1. Bankruptcy: The Big Picture An Overview by Tinesha Jackson and Andrew Newby October 2016

2. Bankruptcy What is bankruptcy all about?

3. Bankruptcy Is All About:

4. Why Bankruptcy? The debtor owes too much money to too many creditors. The debtor owes too much money to too many creditors. “Debtor” is the person or business filing for bankruptcy “Debtor” is the person or business filing for bankruptcy “Creditors” are the businesses, governments, and people to whom the debtor owes money “Creditors” are the businesses, governments, and people to whom the debtor owes money

5. Why Bankruptcy? Good for the debtor Good for the debtor Debtor can get a “fresh start” Debtor can get a “fresh start” Filing for bankruptcy can temporarily stop debt collection activities (this is called a “stay”) and can wipe away some debts (this is called a “discharge”). Filing for bankruptcy can temporarily stop debt collection activities (this is called a “stay”) and can wipe away some debts (this is called a “discharge”).

6. Why Bankruptcy? Good for the creditors Good for the creditors Creditors can get fair and equal treatment of their claims for money on a timely and predictable basis (instead of receiving nothing, or next to nothing, on an unpredictable basis) Creditors can get fair and equal treatment of their claims for money on a timely and predictable basis (instead of receiving nothing, or next to nothing, on an unpredictable basis)

7. What is Bankruptcy Law? Federal law sets up the rules for bankruptcy Federal law sets up the rules for bankruptcy Common types are Chapter 7, Chapter 11, and Chapter 13 bankruptcies. Common types are Chapter 7, Chapter 11, and Chapter 13 bankruptcies. Chapters correspond to different sections of federal bankruptcy law Chapters correspond to different sections of federal bankruptcy law

8. Where is Bankruptcy Practiced? Proceedings are in federal bankruptcy courts, district courts, courts of appeals, and the United States Supreme Court. Proceedings are in federal bankruptcy courts, district courts, courts of appeals, and the United States Supreme Court. Can also affect (“stay”) proceedings in state courts Can also affect (“stay”) proceedings in state courts

9. Who Are the Key Players? The parties - debtors, creditors, and their attorneys The parties - debtors, creditors, and their attorneys Court personnel – judges and clerk’s office staff. Court personnel – judges and clerk’s office staff. Bankruptcy trustees - handle the financial distributions and accounting Bankruptcy trustees - handle the financial distributions and accounting

10. Why Do Localities Care? Some debtors in bankruptcy owe money to localities Some debtors in bankruptcy owe money to localities Localities are “creditors” who can file claims for Localities are “creditors” who can file claims for Real estate taxes Real estate taxes Personal property taxes Personal property taxes Business taxes Business taxes Water and refuse bills Water and refuse bills Even library fees Even library fees

11. How Are Debts Treated? Secured claims – very likely to be paid Secured claims – very likely to be paid Priority claims – also likely to be paid Priority claims – also likely to be paid Unsecured claims – least likely to be paid Unsecured claims – least likely to be paid

12. Lawyer’s Role in Bankruptcy Lawyer representing a locality-creditor: Lawyer representing a locality-creditor: Files claims, motions, objections, etc., with the court Files claims, motions, objections, etc., with the court Argues motions in court Argues motions in court Works with other lawyers in the case to resolve disputes without court action Works with other lawyers in the case to resolve disputes without court action

13. Strong System is Crucial to Success Localities may have an interest in many, many bankruptcy cases (i.e., lots of debtors owe the locality money) Localities may have an interest in many, many bankruptcy cases (i.e., lots of debtors owe the locality money) The locality needs a strong system to coordinate with the various departments that may have claims to file and make sure the claims are filed within the deadlines set by the court The locality needs a strong system to coordinate with the various departments that may have claims to file and make sure the claims are filed within the deadlines set by the court

14. Types of Bankruptcy Filings  Chapter 7  Chapter 13  Chapter 11

15. Chapter 7 Bankruptcy Filed by individuals and businesses Filed by individuals and businesses No Asset Cases v. Asset Cases No Asset Cases v. Asset Cases  No Asset Cases (Debt is written off a.k.a. “wiped out”)  Asset Cases – creditor is notified to file a proof of claim

16. Chapter 11 Bankruptcy Filed by corporations Filed by corporations Reorganization of debt Reorganization of debt Claims Agent Claims Agent  Kurtzman, Carson Consultants  Epiq Bankruptcy Solutions

17. Chapter 13 Bankruptcy Filed by individuals (unless, debtor operates as small business (dba a.k.a. “doing business as”) Filed by individuals (unless, debtor operates as small business (dba a.k.a. “doing business as”) Reorganization of debt Reorganization of debt Proof of claims filed with Court Proof of claims filed with Court

18. What Does the Paralegal Do? Receive Notice of Petition (What is the bar date/deadline?) Receive Notice of Petition (What is the bar date/deadline?) Contact Departments (Examples: finance, utilities) Contact Departments (Examples: finance, utilities) Email Email Pre-petition debts Pre-petition debts

19. Proof of Claim

22. Filing a Claim Electronically

36. The Claim is Filed, Now What? Receive Plan payments from Trustee office Receive Plan payments from Trustee office  Payouts are distributed by whether or not claim is priority, secured or unsecured  Interest (if applicable)

37. Discharge v. Dismissal Notice of Discharge Notice of Discharge  Debt has been paid; marks the end of Stay in Chapter 7s  Discharges debt (but, not tax debt)  Trustee and Court – closing case Notice of Dismissal Notice of Dismissal  Bankruptcy filing never exist  Debtors sometimes re-file

38. Bankruptcy Database

40. United States Bankruptcy Court Eastern District of Virginia Eastern District of Virginia  https://www.vaeb.uscourts.gov/wordpress/ https://www.vaeb.uscourts.gov/wordpress/ Western District of Virginia Western District of Virginia  http://www.vawb.uscourts.gov/ http://www.vawb.uscourts.gov/

41. Other Helpful Links Pacer Web links Pacer Web links https://www.pacer.gov/psco/cgi-bin/links.pl#BKCTS https://www.pacer.gov/psco/cgi-bin/links.pl#BKCTS https://www.pacer.gov/psco/cgi-bin/links.pl#BKCTS Trustee Websites Trustee Websites  Trustee: Suzanne Wade http://www.access13.com/site/ http://www.access13.com/site/ http://www.access13.com/site/  Trustee: Carl Bates http://www.13network.com/ http://www.13network.com/ http://www.13network.com/

42. QUESTIONS?

43. Andrew R. Newby Assistant County Attorney Email: Andrew.Newby@Henrico.us Andrew.Newby@Henrico.us Tel: (804) 501-4676 And Tinesha M. Jackson, Paralegal Email: Tinesha.Jackson@Henrico.us Tinesha.Jackson@Henrico.us Tel: (804) 501-5066