Bankruptcy Overview – An Interview with Bankruptcy Attorney, Peter Doyle

Bankruptcy Overview – An Interview with Bankruptcy Attorney, Peter Doyle

Shaines & McEachern is proud of our team of knowledgeable and compassionate attorneys. Here’s a conversation with our own Peter Doyle, who specializes in bankruptcy law. If you’re an individual or organization that is need of legal representation due to financial hardships, consider Peter. He’ll be by your side throughout the entire process – hearing your unique situation, assisting you in filing the proper chapter pertaining to your case, and leading you to a better, more manageable situation through and through. Don’t leave your bankruptcy proceeding to chance, talk to Peter – he’ll take care of the rest.

How long have you been working bankruptcy cases?

Since 1987. When I began practicing the United States was in the midst of an extraordinary economic downturn, which was coupled with the failure of many national and regional banks. Those companies that weathered the downturn found that their lenders may not have, which resulted in the FDIC trying to call their loans. Bankruptcy was a growing practice segment for the next 10-15 years.

What got you interested in practicing bankruptcy law?

I studied bankruptcy law in law school and found it interesting and thought it offered the opportunity to help people experiencing crisis. As I mentioned above, the economic environment of the times gave me the opportunity to explore bankruptcy.

Why would someone need to file for bankruptcy?

Many reasons. Each case is different, but it is fair to say that 60% of personal filings involve burdensome medical debt. The other 40% involve burdensome credit card debt. Those numbers are actually low as many cases have both. In short, financial stress has many causes, but most personal cases involve medical and credit card bills…

Why should an individual or business contact you if they’re faced with bankruptcy?

Thirty-two years of experience dealing with these issues requires that you gain substantive knowledge; but, more importantly, it gives you the tools to read between the lines. In other words, you gain a knowledge of how best to achieve client goals, without reinventing the wheel in each case.

What types of debts can one expect to be wiped out by filing for bankruptcy?

Almost all debt is potentially dischargeable. Secured debt (home mortgage, auto lien) is dischargeable, but the mortgage/liens continue to encumber the collateral. Someone filing bankruptcy only seeks that kind of discharge if they have somewhere else to go or another vehicle to drive. That actually happens quite often. Unsecured debt (medical bills, credit card debt, etc.) is almost always discharged. Even taxes can be discharged in certain circumstances.

What’s the difference between exempt and non-exempt assets when it comes to bankruptcy and your clients “stuff”?

The Federal Government and most State Governments have decided that the “fresh start” of bankruptcy should not put the debtor in the poor house or set them back to square one. As such, each has provided numerous exemptions which permit debtors to retain most, if not all of their assets when they are forced to file bankruptcy. When filing bankruptcy the debtor must opt for either the Federal or State law exemptions. They cannot use the best of each system.

If a client possesses non-exempt assets, do they have options to try to protect them?

Yes. Both systems of exemptions allow one to use so-called “wild-card” exemptions, which allow you to protect a limited amount of otherwise non-exempt assets. As a practical matter most people possess few non-exempt assets which are not encumbered by debt.

What are the differences between Chapter 7, 11, and 13 bankruptcy classifications?

Chapter 7 is a chapter usable by both individuals and businesses who are looking to liquidate and then start over (in the case of the individual), or shutdown (in the case of a business). “Liquidate” in this context means to expose your non-exempt assets to liquidation. As a practical matter that rarely happens.

Chapter 13 is for individuals who have fallen behind on their secured debt and need time to catch up, in order to protect their secured assets from creditors. It’s both more expensive and time consuming than chapter 7, so when it suits their needs, most people choose the simplicity of chapter 7.

Both businesses and individuals can file under chapter 11. Chapter 11 allows the debtor a period of time in which to “reorganize” their affairs. It differs from chapter 7 in that it anticipates the debtor’s financial recovery within the context of the case. No fresh start, just time in which to get one’s house in order. As a practical matter, operating under chapter 11 is cumbersome and expensive. For that reason businesses make up over 95% of chapter 11 filings.

What’s a 707(b) objection in a bankruptcy case?

Section 707(b) of the bankruptcy code allows the court, the U.S. Trustee, or any other party in interest to file a motion to dismiss the debtor’s case or convert it to one under another chapter if they think that is more advantageous to other parties in interest. This is infrequently relevant, but when it is, it tends to involve the belief by the court, U.S. Trustee, or a creditor, that the debtor is hiding money or assets and can do more to avoid causing a total loss to creditors.

How does bankruptcy affect a person or business’s means to “move forward” financially?

A chapter 7 bankruptcy stays on your financial report for ten years. A chapter 13 stays on your financial report for seven years. Thus, even if you promptly get back on your feet, you need to explain to potential lenders why they should feel comfortable taking a chance on lending to you. All things being equal, most lenders will lend to a debtor in 3-5 years after their bankruptcy has closed. Auto lenders often feel comfortable doing so much sooner.

What are some challenges you’ve run into while working/representing bankruptcy cases?

Not every debtor has a clear idea of what his/her “plan B” is. By way of example, your debtor is overwhelmed by debt; both personally and in his/her small business. Filing bankruptcy alleviates the debt, but doesn’t put “plan B” in effect. “Plan B” might be as simple as speaking to friends in the industry who can offer immediate employment in the wake of your business closure. It may involve getting out from under cumbersome secured vehicle loans and substituting “reasonable” transportation, at a much lower cost. Debtors putting off formulation of “plan B” always leads to problems.

How have those past challenges informed the way you moved forward with your practice?

When representing a client in bankruptcy I direct the initial discussion toward ultimate goals, whether they are achievable, and how to accomplish them; and what changes they have to plan for to get the greatest boost from the “fresh start” offered by bankruptcy

Are you facing bankruptcy and unclear on what that means for you going forward? Call Peter today. He will be happy to speak with you and respond to any pressing questions which you have. Bankruptcy is hard. Let Peter make it a little easier.

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