Blogs & Resources

When a debtor files a bankruptcy action, creditors may or may not have the opportunity to file a proof of claim evidencing the amount owed to the creditor on the date the bankruptcy action was filed. The court sets a deadline for filing the proof of claim, to which all creditors must strictly adhere. But what if a creditor misses the deadline? Is all hope lost, or is there a mechanism to still get the claim in and receive a portion of any distribution? Well, whether an untimely claim is valid or not really turns on notice.

It is common knowledge that when a company or individual files for bankruptcy, all collection activity stops. What is commonly not known is that condominium assessments are, in a manner of speaking, exempt from that rule. The fact is, all collection activity does not have to stop and you can still recover assessments that come due after the bankruptcy action is filed. Let’s read on to see exactly how all this works.

Very often in a debt collection action, whether a breached contract, defaulted secured note or otherwise, there will be a debtor who is trying to deplete corporate assets (frequently real property) before the inevitable judgment can be rendered. Sometimes depletion isn’t intentional, it is just a byproduct of the business judgment issues that created the problem in the first place. In those circumstances where assets are being wasted, and many more, creditors should consider seeking the appointment of a state court receiver. Receivers can serve as watchdogs for the business, ensuring that status quo is maintained so that the creditors are able to recover whatever assets may remain with an orderly liquidation. In the matters we handle for lenders (and other creditors), receivers come in very handy in the active management of the collateral properties. Appointment of receivers is not a remedy for every case, however, as it often has just as many challenges associated as it does benefits. This Blog post seeks to explore those benefits and drawbacks.

There are numerous provisions built into the Bankruptcy Code which restrain a debtor from abusing the system by filing for bankruptcy over and over again. This includes periods of time in which filing is barred and an inability to obtain multiple discharges during a specified length of time, to name a few. Further, dismissal of a bankruptcy action may have a negative impact on the debtor and provide some relief for creditors in a future action.

Is a provision in a contract waiving a party’s right to file a bankruptcy action, or limiting that party’s rights in a future bankruptcy action, valid?  In short, it depends.  In general, contractual agreements which limit or deny a party’s ability to file a bankruptcy action have been held to […]

Homeowners’ Associations (HOAs) have remedies available, under Florida law, when its residents fail to pay their periodic HOA assessments in a timely manner. One such remedy is a statutory lien pursuant to Chapter 720, Florida Statutes. According to Florida law, when a community is subject to mandatory HOA fees, the HOA has the statutory authority to levy assessments and to secure its claim for any unpaid assessments by placing a lien on the debtor’s property within that community. Fla. Stat. § 720.3085(1).

In every bankruptcy action that is filed, a stay of any collection-type activities automatically comes into place for the duration of the pending action.  However, there are certain proceedings that are exempted from this automatic stay and allowed to proceed against the debtor during a pending bankruptcy action.  One such […]

Section 362 of Title 11 of the United States Code provides for the Automatic Stay in all bankruptcy proceedings, including Chapter 7, 11 and 13 filings. The Automatic Stay is invoked immediately upon a debtor filing for bankruptcy and once invoked it instantly halts all actions by creditors to collect on pre-bankruptcy debts.

By Hans Wahl, Esquire

The first consideration for creditors during bankruptcy proceedings is the Automatic Stay provision of the Bankruptcy Code. Section 362 of the United States Bankruptcy Code provides the provisions governing the Automatic Stay. The Automatic Stay works as an immediate “injunction” that halts all actions by creditors and potential creditors to collect on pre-bankruptcy debts from a debtor who has declared bankruptcy.

The Automatic Stay applies in all bankruptcy proceedings, including Chapters 7, 11 and 13, and this provision is invoked automatically and immediately upon the debtor filing for bankruptcy. The Automatic Stay is a benefit to debtors because once invoked it works to immediately stop all actions and proceedings to recover claims against the debtor. Conversely, it is a detriment to creditors as they can no longer continue with either collection efforts or legal action for their claims against the debtor.

However, there are exceptions to the Automatic Stay which provide relief to creditors. For creditors seeking to avoid the Automatic Stay, there are three subsections of Section 362, which can be invaluable if taken advantage of properly. These include §§§ 362(b), (d) & (f), which can be considered the creditor’s best allies within the Bankruptcy Code.

What happens to the rights of a member of a limited liability company when that member files bankruptcy?  In Florida, that member is automatically terminated from membership in the LLC and any remaining interests in the LLC become property of the bankruptcy Trustee.  But is it really that simple? Limited […]