Anthony N. Perrotta established one of the first consumer-oriented bankruptcy practices in Bartow County in 1984. Upon joining the firm in 1994, Brian R. Cahn headed the firm's bankruptcy section, allowing Anthony Perrotta to concentrate on the firm's family law and civil litigation sections. With a focus on serving the individual consumer debtor, members of our firm have served as lead counsel in thousands of successful Chapter 7 and Chapter 13 bankruptcy cases. Since 1994, the bankruptcy practice has expanded geographically to our offices in Paulding and Gordon Counties, and in scope, to include business bankruptcies under Chapter 11.

What is Bankruptcy?

Bankruptcy laws were formulated to give the honest debtor a fresh financial start. However, bankruptcy is not intended to give debtors an unfair advantage over their creditors. This requirement comes from the United States Bankruptcy Code, Title 11 of the United States Code, and it is not intended to protect the debtor who has acted in bad faith in an attempt to defraud creditors. The United States Bankruptcy Code is broken down into Chapters. Below are some of the common Chapters of the United States Bankruptcy Code. Chapter 7 and Chapter 13 cases are most frequently filed by individual debtors with consumer debts, while Chapter 11 cases are most often filed by businesses as a means to restructure debt.

Chapter 7

Chapter 7 Bankruptcy is designed to provide relief from dischargeable debts in exchange for liquidation of the debtor's "non-exempt" assets. A Chapter 7 debtor is an individual or entity whose expenses exceed its income. This could be caused due to illness, economic hardship, unemployment, unexpected lawsuits, tax debts, or any other circumstances that renders them insolvent. The individual or entity is unable at this point to repay back its debts. Filing for relief under Chapter 7 of the United States Bankruptcy Code can afford the individual or the entity the ability to discharge or eliminate their dischargeable unsecured debts while maintaining a certain protection over some of their assets. Each State law grants the individual the privilege of protecting a certain amount of equity in some of their assets. These are referred to as State Law Exemptions. The State of Georgia exemptions, located in O.C.G.A. § 44-13-100, were designed to allow the debtor to retain the amount of property (including a certain amount of real estate equity) deemed necessary by the Georgia Legislature to obtain a fresh financial start.

Chapter 13

Commonly known as "individual debt adjustment", "individual debt consolidation", or "repayment plan". A Chapter 13 bankruptcy can be filed only by individuals. A typical case generally involves people who have fallen behind in their mortgage payments, delinquent with their priority taxes, or have debts that are generally non-dischargeable in a Chapter 7 (student loans, child support arrears, and others). Filing a Chapter 13 plan of reorganization takes into assumption that the individual has a source of income. Such income exceeds the individual's household expenses. In essence, the individual has disposable income to be able to fund the plan of reorganization. With this extra income, the individual will be able to pay back their creditors over a 36 to 60 month plan. The advantage is that the individual will be able to force creditors, in a successful plan, to accept his/her terms. These terms afford the individuals relief from losing their home, risking an IRS or State taxing agency levy, wage garnishments, liens and other methods utilized by creditors to collect on their debts.

Chapter 11

A Chapter 11, commonly referred to as a "business reorganization", is commenced by the filing of a voluntary petition by the debtor, or the filing of an involuntary petition by creditors. Similar to other Chapters of the United States Bankruptcy code, there is an automatic stay, which affords the debtor with a breathing spell. During this breathing spell, the debtor can and will commence negotiations with its creditors in an effort to negotiate its debts and to propose a reorganization plan. Corporations in a Chapter 11 exist in a form separate from its owners, the stockholders. In essence, the personal assets of stockholders of the debtor corporation are not at risk, unlike a company that is owned by an individual and that is not incorporated in any form.

Please visit us at North Georgia Bankruptcy to view detailed information on the bankruptcy process and to send us information about your current legal need.

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