Category Archives: Bankruptcy

An “Avoidance Action” in bankruptcy is an action to undo (avoid) certain transactions that the debtor engaged in before the bankruptcy. Though Avoidance Actions are not common, they are something to be aware of and to review your case for prior to filing.

The U.S. Bankruptcy Code grants the bankruptcy trustee avoiding powers, which permit the trustee to undo certain transfers of money or property made during a specified period of time before the date the bankruptcy petition is filed. This means the trustee, only with approval from the Bankruptcy Court, can take back certain payments made to creditors or reverse certain transfers of property made before bankruptcy.

What transactions may be subject to an Avoidance Action?

Preferential payments made to creditors over others may be subject to an avoidance action.

• Payments made to creditors within 90 days before filing bankruptcy. 11 U.S.C. § 547(b)(4)(A).
  • Totaling over $600, aggregate, to a creditor in the 90 days prior to filing.
  • Made while you were insolvent (your debts were higher than your assets); and
  • The payment(s) gave the creditor more than it would have otherwise received in a Chapter 7 liquidation case.
• Payments made to “insiders” (relatives, general partners) made within 1 year before filing bankruptcy. 11 U.S.C. § 547(b)(4)(B). The above criteria applies to payments to insiders as well.
• Fraudulent payments made to creditors. 11 U.S.C. 548.
• The trustee is also authorized to avoid transfers under applicable state laws. 11 U.S.C. § 544.

Avoiding powers are designed to prevent unfair payments to one creditor at the expense of all other creditors.

It is the trustee’s burden to demonstrate the statutory elements of a preferential or fraudulent payment. The trustee must file an action with the Bankruptcy Court. Due to the high cost of bankruptcy litigation most preference avoidance actions are settled before going to trial.

Avoidance Actions in bankruptcy cases are relatively rare. Also, an experienced bankruptcy attorney will analyze the specifics of your case to identify areas of potential conflict prior to filing and the best ways to avoid potential disputes.

If you have made payments to creditors recently, or transferred property in the last few years, you can still explore how filing for bankruptcy can help you. It is important to review your specific situation with a bankruptcy attorney. Perhaps the transactions you made would not pose a problem in your case, or perhaps waiting to file bankruptcy would be a better choice.

If you live in Savannah, GA or the surrounding areas, let’s meet for a free consultation. Together we will review your situation and see if bankruptcy is the right solution to get you out of debt. Please reach out to us at (912) 351-9000 or contact us by filling out this simple web form.

For over 35-years the Law Office of Barbara B. Braziel has proudly served the people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.

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

Bankruptcy offers many benefits. After a successful bankruptcy, you will no longer be obligated to pay back your credit card debt or medical bills. You could be debt-free after bankruptcy. As soon as you file for bankruptcy, the collection calls must stop. And all other collection action, like wage garnishment or lawsuits for unpaid debt, must stop. Filing for bankruptcy can even give a boost to your retirement savings.

How can bankruptcy boost my retirement savings?

Once of the unsung benefits of bankruptcy is the money that is freed up afterward.

Consider how much money you currently pay toward your debt every month. Are you paying hundreds of dollars or more toward credit card bills or medical bills? Do you owe so much money that you will be paying it off for many years to come?

After bankruptcy you will no longer owe money on your dischargeable debts, including credit cards, medical bills, personal loans, and certain older tax debts. The money you are currently making toward these payments will be money that is freed up after bankruptcy. This is why many people have more money after filing for bankruptcy.

The freed up funds after bankruptcy can be put toward your retirement funds.

• You can increase your contribution to your 401(k).
• You can put money into an IRA.
• You can make other long-term investments meant to be used in retirement.

Also, your retirement funds are fully protected through bankruptcy. You get to keep the retirement funds you saved in ERISA-qualified retirement accounts before you file. This is why we urge people not to borrow against, or withdraw from, their retirement accounts to pay back debt.

The truth is that many Americans are financially unprepared for retirement. We want our clients to get the most out of their bankruptcy filing, and part of that is exploring the wise financial choices that can be made after bankruptcy.

Some people erroneously view bankruptcy as financial ruin, but bankruptcy can create an opportunity to take control of your finances. The monthly payments you are making toward debts that will be erased in bankruptcy will be money available to fund retirement, stash an emergency savings, or to put toward other financial investments.

Deciding Bankruptcy Is the Right Choice for You

Here at the Law Office of Barbara B. Braziel we will make sure you understand the benefits of bankruptcy and how filing with affect you and your family. We file hundreds of Chapter 7 and 13 bankruptcy cases every year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.

We are here to give you the fresh start you deserve. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

The Law Offices of Barbara B. Braziel proudly serves Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City, GA.

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

Before you file for bankruptcy protection it is critical that you know how filing will benefit you and understand what bankruptcy can and cannot do for you. As you explore the ways bankruptcy can help you, we encourage you to sit down with a bankruptcy attorney to discuss your specific situation.

Many bankruptcy attorneys offer free consultations. Take advantage of having all of your questions answered at no cost to you. We offer free consultations to anyone in Savannah, GA and the surrounding areas who wants to explore their options to get out of debt. Contact us here or call (912) 351-9000 today.

When you sit down with a bankruptcy attorney, ask all of the questions you have and make sure you cover these 5 Bankruptcy Questions to Ask Before Filing.

1. Do I qualify for Bankruptcy?

The answer to this questions is complex and requires an analysis of your income and expenses. Even high income earners can qualify for Chapter 7 bankruptcy, which is the quickest and simplest form of bankruptcy.

For people who do not qualify for Chapter 7, or who would otherwise benefit from additional protections, filing for Chapter 13 bankruptcy may be an option. Chapter 13 bankruptcy requires a three to five year repayment plan, but offers additional benefits that Chapter 7 does not, such as the opportunity to lien strip an underwater second mortgage, pay mortgage arrears, and make up missed car payments.

When you work with us, we will explain the different chapters of bankruptcy and how filing will affect you and your family. When we meet for a free consultation we will go over the pros and cons of the various chapters and help you determine which chapter is best for you. In the mean time, for a better understanding of Chapters 7 versus 13, read our article The Differences Between Chapter 7 and Chapter 13 Bankruptcy.

2. Do I have any meaningful alternatives to filing for bankruptcy?

Simply because you are exploring how bankruptcy can help you does not mean that you actually need to file for bankruptcy. It is advisable for you to understand your meaningful options on getting a handle on your debt.

When it comes to debt relief, your situation is unique and you’re empowered to choose the path that is right for you. A few options for getting out of debt include creating a feasible plan to pay back your debts, settling your debts, debt consolidation, and erasing debts through bankruptcy. Read more about the pros and cons of each option in our article How to Get out of Debt.

If the above options will take you many years to get out of debt, we encourage you to consider the benefits and drawbacks of bankruptcy. Further, a meaningful alternative to bankruptcy will handle your entire debt problem, not just one or two debts. Bankruptcy is not the solution that’s right for everybody, but it is a powerful legal tool to end your financial struggles.

3. Do I have any non-exempt assets?

This questions essentially means: can I keep my assets and belongings in I file for bankruptcy?

In general, most people are able to keep most or all of their assets and belongings through bankruptcy. Assets that are protected in bankruptcy and cannot be seized and sold by the Bankruptcy Trustee are “exempt” assets. Georgia bankruptcy law protects a number of exempt assets, including a certain amount of equity in a home, vehicle, household goods, and many other assets. View the entire list of Georgia exemptions here.

If you have non-exempt assets, those will be subject to seizure and sale by the Bankruptcy Trustee to pay back a pro-rata share to your qualifying creditors. You will know before filing if you have any non-exempt assets that cannot be protected if you file for bankruptcy.

4. Are any of the transfers I’ve made in the past two years possible “fraudulent transfers”?

Federal bankruptcy law regulates sales or transfers of real property and other assets made during the two-years prior to filing for bankruptcy.

In your Bankruptcy Petition you must disclose all sales or transfers of real property made within two years of the date your case is filed. Any sale or transfer of property made within the two year look-back period will be examined by the Bankruptcy Trustee assigned to your case. The Trustee will be looking for assets that could be seized and sold to pay back the debts you owe and instances of bankruptcy fraud.

You may still file for bankruptcy if you have sold or transferred property during the look-back period, though it is important to discuss the transaction with your bankruptcy attorney to explore whether it will affect your case. Even innocent and honest transfers can cause problems.

5. Will filing for bankruptcy erase all of my debts?

Bankruptcy law treats different types of debts differently. Bankruptcy erases your dischargeable debts, including credit card debts, medical bills, personal loans, past due rent, utility bills, certain older tax liabilities, most civil judgments (not based on fraud), and some other unsecured debts. However, bankruptcy does not erase nondischargeable debts, including student loans, back spousal or child support payments, newer tax liabilities, and certain other types of debts listed as exceptions to discharge in the U.S. Bankruptcy Code. 18 U.S.C. § 523.

Also, depending on when or how a debts was incurred, you may have other nondischargeable debts. Review your debts with your bankruptcy attorney prior to filing so you know which, if any, of your debts must be paid back even after filing for bankruptcy.

Bankruptcy is a Powerful Tool to Help You Get Out of Debt

Filing for bankruptcy protection is your legal right and offers powerful tools to help you get out of debt and get the fresh financial start you deserve.

We invite you to learn more about who we are here. Our bankruptcy law firm is committed to helping people get out of debt and gain the financial freedom they deserve.

Call us at (912) 351-9000 or contact us here to schedule a free consultation today.

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

Toys “R” Us is frequently a topic in the news. Since the toy giant filed for Chapter 11 bankruptcy in September of 2017, the fate of the company has been up in the air.

In March the company announced its plans to shut down operations in the U.S. and Puerto Rico. All Toys “R” Us and Babies “R” Us stores are closing.

The toy retailer filed for Chapter 11 bankruptcy in an effort to reorganize its debt load. Chapter 11 bankruptcy is designed for businesses seeking to restructure and create a repayment plan to pay back its debts over time. While Chapter 11 has the power to help a company avoid liquidation and having to shut down completely, it is not always successful.

At the time of filing, Toys “R” Us was more than $5 billion in debt. The expenses of carrying that much debt was roughly $400 million a year. Just days after filing, the company announced that it had access to $3 billion in bankruptcy financing, which it planned to use to restructure the company, alleviate its debt burden, and revamp its stores. There was also speculation that the company would be bought by another company as part of the bankruptcy proceedings.

The turn-around the company hoped for did not happen. In a January bankruptcy court filing the company reported holiday season earnings  that fell far below worst case projections. In the fourth quarter of last year, Toys “R” Us earned $81 million in pre-tax profit―which was $250 million below the company’s target and a quarter of what it earned just one year earlier in Q4 of 2016.

All Toys “R” Us and Babies “R” Us Stores Closing

The brick and mortar stores are in the process of liquidating their inventory. Toys “R” Us and Babies “R” Us gift cards expired in April. Sales on the Toys “R” Us website have already been shut down. Visitors to the site are greeted with a pop-up box notifying them that they can no longer make purchase from the site. The statement reads:

“Thanks for visiting. We have shut down the website for any purchases but our brick and mortar stores are open and holding going out of business sales. You can keep up-to-date with the sale at https://toysrusclosingsale.com and liquidation-going-out-of-business-FAQs. We encourage you to stop by your local store and take full advantage of the deep discounts and deals available. Thank you for your business and support over the years.

Sincerely, Toys “R” Us and Babies “R” Us teams.“

Though Chapter 11 bankruptcy could not save Toys “R” Us, it is not uncommon for Chapter 11 bankruptcy filings to save a company.  A number of well known corporations have sought the protections and benefits of Chapter 11 bankruptcy. For example, Chrysler filed in 2009 and American Airlines in 2012. If you’re interested in learning more about business bankruptcy, Business Insider compiled an interesting review of The 11 Largest Bankruptcies In American History.

Are You Struggling with Debt?

If you are exploring how bankruptcy can help you get out of debt, we encourage you to seek the counsel of an experienced bankruptcy attorney.

Here at the Law Office of Barbara B. Braziel we have over 35-years of bankruptcy experience. We are the premier bankruptcy law firm in Savanna, GA and we practice exclusively in bankruptcy law.

We invite you to get to know us here and read about the clients we’ve helped here.

Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

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

A recent Supreme Court case addressed the extent of the safe harbor of Section 546(e) of the Bankruptcy Code.

• Trustee’s Avoiding Powers: The Bankruptcy Code allows bankruptcy trustees to “set aside” (avoid) certain transfers and recover funds for the benefit of the bankruptcy estate and the creditors, including fraudulent transfers “of an interest of the debtor in property.” 11 U.S.C. § 548.
• Limits of Trustee’s Avoiding Powers: The Bankruptcy Code also sets out specific limits on the trustee’s exercise of these avoiding powers. The securities safe harbor of section § 546(e) is one of these limits. Under the Code, the trustee “may not avoid a transfer that is a … settlement payment … made by or to (or for the benefit of) a … financial institution … or that is a transfer made by or to (or for the benefit of) a … financial institution … in connection with a securities contract.” 11 U.S.C. § 546(e).

In the case at bar, Merit Management Group, LP v. FTI Consulting, Inc. asked the Court “to determine how the safe harbor operates in the context of a transfer that was executed via one or more transactions.” 583 U.S. ___, 1 (2018). Essentially, when determining whether the securities safe harbor saves the transfer from the trustee’s reach, should courts look to the transfer the trustee seeks to avoid or should the court look to the component parts of the overarching transfer?

Supreme Court Holding

In a unanimous ruling the Supreme Court held that “the plain meaning of §546(e) dictates that the only relevant transfer for purposes of the safe harbor is the transfer that the trustee seeks to avoid.” Id. 2.

Facts of the Case

Valley View Downs, LP, the owner of a Pennsylvania racetrack, bought all shares of a competing racetrack, Bedford Downs, for $55 million. Valley View borrowed money from Credit Suisse and other lenders to pay for the shares of Bedford Downs. The exchange took place through Citizens Bank of Pennsylvania and the escrow agent. Id. 7.

Shortly thereafter Valley View filed for Chapter 11 bankruptcy. FTI Consulting, Inc. was appointed Trustee of the litigation that includes Valley View as one of the debtors. The Trustee brought suit seeking to avoid Bedford Downs’ $16.5 Million transfer to Valley View under the securities safe harbor provisions of the Bankruptcy Code for transfers “made by or to” certain financial entities. Id.

Credit Suisse and Citizens Bank are financial institutions within the language of 11 U.S.C. § 546(e). The question is whether the language “made by or to” includes institutions that act merely as a conduit for the transfer, but do not benefit from the transfer. The Court agreed with the Trustee’s argument that the safe harbor has no application in this case because the transfer was not made by, to, or for the benefit of the financial institution. Id. 10.

“The language of §546(e), the specific context in which that language is used, and the broader statutory structure all support the conclusion that the relevant transfer for purposes of the §546(e) safe harbor inquiry is the overarching transfer that the trustee seeks to avoid under one of the substantive avoidance provisions.” Id.

In Merit neither Valley View or Merit is a “financial institution” under the safe harbor of Section 546(e). Therefore, the transfer falls outside the scope of the safe harbor and the trustee may avoid the transfer.

The Takeaway

The securities safe harbor is no longer a broad safe harbor for recipients of transactions that pass through financial institutions. However, financial institutions remain protected under Section 546(e) whether the institution acts as a principal to a transaction, or merely as an intermediary.

Bankruptcy is Confusing, We’re Here to Help

If you’re considering bankruptcy, you may feel overwhelmed or scared of the bankruptcy process. We’re here to tell you that generally it isn’t an adversarial process, but rather a cooperative process with the goal of getting you out of debt and being fair to your creditors.

Here at the Law Office of Barbara B. Braziel we help people get out of debt. We are the premier bankruptcy law firm in Savanna, GA and we practice exclusively in bankruptcy law. Our experienced attorneys are committed to ensuring you understand the protections and benefits of bankruptcy and how filing with affect you and your family. We take the time to explain the bankruptcy process to our clients. We invite you to get to know us here and read about the clients we’ve helped here.

Call us today at (912) 351-9000 or contact us to schedule a free consultation.

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

People want to pay back the money they borrow. People want to pay off the debts they owe. We’ve been practicing bankruptcy law for over 35 years and the majority of our clients tell us they feel badly that they’re unable to pay back their debts. Prior to filing many people experience a serious life-changing event, like a job loss, divorce, death in the family, a costly medical emergency, or another unavoidable situation. When you simply cannot afford to pay back your debts, for whatever reason, filing for bankruptcy may be the right choice for you.

How Many People File for Bankruptcy?

• In 2017, 759,243 individuals and married couples filed for Chapter 7 and Chapter 13 bankruptcy combined.
• In Georgia in 2017, 45,583 individuals and married couples filed for Chapter 7 and Chapter 13 bankruptcy combined.
• 2018: In the first two months of this year alone, 6,844 Georgians filed for bankruptcy protection.

Currently Georgia ranks 3rd in the nation in per capita bankruptcy filings, surpassed only by California and Illinois (based on the number of filings in January and February of 2018). By these numbers, you can see that bankruptcy is not uncommon. If you are drowning in debt that you cannot pay back, it is time to learn about how bankruptcy can erase your debt and give you the fresh financial start you need.

How Can Filing for Bankruptcy Help Me?

Bankruptcy offers many benefits and protections. Here are just a few of the ways that filing can help you:

• Bankruptcy has the power to erase medical debt, credit card debt, and many other types of debts.
• As soon as you file all collection action against you must stop―bankruptcy puts an end to:
  • Collection phone calls
  • Wage Garnishment
  • Bank Levies
  • Lawsuits for unpaid debts
  • Foreclosure proceedings (at least temporarily, sometimes permanently)
  • Repossession (at least temporarily, sometimes permanently)
• Reduce stress and live healthier. Living with the weight of debt can adversely affect your health. Financial stress has been linked to an increased risk of heart disease, ulcers, diabetes, migraines, and sleep disturbances.

How Do I Decide If Bankruptcy is the Right Choice for Me?

To explore if bankruptcy is the right choice for you, we encourage you to discuss your financial situation with an experienced bankruptcy attorney. If you live in or around Savannah, GA come in and meet with us for a free consultation. Together we will look at your specific situation to see if bankruptcy would be a good solution to your debt problems. We will also go over how filing would affect you and the pros and cons of filing.

Call us now at (912) 351-9000 or click here to schedule your free consultation.

The Law Office of Barbara B. Braziel is the premier bankruptcy law firm in Savanna, GA. We have over 35 years of bankruptcy experience and we practice exclusively in bankruptcy law. We invite you to get to know us here and read about the clients we’ve helped here.

We proudly serve the people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.

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

When you file for bankruptcy you must list all of your assets and all of the debts you owe. Essentially your bankruptcy petition, on the day it is filed, is a snapshot of what debts you owe and what you own.

The Bankruptcy Estate

Also, when you file for bankruptcy something called your “bankruptcy estate” is created. The bankruptcy estate can be understood as the debtor’s interest in his or her property on the day bankruptcy is filed. The Bankruptcy Trustee assigned to administer the case is in control of the estate.

Understand that as long as all of your assets, property, and other belongings are listed, properly valued, and exempt in the bankruptcy petition, there is no risk of losing assets. While the Bankruptcy Trustee has the power to seize and sell assets, then use the proceeds to pay a pro-rata share to certain of your creditors, the vast majority of Chapter 7 bankruptcy cases are “no-asset” cases. This means the debtor (the person who files for bankruptcy) does not have assets that can legally be seized, so the debtor loses nothing through the bankruptcy process.

The majority of people who file for bankruptcy get to keep most or all of their belongings through the bankruptcy process, including personal belongings, jewelry, their retirement accounts, their car, and even their house.

Listing Your Debts

You must list every debt you owe, and the creditor you owe, in your bankruptcy petition. You do not get to pick and choose which debts to include in your bankruptcy petition. Bankruptcy law is designed to protect your rights, but also protect the rights of your creditors. This means that you cannot purposefully exclude listing a creditor for any reason.

For example, a debtor may want to pay the debt they owe back even after filing, or they may not want a creditor to be notified about their bankruptcy. First, nothing in bankruptcy law precludes you from paying back a debt if that is what you want to do. After a successful bankruptcy you are no longer legally obligated to pay back the debts that were discharged, but if you want to do so, that is your choice. Regardless you must list all creditors. Second, your creditors will receive notice of your bankruptcy filing and the date for your Meeting of Creditors. It is rare for creditors to attend this meeting. All creditors must be listed and will be notified.

Benefits of Bankruptcy

The benefits of bankruptcy are vast. Bankruptcy is a powerful legal tool that can wipe out your debts and stop your creditors from taking any collection action against you. However, to get the benefits of bankruptcy, the trade off is that you must give full disclosure in your bankruptcy petition.

Your bankruptcy petition is filed with the Bankruptcy Court under penalty of perjury. It must be truthful and accurate to the best of your knowledge, including complete lists of all you own and all you owe on the date you file.

Deciding Bankruptcy Is the Right Choice for You

Here at the Law Office of Barbara B. Braziel we will make sure you understand the benefits of bankruptcy and how filing with affect you and your family. We file hundreds of Chapter 7 and 13 bankruptcy cases every year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.

We are here to give you the fresh start you deserve. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

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