[16-Jan-2020] DarksydePhil is filing for bankruptcy (general thread) - and has officially done so on January 31 2020, meaning a lot of his finances have become public

How much debt (not including mortgages, but including car) does Phil actually have?

  • Less than $100,000

    Votes: 34 5.0%
  • $100,000-$200,000

    Votes: 159 23.2%
  • $200,000-$300,000

    Votes: 111 16.2%
  • $300,000+

    Votes: 380 55.6%

  • Total voters
    684

Comma

kiwifarms.net
I guess we need a thread on this.

-scroll down for updated information in chronological order-

- Mirror of the bankruptcy segment of January 16, 2020's early stream, where DSP reveals to the public he's in the process of filing for bankruptcy:


- Very brief summary:

- basically all information about the foreclosure [thread] is confirmed to be correct (mortgage company is selling the home, probably for tens of thousands of dollars less than what DSP still owes on it)
- to get rid of his debts and save his Renton house, DSP is filing for bankruptcy
- might have to sell possessions, but "important" possessions (consoles, streaming equipment, the car etc.) should be safe, according to DSP('s bankruptcy lawyer)
- once the bankruptcy is in full effect, (most of) DSP's financial information will be publicly available

- Lengthier summary, courtesy of @Prince Lotor:

- October fundraiser for $1,800 was for -"everyone in streamchat is morons he never said foreclosure wasn't true, he dodged the questions, he literally never said foreclosure wasn't true, you won't find that clip, not once did he ever say it wasn't happening. I guess there's no fucking mods here today so I have to ban everyone myself. What a bunch of idiots"- random babbling, vague references to looking into plans.
- Talked to lawyer, lawyer said 'no way out but bankruptcy'.
- He can't pay down his debts. Saw a bankruptcy lawyer, told bankruptcy lawyer the trolls ruined my income and that's why his income is inconsistent, bankruptcy lawyer said trolls are crazy and obsessed and will find public bankruptcy filings because they are idiots.
- Trolls found the MidFirst lawsuit day 1.
- Phil said the phrase 'nip in the butt' about whether he should publicly announce his bankruptcy plans. Working on bankruptcy with lawyer for 3 months.
- Phil is declaring bankruptcy because stupid idiot MidFirst bank somehow thinks he owes them the rest of the loan amount after they sell the condo.
- It's entirety the trolls fault he's still in debt.
- Says declaring bankruptcy will exonerate him from owing MidFirst any money after the sale.
- Phil isn't sure which bankruptcy he's going to do. Needs to declare bankruptcy because somehow MidFirst bank will make him sell his primary residence.
- Phil is bummed he can't get any credit cards or loans for stuff during bankruptcy.
- Owes backtaxes this month. Says Fed government probably won't give another payment plan. He's behind on his Federal taxes this year too.
- This nigga talking about offering his statues to have the government sell them.
- @SoapQueen1's estimations of DSP's options from the "Foreclosure" thread, including Bankruptcy and its details:

The way I see it he has the following two strategic options at this stage:

Take Control - Deal with it like a man and accept that sometimes work pays

  1. He contacts the creditor, explains he has a highly valuable asset with a large amount of equity
  2. He offers to allow creditor to attach a lien to it in exchange for delaying foreclosure for a short, set period of time
  3. He sells the condo, pays off the WA lender mortgage, pays off the CT lender mortgage, and walks away with at least $125K in his pocket because if he declares bankruptcy he will get that much so he can negotiate to get that much or more to quickly pay the creditor with no fuss and reduced legal expenses
  4. He pays off all his credit card debt and still has like $25-50K in the bank
  5. He gets to continue making $9,000 per month
    1. He is no longer spending $1500 on a CT condo he doesn't live in
    2. He is no longer spending a couple thousand dollars on old credit card debt
    3. He saves up money and puts it into retirement savings and future home purchase savings
  6. He moves into some one or two bedroom apartment
  7. He buys a modest home with his home purchase savings once the local housing market calms down
His credit score goes through the roof as he has extensive credit history, now no debt, and no foreclosure on his record.

No Strategy - Hope it goes away on its own like everything else in his life
  1. Creditor wins lawsuit, gets like $105K as mortgage principal and interest and like $15K attorney's and other fees
  2. Creditor converts judgement to Washington and begins attaching it to his stuff (lien on the condo, emptying bank accounts, redirecting payments, etc)
  3. He talks to a lawyer because he's unable to pay his bills, condo, car, or old debt
  4. Lawyer advises him that he now has the following two options that he should utilize in tandem
    • Negotiate lower monthly garnishments
    • Incorporate and employ himself to benefit from wage garnishment protection
    • Declare bankruptcy to give himself enough money each month to pay his bills, some housing, and some transportation
The time for negotiation has probably passed at this point in No Strategy.

If he incorporates his business the creditor is likely to take control of his stock and become a shareholder, but if Kat legitimately invested money into the company she could remain a majority shareholder to DSP and therefore the creditor. I think that would be an acceptable method of maintaining control. If the creditor does gain majority control, it will be unlikely to dissolve or sell the company because it has no real cash value; it's value is in its ongoing operation. The creditor will be more likely to replace him as a member of the board of directors and as President. If they do this they can vote to begin compensating him with dividends instead of wages to bypass wage garnishment protection. If they don't replace him as President and take away his authority to spend the company's money he could just spend the company's money until there's nothing left to distribute in a dividend.

If his business continues to pay him only in wages the creditor will only be able to garnish the income his newly formed separate business entity gives to him as wages and not the income the business itself is being given by others; it's his own debt, not the business'. The creditor would be limited to garnishing 25% of his wages after some mandatory deductions. If he declares bankruptcy the trustee can only take and redistribute money being given to him by the business and not money being given to the business itself.

Bankruptcy will have obvious benefits to both parties. It will stop all efforts by creditors (plural) to get money from DSP's accounts, payers, etc. It will also require DSP to begin adhering to a strict budget and give the rest of his income to the trustee to distribute among his credits according to the law and any court instructions. It looks like he has equity that very much exceeds the exemptions, so it will require DSP to sell his condo and his car and find alternative housing and transportation. He will get the first $125K after the original WA lender is paid the mortgage balance and his creditors will get the rest. He can use that money to make initial payments on a home and a car that is below the exemption; if he doesn't spend it he will lose it to the same bankruptcy trustee a while later, I don't know how much of a grace period he has.

His credit score is tanked and he has to adhere to this payment plan for at least 3-5 years, possibly more if he files under Chapter 11 instead of 13 and his creditors all vote to extend it. I don't think filing under Chapter 11 is a good move for him for that reason alone.

------

By request another option follows:

Do Nothing - Stick your head in the sand
  1. Creditor wins lawsuit, gets like $105K as mortgage principal and interest and like $15K attorney's and other fees
  2. Creditor converts judgement to Washington and begins attaching it to his stuff (lien on the condo, emptying bank accounts, redirecting payments, etc)
  3. He's unable to pay his bills, condo, car, or old debt
  4. He gets foreclosed on a second time, this time in WA
  5. He moves into some one or two bedroom apartment
  6. The WA second condo is sold and he gets a bunch of money after the sale and part of it gets seized to pay off the CT debt
  7. He gets to continue making $9,000 per month
    1. He is no longer spending $1500 on a CT condo he doesn't live in
    2. He is still spending a couple thousand dollars on old credit card debt
    3. He starts spending money like a stupid person again
  8. He never buys a home again out of shame, confusion, and fear
His credit score is tanked and he has nothing to show for it.

-UPDATE- January 18, 2020 => general information on types of bankruptcy (Chapter 7, 13 etc.) (added by actually)

Information on types of bankruptcies:


The means test measures your income and debt. The outcome will determine which chapter you’ll need to file to discharge (erase) debt.

  • Chapter 7 bankruptcy. If your household income is lower than the median income of your state, you can receive a discharge in a Chapter 7 case. If it’s higher, you might still pass the means test after subtracting allowed expenses. If you qualify for Chapter 7 but want to take advantage of benefits only afforded in Chapter 13—such as catching up on a home loan—then you can pay into a three-year Chapter 13 plan, rather than a five-year plan.
  • Chapter 13 bankruptcy. If your income exceeds the Chapter 7 limits, your bankruptcy options will be limited to paying into a five-year Chapter 13 repayment plan. But doing so isn’t automatic. You must have enough income to pay all required debts. Determining your Chapter 13 bankruptcy payment requires a calculation similar to that in Chapter 7. You’ll pay whichever is greater: your disposable income, the value of your nonexempt property, or the amount of your nondischargeable debt (such as support obligations and tax debt).

Here's what will happen to nonexempt property (things you can’t protect with an exemption):
Washington Homestead Exemption
The homestead exemption protects up to $125,000 of equity in a debtor’s home or principal residence, including a manufactured or mobile home. The exemption is reduced to $15,000 for other personal property used as a residence. (RCW §§ 6.13.010, 6.13.020, 6.13.030.)

Washington Motor Vehicle Exemption
A debtor can exempt up to $3,250 in one motor vehicle. Spouses filing jointly can each exempt a vehicle. (RCW § 6.15.010(1)(d)(iii).)

Washington Wildcard Exemption
A filer can exempt up to $3,000 worth of any type of personal property other than wages with the following limitations: no more than $1,500 total in cash, $500 for bank accounts, and $2,500 toward educational loans. (RCW § 6.15.010(1)(d)(ii).)

Washington Tools of the Trade Exemption
A debtor can exempt up to $10,000 in tools, instruments, and materials used to carry on his or her trade. Special exemptions are available for farmers, physicians, attorneys, and clergymen. (RCW § 6.15.010(1)(e)(i)-(iii).)

-UPDATE- JANUARY 31, 2020 => DSP has officially filed for Chapter 7 bankruptcy

As of today, DSP has officially filed for bankruptcy and the bankruptcy forms, which means a lot of DSP's financial information, have become public. You'll find them at the bottom of this OP and in the following post:

He filed with the court. I can get documents in a minute or someone else can.

He's counting over $5000 per month of business expenses.


Fist analysis of the filled-out forms:

[click here for the original post]

First analysis:

He's filing under Chapter 7 which requires debtors to liquidate their non-exempt property. DSP can only claim $125K equity in his WA condo and $3,250 in his car are exempt. His own filing indicates he has $345K equity in his WA condo and $16K equity in his car. He would be required to sell both to satisfy the requirements of Chapter 7. I can't think of a situation in which he can reaffirm the mortgage and keep the condo or enter into a modified or reaffirmed agreement to keep the car if he really has this much equity in each.

Not only is there no known argument to back up this reaffirmation of the mortgage, the entire equity calculation is sloppy or a lie to begin with. The filing states Zillow values it at $379K yet Zillow actually values it at $410K. The historical estimated value on Zillow is there for all to see and hasn't been as low as $379K since January of 2016. Redfin and Realtor.com suggest similar units in his gated community are worth $413-414K minimum. This places his initial equity at $279K. The following items then get deducted from the potential sale price of $410K, as far as I know:
  • the homestead exemption: $125K
  • trustee commissions (something similar to 25% of the first $5K of non-exempt equity, 10% of the next $50K, and 5% of the remainder): $17,750
  • realtor commissions (they claim 9% of the sale price): $36,900
  • amount owed on the mortgage: $227,000
leaving him with $128,350 of equity, only some of which is exempt as it is barely above $125K. It seems to me his attorney is desperately trying to prevent this condo from being sold during the bankruptcy. Here's the issue with that: They're already lying about how much Zillow estimates it's worth which reduces their credibility and all it takes is the trustee, judge, or one of his 16 creditors to demand an actual appraisal. If it's worth more, and it probably is considering other units in his gated community have sold for more in the past 6-7 months, he will begin to have non-exempt equity. One source indicates his home is actually worth up to $456K which would leave him with $42,910 in non-exempt equity and result in the trustee selling his condo.

I have no idea how they're planning to exempt his car if he really has this much equity in it. Even after trustee commission it's worth too much.

His business expenses clock in at over $5,000 per month which is nonsense and is likely more lies. Again, all it takes is the trustee, judge, or one of his creditors asking for a detailed statement of these expenses and they will most likely find out he's calling his entire WA condo a business expense and he will lose all credibility because that is a material misrepresentation. The trustee, judge, or a creditor will immmediately demand he correct his bankruptcy filing or just ask that it be dismissed entirely. If he's telling the IRS his entire condo is a business expense that's actually hilarious tax fraud and they will find out about it eventually.

He is claiming he owns no electronics and no collectibles which is almost certainly a lie, but doesn't probably affect anything other than his credibility because it would all be exempt anyway.
[/QUOTE]

Bankruptcy analysis and FAQ thread:


TL;DR Overview
Phil has filed for bankruptcy as of Jan 31st, 2020. He claims business expenses of approximately $5000 a month (including $9000 in July 2019), which is likely bullshit (see spoilers below). The monthly income estimations have been proven to be extremely accurate, with all months failing within (or very close to the range) of the numbers from the DSP Savings and Loan thread. Kat is confirmed to be working part-time retail, currently at Fred Meyer. Based on reported salary, she's working about 20 hours a week. From the filed documents, it looks like Phil is trying to flat out lie to the court. This is going to be broken down in detail below.

Phil's Debts
Federal Taxes = $15,000 (It's not clear if this is just remaining from 2018, or if this includes an estimation of 2019's federal taxes as well. Presumably it's only 2018.
WA Condo = $227,448.00 (30 year apparently fixed 5% interest; started at $251,750 on May 22nd, 2014; amortization schedule can be calc'd here)
CT Condo = $105,890.00
2017 Toyota Corolla = $14,328.00 (with all of 5000 miles put on it :lol:)
American Express CC = $1,128.00
American Express CC = $6,422.00
Bank of America = $26,038.00
BMW Bank of North America = $2,741.00
Capital One CC = $10,751.00
Chase CC = $14,100.00
CitiBank CC = $8,508.00
Citibank CC = $13,885.00
Citibank = $15,601.74
Discover CC = $10,053.00
Lending Club Corporation = $9,397.00
Prosper Marketplace, Inc. = $4,355.00
SYNCB/Sam's = $3,819.00
US Bank = $4,751.54

Total CC/Loan Debt = $131,550.28
All Debt = $479888.28

Got a question you want to see answered and added to the FAQ? Use this thread:


@SoapQueen1 has made a thread in the LLP subforums with discussion of the legal implications:


-UPDATE- February 3, 2020 => a '341(a) Meeting of Creditors' has been scheduled for March 5, 2020, at 10:00 AM.

BREAKING NEWS

Meeting with the creditors has been scheduled for 3\5\2020 at 10am with Trustee Nancy L James.


Source
View attachment 1127996
Source 2
View attachment 1127997
New document attached. Also his request to pay filing fees in installments was approved.
Examples of how 341(a) Meetings are conducted in general:

- 341(a) Meeting script
341 Meeting Structure and Questions
This page describes the structure of the 341 meeting and the questions that our office asks during the meeting.

OVERVIEW
§341 of the Bankruptcy Code states that "trustee shall call a meeting of creditors to be held. The business of the meeting shall include the examination of the debtor under oath." The meeting is held by a member of the trustee's staff. The debtor, joint debtor and the debtor attorney are required to attend the meeting. Creditors may attend if they wish.

The purpose of meeting is to review the petition and schedules with the debtor to ensure they are accurate, resolve any issues that may impact confirmation of the plan and to give creditors an opportunity to question the debtor.

MEETING
Prepare computer and escort attendees to room.

  • Select case in the 341 worksheet function.
  • Announce case in the reception area and attorney area.
  • Escort people to room and have everyone sit down.
Turn on recorder and state case information.
  • Turn on the recorder
  • Complete recording label information.
  • Good morning. My name is hearing officer, I will be the hearing officer for this meeting of creditors required by section 341 of the bankruptcy code. I am a representative for the trustee in this case.
  • This meeting will be tape recorded as required by bankruptcy rules. I would like everyone to please speak clearly when asking or answering questions.
  • This is the case of debtor names.
  • Case number case number.
  • Today is date.
Ask attendees to state their appearances.
  • address debtor attorney Counsel, please state your appearance.
  • Debtor attorney announces name and client's name.
  • address debtors Please state your name for the record.
  • Debtor announces name.
  • address creditor representatives Please state your appearance.
  • Creditor representatives announce name and the creditor they represent.
Explain meeting process to debtor.
  • We are here today to make sure the documents you and your attorney have submitted to the bankruptcy court are correct. Also, we will try to make sure your plan to repay your creditors will work. In order to do that, I will ask you some questions.
  • If any creditors are present Creditors will have an opportunity to ask you questions about your case.
Swear in debtor.
  • Before we start with questions, I will ask you to take an oath to tell the truth.
  • Please raise your right hand.
  • Do you swear or affirm the testimony you are about to give is the truth, the whole truth and nothing but the truth?
  • Debtor must answer yes aloud.
  • Thank you. If at any time you want to ask me a question, please feel free to do so.
Verify name, social security number, address, prior filings.
  • Debtor's first name, joint debtor's first name are you married to each other?
  • Use information from petition and question the debtor:
  • Mr./Ms. debtor's last name have you used any other names during the last 6 years?
  • Is your social security number debtor social security #?
  • Do you live at debtor's address?
  • Have you ever filed bankruptcy before? (Skip this question if a joint case.)
  • Is your mailing address debtor's mailing address?
If there is a joint debtor, use information from petition to ask the following questions:
  • Have you used any other names in the last 6 years?
  • Is your social security number joint debtor social security #?
  • Do you live at debtor's address?
  • Have either of you ever filed bankruptcy before?
If this is a repeat filer ask the following questions:
  • How long have you been on your job?
  • Is this the same employer/job you had in the last case?
  • If it is the same job, ask why this case will work when the last one didn't.
Pro Se Debtor. Ask the following questions:
  • Did you receive help with the filing of your petition, schedules and plan?
  • If yes, what is the occupation of this person?
  • Did you pay them for their services and how much?
  • Obtain the name, occupation, phone number and address of the person.
Business cases. Ask the following questions regarding the reporting package mailed to the debtor and debtor attorney:
  • Our office mailed you documents regarding the operation of your business. Did you receive them?
  • If yes, ask for the completed forms.
  • If no, give them a copy and explain we must have the completed forms one week prior to the confirmation date.
  • Do you have any questions about the forms?
Verify schedules - property, debts, income and expenses.
  • Show debtor/joint debtor copy of petition and schedules.
  • This is a copy of your petition. Did you see these documents before you signed them?
  • Have you listed all of your property in these documents?
  • Review schedules A and B.
  • Have you listed everyone you owe money to in these documents?
  • Review schedules D, E and F.
  • Did you bring a pay stub with you today?
  • Ask for all of the stubs available.
  • Verify the accuracy of the scheduled income.
  • Have there been any significant changes to your budget?
Allow creditors to ask relevant questions.
  • address creditor representatives Do you have any questions?
  • Limit the creditor to questions about collateral and insurance issues.
  • Ask about the creditor's claim amount if not on file.
Verify accuracy of claim amounts and equity.
Update information on 341 worksheet.

  • address debtor attorney Are there any unpaid attorney fees?
  • Enter data on system.
  • Verify the following dollar amounts and numbers and inform the parties of the terms of the plan..
  • monthly plan payment
  • months in plan
  • estimated percent.
  • Recalculate computer worksheet.
Arrange payroll deduction and provide Chapter 13 plan information.
  • We recommend that all plan payments to the trustee be made through payroll deduction. We have found that cases have a better chance of success when on payroll and you don't have to purchase a cashiers check or money order.
  • Do you want payroll deductions?
  • If debtor agrees to payroll deduction:
  • Print order.
  • Explain order.
  • Have debtor sign order.
  • If debtor refuses payroll deduction:
  • You should understand that if you miss a payment, the judge can order payroll deduction or dismiss your case without your permission.
  • Explain how to make payments to our office.
  • If the debtor agreed to payroll, explain that they should make a payment every time they are paid until they see the deductions coming out of their check.
  • Explain information on it.
  • Give the debtor payment envelopes.
Meeting conclusion
  • Mr./Ms. debtor's last name, do you have any questions at this time?
  • No further action required by debtor attorney:
  • The confirmation hearing will be on date.
  • Address debtor attorney Our office requires no additional information or documents at this time. You may contact the trustee's attorney staff attorney name if you have any questions regarding the confirmation hearing.
  • Good luck to you. This meeting is adjourned.
  • If debtor attorney must do something:
  • The confirmation hearing will be on date.
  • address debtor attorney Our office requires the following things from you:
  • State documents that must be provided or amended.
  • State any other requirements.
  • This must be done at least one week prior to the confirmation hearing.
  • You may contact the trustee's attorney staff attorney name if you have any questions regarding the confirmation hearing.
  • Good luck to you. This meeting is adjourned.
  • Turn off the recorder.
  • Excuse everyone from the room.
Meeting follow up.
  • Enter the meeting result and any necessary notes.
  • Print a copy of the worksheet.
  • Make copies of the confirmation order, payroll order and any other necessary documents.
  • File documents and return the case file to the front desk.
(http://www.chi13.com/Web/341script.html)

- 341(a) Meeting recording


Note: DSP's meeting could be (slightly) different, but the examples above should give a good impression of the general idea.
 

Attachments

Last edited:

RemoveKebab

Ssssshhhhh! I said ssssshhhhhhh! Teehee!
True & Honest Fan
kiwifarms.net
Wait, so Bankruptcy doesn't work the way Phil thinks it does right? He doesn't just get to throw away his debt and call it all good in one court proceeding right?

Also he'll have to prove he was broke right? They'll look in to his spending and finances right?
Helpful information DOOD

Chapter 11 vs. Chapter 7 Bankruptcy
DiffenFinancePersonal Finance
Depending on the type, or "chapter," of bankruptcy, debts are treated differently. In Chapter 11 bankruptcy, debts are restructured in a way that debt repayment becomes more achievable. In Chapter 7 bankruptcy, which is the most common form of bankruptcy, many debts are forgiven, and a variety of personal assets are sold — liquidated — to repay as many remaining debts as possible. In general, Chapter 11 bankruptcy is utilized by corporations and other business owners, while Chapter 7 bankruptcy is favored by individuals.
There are 4 types of bankruptcy filings in the Federal Bankruptcy Code (Title 11 of the United States Code):
  • Chapter 7 - Liquidation
  • Chapter 11 - Reorganization (or Rehabilitation bankruptcy)
  • Chapter 12 - Adjustment of Debts of a Family Farmer with Regular Annual Income
  • Chapter 13 - Adjustment of Debts of an Individual with Regular Income
The main difference between Chapter 7 and Chapter 11 bankruptcy is that under a Chapter 7 bankruptcy filing, the debtor's assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate (sell off) assets.
Comparison chart
Differences — Similarities —
Chapter 11 Bankruptcy versus Chapter 7 Bankruptcy comparison chart
Edit this comparison chartChapter 11 BankruptcyChapter 7 Bankruptcy
  • current rating is 3.09/5
  • 1
  • 2
  • 3
  • 4
  • 5
(82 ratings)
  • current rating is 3.09/5
  • 1
  • 2
  • 3
  • 4
  • 5
(101 ratings)
Known asReorganization or Rehabilitation BankruptcyLiquidation Bankruptcy
Debtor's assets sold (liquidated)NoYes (certain assets are exempt; so they are not sold)
Trustee appointedYesYes
Role of trusteeTo work with the debtor to develop a repayment plan for all outstanding loansTo oversee the securing of the debtor's assets, the liquidation (sale) of these assets and the repayment of creditors in the order of priority (secured debts repaid first)
Debt forgivenessNo. Terms of the loan are changed.Yes. Debt may be forgiven to the extent that sale of assets does not cover all loans.
Entities allowed to fileBusinesses, individuals, married couplesBusinesses, individuals, married couples
 

DZoomer

kiwifarms.net
I don't understand how he thinks he can just declare bankruptcy and all his debts will disappear.

He makes a lot of money. He has the means to pay off his debts. He can sell his WAkhando, pay off his debts and buy a smaller house.

I mean, maybe I'm the one who doesn't understand how the law works in the US. But that kind of thing wouldn't happen the way DSP thinks it is going to happen here in my country. Can't declare bankruptcy when he is capable of paying off all his debts.
 

TheKatIsNowGone

Praise the Sun!
kiwifarms.net
Helpful information DOOD

Chapter 11 vs. Chapter 7 Bankruptcy
DiffenFinancePersonal Finance
Depending on the type, or "chapter," of bankruptcy, debts are treated differently. In Chapter 11 bankruptcy, debts are restructured in a way that debt repayment becomes more achievable. In Chapter 7 bankruptcy, which is the most common form of bankruptcy, many debts are forgiven, and a variety of personal assets are sold — liquidated — to repay as many remaining debts as possible. In general, Chapter 11 bankruptcy is utilized by corporations and other business owners, while Chapter 7 bankruptcy is favored by individuals.
There are 4 types of bankruptcy filings in the Federal Bankruptcy Code (Title 11 of the United States Code):
  • Chapter 7 - Liquidation
  • Chapter 11 - Reorganization (or Rehabilitation bankruptcy)
  • Chapter 12 - Adjustment of Debts of a Family Farmer with Regular Annual Income
  • Chapter 13 - Adjustment of Debts of an Individual with Regular Income
The main difference between Chapter 7 and Chapter 11 bankruptcy is that under a Chapter 7 bankruptcy filing, the debtor's assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate (sell off) assets.
Comparison chart
Differences — Similarities —
Chapter 11 Bankruptcy versus Chapter 7 Bankruptcy comparison chart
Edit this comparison chartChapter 11 BankruptcyChapter 7 Bankruptcy
  • current rating is 3.09/5
  • 1
  • 2
  • 3
  • 4
  • 5
(82 ratings)
  • current rating is 3.09/5
  • 1
  • 2
  • 3
  • 4
  • 5
(101 ratings)
Known asReorganization or Rehabilitation BankruptcyLiquidation Bankruptcy
Debtor's assets sold (liquidated)NoYes (certain assets are exempt; so they are not sold)
Trustee appointedYesYes
Role of trusteeTo work with the debtor to develop a repayment plan for all outstanding loansTo oversee the securing of the debtor's assets, the liquidation (sale) of these assets and the repayment of creditors in the order of priority (secured debts repaid first)
Debt forgivenessNo. Terms of the loan are changed.Yes. Debt may be forgiven to the extent that sale of assets does not cover all loans.
Entities allowed to fileBusinesses, individuals, married couplesBusinesses, individuals, married couples
Phew, for a second I was under the pignosis. This is going to get so good.
 

tomstone

kiwifarms.net
Helpful information DOOD

Chapter 11 vs. Chapter 7 Bankruptcy
DiffenFinancePersonal Finance
Depending on the type, or "chapter," of bankruptcy, debts are treated differently. In Chapter 11 bankruptcy, debts are restructured in a way that debt repayment becomes more achievable. In Chapter 7 bankruptcy, which is the most common form of bankruptcy, many debts are forgiven, and a variety of personal assets are sold — liquidated — to repay as many remaining debts as possible. In general, Chapter 11 bankruptcy is utilized by corporations and other business owners, while Chapter 7 bankruptcy is favored by individuals.
There are 4 types of bankruptcy filings in the Federal Bankruptcy Code (Title 11 of the United States Code):
  • Chapter 7 - Liquidation
  • Chapter 11 - Reorganization (or Rehabilitation bankruptcy)
  • Chapter 12 - Adjustment of Debts of a Family Farmer with Regular Annual Income
  • Chapter 13 - Adjustment of Debts of an Individual with Regular Income
The main difference between Chapter 7 and Chapter 11 bankruptcy is that under a Chapter 7 bankruptcy filing, the debtor's assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate (sell off) assets.
Comparison chart
Differences — Similarities —
Chapter 11 Bankruptcy versus Chapter 7 Bankruptcy comparison chart
Edit this comparison chartChapter 11 BankruptcyChapter 7 Bankruptcy
  • current rating is 3.09/5
  • 1
  • 2
  • 3
  • 4
  • 5
(82 ratings)
  • current rating is 3.09/5
  • 1
  • 2
  • 3
  • 4
  • 5
(101 ratings)
Known asReorganization or Rehabilitation BankruptcyLiquidation Bankruptcy
Debtor's assets sold (liquidated)NoYes (certain assets are exempt; so they are not sold)
Trustee appointedYesYes
Role of trusteeTo work with the debtor to develop a repayment plan for all outstanding loansTo oversee the securing of the debtor's assets, the liquidation (sale) of these assets and the repayment of creditors in the order of priority (secured debts repaid first)
Debt forgivenessNo. Terms of the loan are changed.Yes. Debt may be forgiven to the extent that sale of assets does not cover all loans.
Entities allowed to fileBusinesses, individuals, married couplesBusinesses, individuals, married couples
lets hope for the lucky 7
 
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