What does each creditor want from his debtor?
A creditor wants each of their debtors to pay the creditor’s claim in full (or as much as possible) as soon as possible.
A creditor wants freedom from worry about when and how much his debtor will pay him for the debt owed.
A creditor wants to collect his debt to be paid in full (or as much as possible) in as short amount of time as possible.
Who is the Villain?
The debtor seeks the most time to repay the creditor and to pay the creditor as little as possible. Debtor may file bankruptcy to accomplish both goals.
Time, cost, and hassle to collect the debt.
How does Madison Law guide a creditor?
After a consultation with you about your debt, Madison Law, APC will be able to provide you with a plan to collect your debt from the debtor whether it be through a negotiation, court-ordered levy after an asset search, a foreclosure, court-ordered assignment of payments, representation in a bankruptcy case, or representation in an assignment for the benefit of creditors.
Madison Law, APC can take the hassle out of collecting your debt by taking actions to collect the debt in the shortest amount of time in a cost-efficient manner. Madison Law, APC will represent your rights as a creditor to collect your debt in Superior Court and to pursue the debtor into bankruptcy if the debtor elects to file such a case. This means that you will not have to hire a different attorney in the event that a debtor decides to evade collection by filing a bankruptcy case.
Madison Law, APC has over a decade of experience in collecting all types of debts – accounts, contracts, court judgments, liens, notes, and mortgages – whether the debtor is not secured by any property (i.e. a general unsecured debt) or is secured by all types of property: personal property, real property, intellectual property.
- Chapter 7 bankruptcy cases are filed to have a court-appointed trustee oversee the estate created by the debtor who filed the bankruptcy case and to liquidate any of the debtor’s non-exempt assets to pay general unsecured creditors.
- Chapter 13 bankruptcy cases are filed by individuals only to have the court approve a repayment plan for all creditors. Creditors need representation to object to the treatment of their claim in the plan and to negotiate a more favorable treatment with the debtor.
- A Chapter 11 case requires a debtor to confirm a plan of reorganization with its creditors. The creditors who are eligible to vote on this plan have to be impaired (i.e. their legal rights are altered); otherwise unimpaired creditors are deemed to vote in favor of the plan. Chapter 11 cases can take up to 3 years to complete from filing the bankruptcy to plan confirmation because the business needs to resolve its operating problems to generate sufficient cash flow to pay creditors under the plan. If the business cannot generate enough cash to fund a plan, then the bankruptcy court will either convert the case to a Chapter 7 liquidation or require the debtor to sell the business or its assets in the Chapter 11 case. A Chapter 11 plan can pay general unsecured creditors “pennies on the dollar” and still permit the debtor’s owners to keep their ownership in the business. A Chapter 11 bankruptcy gives a business or an individual time to generate the money to fund a plan because the bankruptcy’s purpose is to reorganize businesses, not to terminate them.
- Chapter 11 bankruptcy cases require a creditor, if his legal rights are impaired in the plan, to vote for or against the plan proposed (usually by the debtor). A secured creditor with collateral in the debtor’s cash needs representation to negotiate the debtor’s use of this collateral and any payment to compensate the creditor for any decrease in the collateral’s value while waiting for a plan to be confirmed. All creditors should have legal counsel on whether to support or oppose a plan and how to vote on a plan in a Chapter 11.
- In Chapter 11 cases with a substantial number of creditors, the bankruptcy court will appoint a Committee for General Unsecured Creditors (the “Committee”). This Committee oversees all aspects of the case for these creditors and represents them with the debtor to take actions to generate sufficient cash to fund a plan or sell the debtor, formulate a plan, and confirm it. This requires representation by legal counsel that understands how the debtor’s business operates, the debtor’s financial condition, debtor’s financial reporting on a monthly basis, and actions to improve the foregoing or to sell the debtor either as a going concern as a business or in asset sales. Madison Law, APC has the business and legal experience to perform these tasks for you and when you will need accounting and turnaround management assistance to manage the debtor’s business.
Secured creditors (i.e. creditors with a debt secured by the debtor’s assets as collateral) have to take actions in any bankruptcy case to recover and protect their collateral. Madison Law, APC is ready to represent you as a secured creditor to recover and protect you collateral.
If you are a general unsecured creditor, Madison Law, APC is ready to litigate that the debtor committed fraud or other intentional tort to obtain a judgment from the bankruptcy court that the debtor’s bankruptcy discharge does not apply to your claim. Such a judgment enables you to collect the claim after the debtor’s bankruptcy case closes even though other creditors will be prevented from collecting their claims that are subject to the debtor’s discharge. After a discharge, the debtor will be in a better financial condition to pay your non-discharged claim.
An “Assignment for the Benefit of Creditors” (known as an “ABC”) is a creation under California law that acts as a Chapter 7 bankruptcy case and is a cheaper process than a Chapter 7 to liquidate assets to pay creditors. As a secured creditor, you need representation to have the proper amount of your claim paid in the ABC, recover your collateral from an ABC, and to ensure that your collateral is not fraudulently transferred to a third party without your consent. As a general unsecured creditor, you need representation to make sure you are paid the amount you are owed to the extent any assets are sold to pay general unsecured creditors by the ABC trustee.
Dixon Gardner has significant bankruptcy experience in representing secured lenders (i.e. banks and lease financing companies), general unsecured creditor committees, and general unsecured creditors in Chapter 7, 11, and 13 cases since 2003. Mr. Gardner has over 16 years practicing bankruptcy law where he has represented all types of creditors and debtors. His experience includes 10 years where he worked almost exclusively on businesses and individuals in bankruptcy for all chapters, representing debtors to reorganize their businesses in Chapter 11 and representing all types creditors – including general unsecured creditor committees– in all bankruptcy chapters to get paid. Mr. Gardner’s business experience includes over 20 years as a Certified Public Accountant (with over 4 years at a Big Four Accounting Firm) and as an active investor in public companies.