How Bankruptcy Can Save Your Marriage

The Angry Spouse 

Maryland bankruptcy attorney who has been practicing for over 30 years we run across many situations that seem to repeat themselves on a regular basis. 

• The angry spouse who cannot understand why the mortgage, credit cards, car loans were not paid on time.
• The angry spouse who cannot understand why their partner has incredibly high credit card bills.
• The angry spouse who is shocked that they were not informed over the course of several months that the bills were becoming unmanageable.

A Story about My Fireman Friend

My favorite story is my friend the fireman. He lived in a nice home in a good neighborhood. If you look out front he had a camper, a Harley, and a four wheeler.  He prided himself on paying his bills on time, and on having excellent credit.

The farthest thing from his mind was the possibility that he might have to get help from a bankruptcy lawyer. As is often the case he felt filing bankruptcy is wrong.

My fireman friend was a hard worker, put in overtime and made great money. His spouse also worked and was responsible for the household expenses, kids’ activities and paying the bills.

When they came to see me they were several months behind on the mortgage, the credit cards were “maxed out” and husband was furious, making a scene about the state of the bills and the importance in his family of paying them on time. Filing bankruptcy resolved their financial difficulties and their conflicts.  

Bankruptcy as a Solution for Financial Problems and Personal Relationship Issues

This scene repeats itself almost on a weekly basis in our office. The meeting is often more of a marital counseling session to help people who are terribly overloaded with debt to realize that the solution of filing bankruptcy makes sense and will help rebuild the credit  as well as make the family better able to communicate about the  bills and finances.

The angry spouse in most on these cases is either involved with the household expenses and does not attend to all the things that need to be paid of the household. Or in some cases the household is managed with a relatively “separate” budget system when the spouse doing mostly the household chores and duties does not have enough funds to pay for all the things that need to be provided. 

Bring Your Angry Spouse to a Bankruptcy Lawyer

In many cases an experienced bankruptcy lawyer can help deal with the angry spouse by helping the parties communicate better, helping the spouse who gets blamed deal with their very upset partner. A quick glance at the statements will show the cards have been used to pay normal household expenses not things the family does not need. It is usually process of educating the angry spouse so they can accept some responsibility for the problem.

Chapter 11 Bankruptcy

CHAPTER 11 BUSINESS REORGANIZATION

Chapter 11 bankruptcy is most often associated with business reorganization. Chapter 11 however is also available for individuals who are not in business. Chapter 11 is the most complex type of bankruptcy but also the most flexible and powerful. Unlike Chapter 13 Chapter 11 is not limited to a 5-year repayment plan. Rather one can restructure debts for much longer periods even as long as 30 years if the loan is secured in some cases. Chapter 11 bankruptcy though associated with restructuring an ongoing business can also be used to sell assets and liquidate a business or assets that belong to the debtor.

FIDUCIARY RESPONSIBILITY OF THE MANAGEMENT

In a Chapter 11 bankruptcy the debtor retains its present management and is charged with the fiduciary responsibilities of a trustee for the benefit of creditors. Unlike a Chapter 13 there is no independent trustee appointed to administer the case, rather the company continues to run under the auspices of the bankruptcy court and is authorized to continue its regular operations in the ordinary course of business.

REORGANIZATION PLAN

As is the case with other bankruptcy chapters a Chapter 11 Bankruptcy filing will have the effect of stopping foreclosure, creditor lawsuits, repossessions or other collection activity. The debtor has a limited time to try to make the business work if the plan is to reorganize, before a repayment plan is required to be proposed. The time periods will depend to some extent on the type of case and on the nature of the business. Small business cases and single asset real estate cases have shorter time periods to propose plans and obtain approval than in large multi-asset cases.

Unlike Chapter 13, the Chapter 11 plan is not a standard plan. The plan needs to be approved together with a disclosure statement that describes the plan and the treatment for each group or class of creditors and provides for how the plan will be effectuated. The Court must approve the disclosure statement before it is disseminated in all but small business cases. Once approved the disclosure statement is sent to creditors and shareholders for a vote. At least one group of impaired creditors must accept the plan by having 50 percent in number and 66.66 percent in amount for each class of creditors to accept the plan. Before it can be sent to creditors the Court must find that the plan and disclosure statement contain adequate information for the creditors to decide whether to vote for the plan.

THE NEED OF BANKRUPTCY LAWYER FOR BUSINESS BANKRUPTCY

Needless to say the Chapter 11 process is complicated and requires significant amount of experience to bring a client through the Chapter 11 successfully. At Broumas Law Group our bankruptcy lawyer has experience filing all types of Chapter 11 cases and preparing and obtaining approval of Chapter 11 plans and disclosure statements for small businesses, individuals and large corporations.