S.C. § 1123. Creditors whose claims are "impaired," i.e., those whose contractual rights are to be modified or who will be paid less than the full value of their claims under the plan, vote on the plan by ballot. 11 U.S.C. § 1126. After the disclosure statement is approved by the court and the ballots are collected and tallied, the court will conduct a confirmation hearing to determine whether to confirm the plan. 11 U.S.C. § 1128.

In the case of individuals, chapter 11 bears some similarities to chapter 13. For example, property of the estate for an individual debtor includes the debtor's earnings and property acquired by the debtor after filing until the case is closed, dismissed or converted; funding of the plan may be from the debtor's future earnings; and the plan cannot be confirmed over a creditor's objection without committing all of the debtor's disposable income over five years unless the plan pays the claim in full, with interest, over a shorter period of time. 11 U.S.C. §§ 1115, 1123(a)(8), 1129(a)(15).

The Associates Bankruptcy Attorneys
How Chapter 11 Works
The U.S. trustee or bankruptcy administrator
The U.S. trustee plays a major role in monitoring the progress of a chapter 11 case and supervising its administration. The U.S. trustee is responsible for monitoring the debtor in possession's operation of the business and the submission of operating reports and fees. Additionally, the U.S. trustee monitors applications for compensation and reimbursement by professionals, plans and disclosure statements filed with the court, and creditors' committees. The U.S. trustee conducts a meeting of the creditors, often referred to as the "section 341 meeting," in a chapter 11 case. 11 U.S.C. § 341. The U.S. trustee and creditors may question the debtor under oath at the section 341 meeting concerning the debtor's acts, conduct, property, and the administration of the case.

The U.S. trustee also imposes certain requirements on the debtor in possession concerning matters such as reporting its monthly income and operating expenses, establishing new bank accounts, and paying current employee withholding and other taxes. By law, the debtor in possession must pay a quarterly fee to the U.S. trustee for each quarter of a year until the case is converted or dismissed. The amount of the fee depends on the amount of the debtor's disbursements during each quarter. Should a debtor in possession fail to comply with the reporting requirements of the U.S. trustee or orders of the bankruptcy court, or fail to take the appropriate steps to bring the case to confirmation, the U.S. trustee may file a motion with the court to have the debtor's chapter 11 case converted to another chapter of the Bankruptcy Code or to have the case dismissed.

Creditors' committees can play a major role in chapter 11 cases, but are very rarely appointed in individual cases. The committee is appointed by the U.S. trustee and ordinarily consists of unsecured creditors who hold the seven largest unsecured claims against the debtor. 11 U.S.C. § 1102. Among other things, the committee: consults with the debtor in possession on administration of the case; investigates the debtor's conduct and operation of the business; and participates in formulating a plan. 11 U.S.C. § 1103. A creditors' committee may, with the court's approval, hire an attorney or other professionals to assist in the performance of the committee's duties. A creditors' committee can be an important safeguard to the proper management of the business by the debtor in possession.

Creditors' Committees
Single asset real estate debtors are subject to special provisions of the Bankruptcy Code. The term "single asset real estate" is defined as "a single property or project, other than residential real property with fewer than four residential units, which generates substantially all of the gross income of a debtor who is not a family farmer and on which no substantial business is being conducted by a debtor other than the business of operating the real property and activities incidental." 11 U.S.C. § 101(51B). The Bankruptcy Code provides circumstances under which creditors of a single asset real estate debtor may obtain relief from the automatic stay which are not available to creditors in ordinary bankruptcy cases. 11 U.S.C. § 362(d). On request of a creditor with a claim secured by the single asset real estate and after notice and a hearing, the court will grant relief from the automatic stay to the creditor unless the debtor files a feasible plan of reorganization or begins making interest payments to the creditor within 90 days from the date of the filing of the case, or within 30 days of the court's determination that the case is a single asset real estate case. The interest payments must be equal to the non-default contract interest rate on the value of the creditor's interest in the real estate. 11 U.S.C. § 362(d)(3).

The Single Asset Real Estate Debtor
The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition. As with cases under other chapters of the Bankruptcy Code, a stay of creditor actions against the chapter 11 debtor automatically goes into effect when the bankruptcy petition is filed. 11 U.S.C. § 362(a). The filing of a petition, however, does not operate as a stay for certain types of actions listed under 11 U.S.C. § 362(b). The stay provides a breathing spell for the debtor, during which negotiations can take place to try to resolve the difficulties in the debtor's financial situation.

Under specific circumstances, the secured creditor can obtain an order from the court granting relief from the automatic stay. For example, when the debtor has no equity in the property and the property is not necessary for an effective reorganization, the secured creditor can seek an order of the court lifting the stay to permit the creditor to foreclose on the property, sell it, and apply the proceeds to the debt. 11 U.S.C. § 362(d).​

The Bankruptcy Code permits applications for fees to be made by certain professionals during the case. Thus, a trustee, a debtor's attorney, or any professional person appointed by the court may apply to the court at intervals of 120 days for interim compensation and reimbursement payments. In very large cases with extensive legal work, the court may permit more frequent applications. Although professional fees may be paid if authorized by the court, the debtor cannot make payments to professional creditors on prepetition obligations, i.e., obligations which arose before the filing of the bankruptcy petition. The ordinary expenses of the ongoing business, however, continue to be paid.

The Automatic Stay
Although the preparation, confirmation, and implementation of a plan of reorganization is at the heart of a chapter 11 case, other issues may arise that must be addressed by the debtor in possession. The debtor in possession may use, sell, or lease property of the estate in the ordinary course of its business, without prior approval, unless the court orders otherwise. 11 U.S.C. § 363(c). If the intended sale or use is outside the ordinary course of its business, the debtor must obtain permission from the court.

A debtor in possession may not use "cash collateral" without the consent of the secured party or authorization by the court, which must first examine whether the interest of the secured party is adequately protected. 11 U.S.C. § 363. Section 363 defines "cash collateral" as cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents, whenever acquired, in which the estate and an entity other than the estate have an interest. It includes the proceeds, products, offspring, rents, or profits of property and the fees, charges, accounts or payments for the use or occupancy of rooms and other public facilities in hotels, motels, or other lodging properties subject to a creditor's security interest.

When "cash collateral" is used (spent), the secured creditors are entitled to receive additional protection under section 363 of the Bankruptcy Code. The debtor in possession must file a motion requesting an order from the court authorizing the use of the cash collateral. Pending consent of the secured creditor or court authorization for the debtor in possession's use of cash collateral, the debtor in possession must segregate and account for all cash collateral in its possession. 11 U.S.C. § 363(c)(4). A party with an interest in property being used by the debtor may request that the court prohibit or condition this use to the extent necessary to provide "adequate protection" to the creditor.

Adequate protection may be required to protect the value of the creditor's interest in the property being used by the debtor in possession. This is especially important when there is a decrease in value of the property. The debtor may make periodic or lump sum cash payments, or provide an additional or replacement lien that will result in the creditor's property interest being adequately protected. 11 U.S.C. § 361.When a chapter 11 debtor needs operating capital, it may be able to obtain it from a lender by giving the lender a court-approved "superpriority" over other unsecured creditors or a lien on property of the estate. 11 U.S.C. § 364.

Cash Collateral, Adequate Protection, and Operating Capital
Before confirmation of a plan, several activities may take place in a chapter 11 case. Continued operation of the debtor's business may lead to the filing of a number of contested motions. The most common are those seeking relief from the automatic stay, the use of cash collateral, or to obtain credit. There may also be litigation over executory (i.e., unfulfilled) contracts and unexpired leases and the assumption or rejection of those executory contracts and unexpired leases by the debtor in possession. 11 U.S.C. § 365. Delays in formulating, filing, and obtaining confirmation of a plan often prompt creditors to file motions for relief from stay, to convert the case to chapter 7, or to dismiss the case altogether.

Motions
Frequently, the debtor in possession will institute a lawsuit, known as an adversary proceeding, to recover money or property for the estate. Adversary proceedings may take the form of lien avoidance actions, actions to avoid preferences, actions to avoid fraudulent transfers, or actions to avoid post-petition transfers. These proceedings are governed by Part VII of the Federal Rules of Bankruptcy Procedure. At times, a creditors' committee may be authorized by the bankruptcy court to pursue these actions against insiders of the debtor if the plan provides for the committee to do so or if the debtor has refused a demand to do so. Creditors may also initiate adversary proceedings by filing complaints to determine the validity or priority of a lien, revoke an order confirming a plan, determine the dischargeability of a debt, obtain an injunction, or subordinate a claim of another creditor.

Adversary Proceedings
The Bankruptcy Code defines a claim as: (1) a right to payment; (2) or a right to an equitable remedy for a failure of performance if the breach gives rise to a right to payment. 11 U.S.C. § 101(5). Generally, any creditor whose claim is not scheduled (i.e., listed by the debtor on the debtor's schedules) or is scheduled as disputed, contingent, or unliquidated must file a proof of claim (and attach evidence documenting the claim) in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Fed. R. Bankr. P. 3003(c)(2). But filing a proof of claim is not necessary if the creditor's claim is scheduled (but is not listed as disputed, contingent, or unliquidated by the debtor) because the debtor's schedules are deemed to constitute evidence of the validity and amount of those claims. 11 U.S.C. § 1111. If a scheduled creditor chooses to file a claim, a properly filed proof of claim supersedes any scheduling of that claim. Fed. R. Bankr. P. 3003(c)(4). It is the responsibility of the creditor to determine whether the claim is accurately listed on the debtor's schedules. The debtor must provide notification to those creditors whose names are added and whose claims are listed as a result of an amendment to the schedules. The notification also should advise such creditors of their right to file proofs of claim and that their failure to do so may prevent them from voting upon the debtor's plan of reorganization or participating in any distribution under that plan. When a debtor amends the schedule of liabilities to add a creditor or change the status of any claims to disputed, contingent, or unliquidated, the debtor must provide notice of the amendment to any entity affected. Fed. R. Bankr. P. 1009(a).

Claims
An equity security holder is a holder of an equity security of the debtor. Examples of an equity security are a share in a corporation, an interest of a limited partner in a limited partnership, or a right to purchase, sell, or subscribe to a share, security, or interest of a share in a corporation or an interest in a limited partnership. 11 U.S.C. § 101(16), (17). An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim. A proof of interest is deemed filed for any interest that appears in the debtor's schedules, unless it is scheduled as disputed, contingent, or unliquidated. 11 U.S.C. § 1111. An equity security holder whose interest is not scheduled or is scheduled as disputed, contingent, or unliquidated must file a proof of interest in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Fed. R. Bankr. P. 3003(c)(2). A properly filed proof of interest supersedes any scheduling of that interest. Fed. R. Bankr. P. 3003(c)(4). Generally, most of the provisions that apply to proofs of claim, as discussed above, are also applicable to proofs of interest.

Equity Security Holders
Acceptance of the Plan of Reorganization
As noted earlier, only the debtor may file a plan of reorganization during the first 120-day period after the petition is filed (or after entry of the order for relief, if an involuntary petition was filed). The court may grant extension of this exclusive period up to 18 months after the petition date. In addition, the debtor has 180 days after the petition date or entry of the order for relief to obtain acceptances of its plan. 11 U.S.C. § 1121. The court may extend (up to 20 months) or reduce this acceptance exclusive period for cause. 11 U.S.C. § 1121(d). In practice, debtors typically seek extensions of both the plan filing and plan acceptance deadlines at the same time so that any order sought from the court allows the debtor two months to seek acceptances after filing a plan before any competing plan can be filed.

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If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan. Such a plan may compete with a plan filed by another party in interest or by the debtor. If a trustee is appointed, the trustee must file a plan, a report explaining why the trustee will not file a plan, or a recommendation for conversion or dismissal of the case. 11 U.S.C. § 1106(a)(5). A proponent of a plan is subject to the same requirements as the debtor with respect to disclosure and solicitation.

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In a chapter 11 case, a liquidating plan is permissible. Such a plan often allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a chapter 7 liquidation. It also permits the creditors to take a more active role in fashioning the liquidation of the assets and the distribution of the proceeds than in a chapter 7 case.

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Any party in interest may file an objection to confirmation of a plan. The Bankruptcy Code requires the court, after notice, to hold a hearing on confirmation of a plan. If no objection to confirmation has been timely filed, the Bankruptcy Code allows the court to determine whether the plan has been proposed in good faith and according to law. Fed. R. Bankr. P. 3020(b)(2). Before confirmation can be granted, the court must be satisfied that there has been compliance with all the other requirements of confirmation set forth in section 1129 of the Bankruptcy Code, even in the absence of any objections. In order to confirm the plan, the court must find, among other things, that: (1) the plan is feasible; (2) it is proposed in good faith; and (3) the plan and the proponent of the plan are in compliance with the Bankruptcy Code. In order to satisfy the feasibility requirement, the court must find that confirmation of the plan is not likely to be followed by liquidation (unless the plan is a liquidating plan) or the need for further financial reorganization.

The Final Decree
A final decree closing the case must be entered after the estate has been "fully administered." Fed. R. Bankr. P. 3022. Local bankruptcy court policies generally determine when the final decree is entered and the case closed.

Call The Associates Bankruptcy Attorneys today at their West Palm Beach location at 561-877-1111 for your FREE consultation!

Chapter 12 - Bankruptcy Basics

The chapter of the Bankruptcy Code providing for adjustment of debts of a "family farmer," or a "family fisherman" as those terms are defined in the Bankruptcy Code.

Background

Chapter 12 is designed for "family farmers" or "family fishermen" with "regular annual income." It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts. Under chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years. Generally, the plan must provide for payments over three years unless the court approves a longer period "for cause." But unless the plan proposes to pay 100% of domestic support claims (i.e., child support and alimony) if any exist, it must be for five years and must include all of the debtor's disposable income. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. § 1222(b)-(c).

In tailoring bankruptcy law to meet the economic realities of family farming and the family fisherman, chapter 12 eliminates many of the barriers such debtors would face if seeking to reorganize under either chapter 11 or 13 of the Bankruptcy Code. For example, chapter 12 is more streamlined, less complicated, and less expensive than chapter 11, which is better suited to large corporate reorganizations. In addition, few family farmers or fishermen find chapter 13 to be advantageous because it is designed for wage earners who have smaller debts than those facing family farmers. In chapter 12, Congress sought to combine the features of the Bankruptcy Code which can provide a framework for successful family farmer and fisherman reorganizations.

The Bankruptcy Code provides that only a family farmer or family fisherman with "regular annual income" may file a petition for relief under chapter 12. 11 U.S.C. §§ 101(18), 101(19A), 109(f). The purpose of this requirement is to ensure that the debtor's annual income is sufficiently stable and regular to permit the debtor to make payments under a chapter 12 plan. But chapter 12 makes allowance for situations in which family farmers or fishermen have income that is seasonal in nature. Relief under chapter 12 is voluntary, and only the debtor may file a petition under the chapter.

Under the Bankruptcy Code, "family farmers" and "family fishermen" fall into two categories: (1) an individual or individual and spouse and (2) a corporation or partnership. Farmers or fishermen falling into the first category must meet each of the following four criteria as of the date the petition is filed in order to qualify for relief under chapter 12:

1. The individual or husband and wife must be engaged in a farming operation or a commercial fishing operation.
2. The total debts (secured and unsecured) of the operation must not exceed $4,031,575 (if a farming operation) or $1,868,200 (if a commercial fishing operation).
3. If a family farmer, at least 50%, and if family fisherman at least 80%, of the total debts that are fixed in amount (exclusive of debt for the debtor's home) must be related to the farming or commercial fishing operation.
4. More than 50% of the gross income of the individual or the husband and wife for the preceding tax year (or, for family farmers only, for each of the 2nd and 3rd prior tax years) must have come from the farming or commercial fishing operation.

In order for a corporation or partnership to fall within the second category of debtors eligible to file as family farmers or family fishermen, the corporation or partnership must meet each of the following criteria as of the date of the filing of the petition:

1. More than one-half the outstanding stock or equity in the corporation or partnership must be owned by one family or by one family and its relatives.
2. The family or the family and its relatives must conduct the farming or commercial fishing operation.
3. More than 80% of the value of the corporate or partnership assets must be related to the farming or fishing operation.
4. The total indebtedness of the corporation or partnership must not exceed $4,031,575 (if a farming operation) or $1,868,200 (if a commercial fishing operation).
5. At least 50% for a farming operation or 80% for a fishing operation of the corporation's or partnership's total debts which are fixed in amount (exclusive of debt for one home occupied by a shareholder) must be related to the farming or fishing operation.
6. If the corporation issues stock, the stock cannot be publicly traded.

A debtor cannot file under chapter 12 (or any other chapter) if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 12 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) (1) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

A chapter 12 case begins by filing a petition with the bankruptcy court serving the area where the individual lives or where the corporation or partnership debtor has its principal place of business or principal assets. Unless the court orders otherwise, the debtor also shall file with the court (1) schedules of assets and liabilities, (2) a schedule of current income and expenditures, (3) a schedule of executory contracts and unexpired leases, and (4) a statement of financial affairs. Fed. R. Bankr. P. 1007(b). A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). If a joint petition is filed, only one filing fee and one administrative fee are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 1208(c)(2).

In order to complete the Official Bankruptcy Forms which make up the petition, statement of financial affairs, and schedules, the debtor will need to compile the following information:

1. A list of all creditors and the amounts and nature of their claims;
2. The source, amount, and frequency of the debtor's income;
3. A list of all of the debtor's property; and
4. A detailed list of the debtor's monthly farming and living expenses, i.e., food, shelter, utilities, taxes, transportation, medicine, feed, fertilizer, etc.

Married individuals must gather this information for each spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse are required so that the court, the trustee, and the creditors can evaluate the household's financial position.

When a chapter 12 petition is filed, an impartial trustee is appointed to administer the case. 11 U.S.C. § 1202. In some districts, the U.S. trustee appoints a standing trustee to serve in all chapter 12 cases. 28 U.S.C. § 586(b). As in chapter 13, the trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors. 11 U.S.C. § 1202.

Filing the petition under chapter 12 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. 11 U.S.C. § 362. Filing the petition does not, however, stay certain types of actions listed under 11 U.S.C. § 362(b). The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally cannot initiate or continue any lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Chapter 12 also contains a special automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a "consumer debt" from any individual who is liable with the debtor. 11 U.S.C. § 1201(a). Consumer debts are those incurred by an individual primarily for a personal, family, or household purpose. 11 U.S.C. § 101(8).

Between 21 to 35 days after the petition is filed, the chapter 12 trustee will hold a "meeting of creditors." If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the debtor files. During the meeting the trustee puts the debtor under oath and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and the proposed terms of the debtor's repayment plan. 11 U.S.C. § 343; Fed. R. Bankr. P. 4002. If a husband and wife have filed a joint petition, they both must attend the creditors' meeting. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending. 11 U.S.C. § 341(c). The parties typically resolve problems with the plan either during or shortly after the creditors' meeting. Generally, the debtor can avoid problems by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting.

In a chapter 12 case, to participate in distributions from the bankruptcy estate, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002(c). A governmental unit, however, has 180 days from the date the case is filed file a proof of claim. 11 U.S.C. § 502(b)(9).

After the meeting of creditors, the debtor, the chapter 12 trustee, and interested creditors will attend a hearing on confirmation of the debtor's chapter 12 repayment plan.

Unless the court grants an extension, the debtor must file a plan of repayment with the petition or within 90 days after filing the petition. 11 U.S.C. § 1221. The plan, which must be submitted to the court for approval, provides for payments of fixed amounts to the trustee on a regular basis. The trustee then distributes the funds to creditors according to the terms of the plan, which typically offers creditors less than full payment on their claims.

There are three types of claims: priority, secured, and unsecured. Priority claims are those granted special status by the bankruptcy law, such as most taxes and the costs of bankruptcy proceeding. (2) Secured claims are those for which the creditor has the right to liquidate certain property if the debtor does not pay the underlying debt. In contrast to secured claims, unsecured claims are generally those for which the creditor has no special rights to collect against particular property owned by the debtor.

A chapter 12 plan usually lasts three to five years. It must provide for full payment of all priority claims, unless a priority creditor agrees to different treatment of the claim or, in the case of a domestic support obligation, unless the debtor contributes all "disposable income" - discussed below - to a five-year plan. 11 U.S.C. § 1222(a)(2), (4).

Secured creditors must be paid at least as much as the value of the collateral pledged for the debt. One of the features of Chapter 12 is that payments to secured creditors can sometimes continue longer than the three-to-five-year period of the plan. For example, if the debtor's underlying debt obligation was scheduled to be paid over more than five years (i.e., an equipment loan or a mortgage), the debtor may be able to pay the loan off over the original loan repayment schedule as long as any arrearage is made up during the plan.

The plan does not have to pay unsecured claims in full, as long as it commits all of the debtor's projected "disposable income" (or property of equivalent value) to plan payments over a 3 to 5 year period ,and as long as the unsecured creditors are to receive at least as much as they would receive if the debtor's nonexempt assets were liquidated under chapter 7. 11 U.S.C. § 1225. "Disposable income" is defined as income not reasonably necessary for the maintenance or support of the debtor or dependents or for making payments needed to continue, preserve, and operate the debtor's business. 11 U.S.C. § 1225(b)(2).

Within 45 days after filing the plan, the presiding bankruptcy judge decides at a "confirmation hearing" whether the plan is feasible and meets the standards for confirmation under the Bankruptcy Code. 11 U.S.C. §§ 1224, 1225. Creditors, who receive 21 days' notice, may appear at the hearing and object to confirmation. Fed. R. Bankr. P. 2002(a)(8). While a variety of objections may be made, the typical arguments are that payments offered under the plan are less than creditors would receive if the debtor's assets were liquidated, or that the plan does not commit all of the debtor's disposable income for the three-to-five-year period of the plan.

If the court confirms the plan, the chapter 12 trustee will distribute funds received in accordance with the terms of the plan.11 U.S.C. § 1226(a). If the court does not confirm the plan, the debtor may file a modified plan. 11 U.S.C. § 1223. The debtor may also convert the case to a liquidation under chapter 7. (3) 11 U.S.C. § 1208(a). If the debtor fails to confirm a plan and the case is dismissed, the court may authorize the trustee to keep some of the funds for costs, but the trustee must return all remaining funds to the debtor (other than funds already disbursed to creditors). 11 U.S.C. § 1226(a).

On occasion, changed circumstances will affect the debtor's ability to make plan payments. A creditor may object or threaten to object to a plan, or the debtor may inadvertently have failed to list all creditors. In such instances, the plan may be modified either before or after confirmation. 11 U.S.C. §§ 1223, 1229. Modification after confirmation is not limited to an initiative by the debtor, but may also be made at the request of the trustee or an unsecured creditor. 11 U.S.C. § 1229(a).
Making the Plan Work
The Chapter 12 Discharge
Chapter 12 Hardship Discharge
The court may grant a "hardship discharge" to a chapter 12 debtor even though the debtor has failed to complete plan payments. 11 U.S.C. § 1228(b). Generally, a hardship discharge is available only to a debtor whose failure to complete plan payments is due to circumstances beyond the debtor's control and through no fault of the debtor. Creditors must have received at least as much as they would have received in a chapter 7 liquidation case, and the debtor must be unable to modify the plan. For example, injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge. The hardship discharge does not apply to any debts that are nondischargeable in a chapter 7 case. 11 U.S.C. § 523

Seeking Chapter 13 Bankruptcy Protection

For people who are earning a regular wage, but still struggling with debts, Chapter 13 bankruptcy presents a viable option for gaining debt relief.

At the West Palm Beach bankruptcy law firm The Associates, attorney David Lloyd Merrill and the rest of our team help individuals, families and businesses find debt relief solutions that work for them. With more than 19 years of experience representing both debtors and creditors in some of Florida's most complex bankruptcies, Mr. Merrill can help you evaluate your options and determine if Chapter 13 is right for you.

Answers to your questions are just a phone call away. Schedule a free consultation with an experienced lawyer by calling 561-877-1111 today.

How a 'Wage Earner' Bankruptcy Works

Under a Chapter 13, your debts will be consolidated — usually with a very substantial reduction — into one monthly payment that you make for a predetermined length of time, typically three to five years. At the end of that period your remaining debts, such as credit card bills, medical bills and other dischargeable debts, will be discharged. You will also remain free from creditor harassment, repossessions and garnishments during that time and after your order discharging your debts is entered.

You May Be Able to Protect Your Home From Foreclosure

While a Chapter 7 bankruptcy also comes with an automatic stay against creditors that can protect against foreclosure, you would not enjoy the court's protection for as long because arrearages (meaning past due amounts) are not curable in Chapter 7. Instead, a Chapter 13 filing that lasts several years could give you the time you need to catch up on mortgage arrears and save your home.

Much like catching up on house payments, a Chapter 13 filing could give you time to catch up on other debts such as car payments (which might be reduced in some cases) or back taxes (which might be discharged in some situations).

By the time you emerge from bankruptcy protection, the bank and/or government would then have no reason to take further action against you.

Seeking Chapter 13 Bankruptcy Protection
How a 'Wage Earner' Bankruptcy Works
You May Be Able to Protect Your Home From Foreclosure

Schedule Your Free Consultation Today. Debt Relief Is in Sight.

If you are ready to talk about your options for getting a fresh financial start with an experienced bankruptcy attorney, contact our office today by calling 561-877-1111. Located in West Palm Beach, we serve clients throughout Florida's Treasure Coast.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Bankruptcy Adversary Proceedings Representation

With a great deal of money at stake for debtors and creditors, there are times when a bankruptcy filing does not proceed smoothly. When adversary proceedings occur, having the right legal representation can make the difference in effectively protecting your rights.

At The Associates of West Palm Beach, we understand that adversary proceedings are a big deal — they are a full-blown trial in the bankruptcy courts — and debtors, creditors and banks throughout Florida can work directly with us, confident that we know how to build a strong case and will do so for a value on the fees and costs paid that is unsurpassed. Our lawyer has more than 19 years of experience representing parties in virtually all aspects of bankruptcy adversary proceedings.

Handling a Wide Range of Disputes Among Trustees, Creditors and Debtors

Throughout founding attorney David Lloyd Merrill's legal career, he has handled a broad range of adversary proceedings, representing all parties in claims such as:​

• Trustees accusing a debtor of bankruptcy fraud, such as underreporting assets or running up debt before declaring bankruptcy
• Creditors contesting the dischargeability of a debt they are owed
• Preference actions to recover payments received or paid
• Debt collection litigation that takes place in bankruptcy court
• Protecting debtors from creditors and trustees in a wide variety of cases
• Working with subcontractors, sub-subcontractors and suppliers to protect funds they have been paid by a failed contractor
• Protecting a debtor's discharge

While an adversary proceeding could hinder your bankruptcy goals, working with the right attorney could also make the terms of your bankruptcy more favorable. That is the key difference between working with just a bankruptcy attorney and an experienced bankruptcy litigator like you will find at The Associates. We have handled cases involving complex Chapter 7, 11, 12 and 13 proceedings and have the skills, experience and resources to take your case to trial when necessary.

Contact The Associates Today to Learn More

Do not trade on experience when your rights and financial interests are at stake. Schedule a free consultation by calling our West Palm Beach office at 561-877-1111. We serve clients across the Treasure Coast and throughout Florida.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Creditor Representation in Florida Bankruptcies

Creditors have extensive rights in bankruptcy filings as well. When a debtor seeks bankruptcy protection, creditors have multiple options to seek repayment of the debts they are owed.

In West Palm Beach, along the Treasure Coast and throughout Florida, The Associates represents creditors in bankruptcy proceedings in every Florida court. Attorney David Lloyd Merrill has spent more than 19 years representing both debtors and creditors in cases ranging from simple Chapter 7 liquidations to complex Chapter 11 and 12 reorganizations. He has represented some of the country's largest banks in bankruptcy proceedings such as:

• Seeking relief from the automatic stay that prevents foreclosure, repossession and garnishments
• Objecting to the discharge of certain debts in a bankruptcy filing
• Objecting to a debtor's discharge in full
• Defending preference claims by trustees
• Filing proofs of claim for the repayment of debts

As an experienced bankruptcy court trial attorney who also represents debtors, Mr. Merrill is familiar with arguments made on both sides of these cases and what is necessary for a successful outcome. That is why major, national institutional lenders as well as smaller concerns have put their trust in The Associates to successfully protect their interests when financial implications are at stake.

Contact The Associates Today to Learn More

If you would like to speak with lawyer David Lloyd Merrill, we invite you to contact our West Palm Beach law firm today at 561-877-1111.

Relevant Bankruptcy Cases

At The Associates, we stay up to date on developments in bankruptcy law so that you always receive the best possible advice.

You can always learn more by contacting our West Palm Beach law firm or calling 561-877-1111 to schedule a free consultation with an experienced bankruptcy attorney. In the meantime, we invite you to read a little more about the following bankruptcy cases that have been in the news.

Stern v. Marshall

While the case name may not mean much, it is hard to forget the lengthy battle over the late Playboy model Anna Nicole Smith's battle for control of her 90-year-old husband's oil fortune. After it appeared she had been cut out of her husband's will and before the will was probated in a Texas court, Smith filed for bankruptcy in California, setting off a string of adversary proceedings, which led to Smith being awarded nearly $500 million by a federal bankruptcy court.​

In Stern v. Marshall, the Supreme Court ruled that a bankruptcy court did not have jurisdiction to enter a judgment on a state issue. Essentially, the court ruled that bankruptcy judges do not have the same authority as other federal judges who are appointed by the president.

Bank of America, N.A. v. Caulkett

In this case, decided in June 2015, the court ruled that "junior" liens, such as second mortgages that are underwater, cannot be discharged in a Chapter 7 filing. Banks have hailed the move as a victory, stating that it will allow them to take more risks and make more credit available to borrowers.​

For you, this means it is important that you talk to an experienced lawyer about your options if you are struggling with mortgage payments and have a second mortgage on your home. Other options are available for stripping a lien from your home, and we can help you find a solution that works best for your situation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code