Bankruptcy/Collections/Creditor's Rights

• Chapter 7- Bankruptcy proceedings instituted under Chapter 7 of the Bankruptcy Code provide a "fresh start" for the debtor. When filing under Chapter 7, the debtor seeks to have each debt forgiven. In certain cases where debts represent items purchased on credit, for which the seller has retained a security interest, the court may require those items to be surrendered to the seller in exchange for the debt being forgiven. Once the court has determined that a debtor has fairly presented his or her financial situation, a discharge order will be signed granting the relief requested-forgiveness of each debt listed.
• Chapter 11- Bankruptcy under Chapter 11 provides a business with the opportunity to reorganize by obtaining relief from a portion of its debts so that cash-flow can be directed to other areas of the business in an effort to make it stronger and more competitive. Chapter 11 programs are perhaps the most difficult of bankruptcy proceedings because, just as a debtor had to convince a creditor to extend them credit in the first instance, Chapter 11 requires a debtor to convince his or her creditor that further credit is warranted while they operate from a position that already shows their vulnerability. Notwithstanding these odds, my office has generally been successful with the Chapter 11 plans I have proposed.
• Chapter 13- Some individuals may find that while their debts are indeed overwhelming, they still have a strong enough cash flow to continue making decreased payments to their creditors. Under this structure, the debtor prepares a plan with his or her attorney which takes into account all sources of income and estimated living expenses. The income that remains after living expenses are satisfied is then divided up among the creditors in a "plan" that must then be approved by them.

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Michael M. Malinowski PLC
740 Alger Street, S.E.
Grand Rapids, Michigan 49507

Phone: (616) 475-4994
E-mail: mike@malinowskilaw.com

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