Practice Areas and Legal Definitions

Bankruptcy Laws:
Bankruptcy is a federal court process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as liquidation or reorganization. Under a liquidation bankruptcy (Chapter 7), a claimant files to eliminate debt through the bankruptcy court. Under a reorganization bankruptcy (Chapter 13), a claimant files a plan with the bankruptcy court proposing how to repay creditors.

In 2005, the requirements under which a debtor could file Chapter 7 bankruptcy changed with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act.  Debtors are now required to seek budget and credit counseling before and after filing, financial “testing” is required to determine the debtor’s capacity for debt repayment, Chapter 7 cannot be filed if the household income is greater than the median household income unless an exception applies, and state exemptions cannot be applied unless the debtor has resided at current residence for over two years.

Due to the imposed requirements for Chapter 7 bankruptcy as set forth by the new laws, some debtors who were eligible to file under Chapter 7 now have to file under Chapter 13 bankruptcy instead, in which individuals and creditors agree to a court-imposed plan that requires some or all debts be repaid over three five years, with an appointed trustee assigned to monitor the repayment process. Bankruptcy filings will continue to be recorded on an individual’s credit report for seven years in the case of Chapter 13, and up to ten years for Chapter 7.

Chapter 7:
Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual, corporation, or a partnership. A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property. Business reorganizations are usually filed under Chapter 11.

Chapter 11:
Chapter 11 is typically used for business bankruptcies and restructuring. It is not commonly used by individual consumers since it is far more complex and expensive to pursue. It allows businesses to reorganize themselves, giving them an opportunity to restructure debt and get out from under certain burdensome leases and contracts. Typically a business is allowed to continue to operate while it is in Chapter 11, although it does so under the supervision of the Bankruptcy Court and its appointees.

Chapter 13:
A Chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. Chapter 13 permits individuals to keep their property by repaying creditors out of their future income.  It is not available to corporations or partnerships. After completion of payments under the plan, Chapter 13 debtors receive a discharge of most debts. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property. Business reorganizations are usually filed under Chapter 11.

Foreclosure:
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien".

A Foreclosure by Sale ends in the posting of a sign advertising the auction of your home on the sale date. The only ways to stop a foreclosure are full payment of the arrearage, or the filing of a Chapter 13 bankruptcy. Full Payment: If you are able to obtain and tender the full amount of your arrearage, including fees and costs, you can stop the foreclosure of a standard residential mortgage. Most people lack the money to make full payment. This process stops the foreclosure and allows you to repay your arrearage over a three-to-five year period. The arrearage is paid through a court-appointed official, while you resume your regular monthly payments to the bank in order to keep your home. A Chapter 13 can be filed at any time prior to the law day or sale date, and it is often the only avenue to save your home.

Debt Consolidation:
Contrary to popular belief, debt consolidation is not a loan. Debt consolidation is a process in which debt is restructured into one low monthly payment. It further enables a consumer to reduce the amount owed and thereby eliminate interest. Very often a consumer can detect warning signs of being in too much debt long before any collection notices are received. If more than two of the following signs apply to you, you are probably in too much debt:

• You have begun charging to your credit card essential expenses like food and daily expenditures
• You are making only the minimum payments on your credit cards each month
• You are near the limit of your credit cards
• You have too many credit cards
• You are unsure how much money you owe creditors

If you or someone you know needs debt consolidation legal counsel or the assistance of an experienced Louisville Bankruptcy lawyer, call the Davis Law Office today at 866-616-3135, or use the contact form provided on this site to schedule a free consultation.  I can provide you with a free evaluation of your financial situation and advise you on what steps to take to become debt-free.

If you or someone you know needs the assistance of an experienced Louisville Bankruptcy lawyer, call the Davis Law Office today at 866-616-3135, or complete the contact form provided on this site to schedule a free consultation.

ADDRESS OF THE FIRM:
Davis Law Office
101 North Seventh Street
Louisville, KY 40202
Phone: 866-616-3135
Hours: M-F, 8:00AM-5:00PM

MEMBERS OF THE FIRM:

Attorney E. Brian Davis

• Jurisdictions Attorney is Licensed in: Kentucky, 1982; Indiana, 1986; U.S. District Court Western District of Kentucky, 1984; U.S. District Court Eastern District of Kentucky; U.S. District Court Northern District of Indiana; U.S. District Court Southern District of Indiana; U.S. District Court Southern District of Ohio; U.S. Court of Appeals 6th Circuit; U.S. Court of Appeals 7th Circuit; U.S. Court of Appeals Federal Circuit; U.S. Supreme Court
• Colleges Attended, Degree & Year Graduated: Duke University School of Law, Durham, North Carolina, 1982, Doctor of Jurisprudence; Indiana University, Bloomington, Indiana, 1979, Bachelor of Arts
• Professional Memberships & Achievements: Louisville Bar Association; Kentucky Bar Association; Indiana State Bar Association; Kentucky Chapter Federal Bar Association, Past Chapter President; National Association of Criminal Defense Lawyers; National Association of Consumer Bankruptcy Attorneys