Last month, I attended the NACBA (National Association of Consumer Bankruptcy Attorneys) Conference. I attended the New Jersey Bankruptcy Bench Bar conference on May 11, 2012 as approximately 25% of my practice is bankruptcy related. The focus is divorce/matrimonial law.
We discussed, amongst other issues, the increased use of Chapter 11 Bankruptcy for individuals with secured debt over $1,081,400 and unsecured debt over $360,475, which causes the client to not qualify for Chapter 13. However, the BAPCPA law of 2005 makes an individual Chapter 11 plan similar to a 13, to ensure a certain level of uniformity and creditor protection.
Chapter 11 does have significantly greater recordkeeping and filing requirements so it is more expensive; however, it is very effective in larger individual cases. Previously, attorneys would also often use multiple filings, Chapter 7 and 13, (known as "Chapter 20") to accomplish goals which could not be accomplished with one filing or another. The Court, however, is not fond of this practice and there must be a good faith reason to do this.
Many times debt is what causes conflict between married parties. Often, if a bankruptcy is filed jointly, this takes a lot of pressure off the marriage and the parties stay together. If this does not work, there are also various bankruptcy issues during a divorce and post-judgment which can be handled by our firm. The bankruptcy law is quite favorable to supported spouses and children. The family is a priority.
In this rough economy, Debtors often have more significant and complicated debt issues: large homes with multiple mortgages, tax debt, marital issues, lawsuits, foreclosures, and mortgage modifications that cannot be finalized. At Helfand & Associates, we are very familiar with handling the issues of the individual debtor, with both simple and complex circumstances in and outside of a divorce.
Thanks. Have a great month.