June 2019 Archives

First Day Orders in Chapter 11 Bankruptcy Cases

When a Chapter 11 business bankruptcy is filed, as a general rule the debtor company cannot pay prebankruptcy debts until a plan or reorganization is approved many months letter. However, in certain circumstances the inability to pay certain prepetition debts can put the company out of business. For example, if a bankruptcy is filed on a Thursday and the next day payroll is to be paid for the prior 2 weeks, the company must be able to pay that or will lose many employees. Or a company might be dependent on the services of a vendor such as a vendor that provides packaging for items sold by debtor. To avoid impacting the debtor the rules provide the opportunity to file a motion to be heard almost immediately on the first day the bankruptcy is filed. The rules such as New Jersey local bankruptcy rule 9018 require immediate notice by telephone and email to creditors to have an opportunity to respond or object. While the creditors have limited time to respond these orders are necessary if a reorganization is to be successful 

Can I File a Bankruptcy a Second Time?

A bankruptcy can be filed a second time. The impact of filing depends on how long before was the prior bankruptcy filed and what chapter was filed and whether a discharge was received in a prior bankruptcy. If a discharge was received in a chapter 7, you cannot receive a discharge in another chapter 7 for 8 years. You can obtain a discharge in a chapter 13 filed  6 years after the chapter 7. Since bankruptcy is Federal law, these same rules apply even if , for example, you file the first bankruptcy in Maple Shade New Jersey and file second bankruptcy while livin in Philadelphia Pennsylvania. If you previously filed a chapter 13 bankruptcy and received a discharge you can obtain a discharge in a later chapter 13 filed 4 years later or a chapter 13 filed 2 years later. Keep in mind that you may benefit from a chapter 13 even if you cannot get a discharge, for example if a chapter 13 is needed to pay missed mortgage payments over time.

New Philadelphia Location for Meeting with Creditors

Whether you live in Northeast Philadelphia, Center City Philadelphia, or elsewhere in the city, when you file a Chapter 7 or a Chapter 13 Bankruptcy you are required to attend a "Meeting of Creditors". In most consumer cases none of the creditors show up. However, you still meet with the trustee to review your case. For a number of years the Chapter 7 meeting with the trustee took place at 833 Chestnut Street, Philadelphia PA. However, as of May 6, 2019 the Office of The United States Trustee has obtained space in the Nix Courthouse and Federal Building at 900 Market Street, room 304, Philadelphia PA. Since the meetings are now in a federal court house protected by US Marshall's office and metal detector's it is important that debtors allow additional time to make it to the hearing. The Chapter 13 Meeting of Creditors which moved a couple of years ago to 1234 Market Street (SEPTA Building) Suite 18-341 Philadelphia PA is to remain at that location.

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