Welcome to The Cohn Law Firm. William
A. Cohn is the principal attorney, and has been practicing Bankruptcy
Law since 1978. He is a Memphis Bankruptcy lawyer.
Call 901-757-5557 for a free
appointment to discuss your situation.
THERE ARE FOUR TYPES OF BANKRUPTCY
a) Chapter 7 - Straight
$306.00 Filing Fees (which is paid to
the Court) and expense fee for credit reports, photocopies, check handling,
postage, etc. For a total of $395.00
*$650.00 for individual (commonly called
a "consumer bankruptcy")
*$775.00 for individual with sole proprietorship
as a "side job" or for "extra income"
*$925.00 for husband and wife (commonly
called a "consumer bankruptcy")
*$995.00 for husband and wife with sole
proprietorship as "side job" or for "extra income"
*$1,250.00 for individual or husband &
wife (which have 12 or more creditors) also for small business
*$1,450.00 for corporations and partnerships
* Includes all consultations &
work exclusive of litigation and motions,
and one phone consultation per week until 4 weeks after creditor's
meeting. Allow 3 weeks for the petition to be typed
and ready to sign for filing
FEES FOR EACH OF THE FOLLOWING:
1. Motion to Avoid Lien (uncontested)
2. Motion to Redeem Secured property
3. Motion to Amend to Add Creditor
$450.00 (plus $20.00 filing fee)
4. Typing and Filing of Petition in 5 days or less $500.00
5. Complaint to Determine Dischargeability $250.00 DOWN + $250.00/hour
6. DEFENSE of ANY Motion, Complaint, or Petition $250.00 DOWN +
7. TRANSFER TO MISSISSIPPI Bankruptcy
** Attorney fees for the $650.00 fee
and the $750.00 fee plus the filing fees and expenses must be paid
in full before the Petition will be typed. For all other Chapter
7 filings $650.00 plus the filing fee and expenses must be paid
before petition is typed and the balance before the petition is
b) Chapter 11 - Reorganization/pay
partnerships, and individuals with more than
$100,000.00 in Unsecured Debts.
$1039.00 Filing Fee
Small corporation or business $9,500.00
Medium corporation or
Complex Case: $25,000.00 to $100,000.00
The above is applied to an hourly rate
of $250.00 per hour. When the retainer is depleted, the client will
be billed monthly.
c) Chapter 12 - Pay out plan for family
Filing Fee of $1,039.00
d) Chapter 13 - fka "Wage Earner Plan"/pay
For persons who earn wages, for
small business owners, and for individuals who have a source of
income - commonly called a "consumer" bankruptcy
$395.00 DOWN to cover filing fees, photocopies,
postage, check handling, etc.
Attorney Fee Retainer $500.00
***The balance is part of the money
deducted from your paycheck
An attorney fee of $3000.00 is set
by the Court in a Chapter 13 case. Your payment of $500.00 is
applied to the $3000.00 awarded, and the balance is paid as
part of the money deducted from your payment of the plan. The Court
can award additional fees upon the request of the lawyer.
for a free appointment to discuss your situation.
We do NOT recommend
35% of Chapter 13 plans payout. Clients have over the years
routinely complained that they go to Court many
having their payments
the Chapter 13 Trustee. As lawyers, we have no control over
payments. The Chapter 13 Trustee uses his computer
at the Creditors' Meeting and tells the client and the lawyers
the payment amount and schedule. Very often the Chapter 13
Trustees later advise that the debtor has not paid enough in
and the payments must be raised. It has been the
experience of the principal lawyer in this law firm that Lawyers' fees
have routinely been substantially underpaid in relation to non
bankruptcy areas of law (even though the Bankruptcy Code
requires that attorney fees in Bankruptcy be similar
to fees in non bankruptcy areas of law). In fact, Lawyers are usually actually paid
only about 1/3 of what the Court "awards." Do you think
that this would lead to good representation in Chapter 13
The principal lawyer in this law firm in 25 years has observed
absolutely no heads of any large law firms appearing
in Bankruptcy Court on Chapter 13 cases. Usually,
this lawyer observes the low man on the totem pole in the law firm
being sent. In this lawyer's opinion, far too much negotiation
results. It has been this lawyer's observation that very
few debtors who file Chapter 13 know: the
amount of the lawyers' fees, the filing fees, the trustees'
fees, and creditors' lawyers fees. Neither the judges nor
the trustees tell the amount to the debtors if their lawyers
do not. The judges have a great many cases and have their
signature stamped on Orders which they call 'administrative
one judge, Judge Jennie Latta, to her credit, has openly
attempted to improve the quality of the law practice in her
court. However, the principal lawyer in this firm has, in
the past, routinely encountered an unwillingness of the
Bankruptcy Court judges and personnel and appointees to
seriously consider changes consistent with their policies.
As a client, does this assure you that your interests are
We therefore only recommend Chapter 13
as a last resort.
Only if you are several months behind on your car note or
house note and cannot bring the note current prior to filing,
do we recommend Chapter 13.
We recommend that you file a Chapter 7. We do not agree that
there is a moral or ethical basis to have you re pay your
debts if you are not able to do so, if your efforts to do so
are proving fruitless, or if your financial condition is
causing family or marital problems. Our experience is that
more marital problems are caused by financial burdens than any
other basis. Your marital relationship and your
family's health are far more important than re
paying your debts in whole or in part.
Chapter 13 is
nothing more than an additional payment burden for up to 5
years. Chapter 7 is usually over in 4 to 6 months. If a
creditor files an objection to discharge and asks that its
debt not be wiped out, you still wipe out all of your other
debts in 4 to 6 months, with far fewer total court appearances
than in Chapter 13. Chapter 7 saves you money, stress, and
NOTE: Chapter 7 and Chapter 13 are commonly
called "consumer bankruptcies".
901-757-5557 for a free appointment to discuss your situation.
DEBT vs. UNSECURED DEBT:
A. Secured debt
is a debt where the Creditor can take back, repossess, or foreclose
an item in satisfaction of his debt. In other words, a mortgage
company can foreclose on your house; a bank or finance company can
repossess your car or household goods; a furniture sales company
can take your furniture back; or a jewelry store can take back your
jewelry. Where the Creditor extends to you the credit
to make the purchase for consumer goods, that is a secured
B. An unsecured debt
is a debt where a creditor cannot repossess an item or
foreclose on any item. Examples of this type of debt are: Credit cards,
such as Master Card, VISA, and American Express; Signature Loans;
Deficiencies on Cars that have been repossessed or houses that have
been foreclosed; doctor bills, hospital bills, lawyer bills; and suppliers
of small businesses that do not have a security interest in the goods.
III. CHAPTER 7:
Chapter 7 is a straight bankruptcy.
It is a liquidation. A liquidation is where the trustee collects
all of your assets and sells any assets which are not exempt,
or sells the assets and pays the debtor the amount exempted (if
there is a large equity in the asset). The net proceeds are used
to pay the Trustee a commission and to be distributed to
creditors. You wipe out your debts and get a "Fresh Start".
In a Chapter 7, after
you file it, if and when your Order of Discharge is signed by
the Court, it relates back to the day after you filed,
and from then you do not owe anybody
anything. Your debts are "discharged". All of your
secured assets go back to the creditor (if you wish
that to be the case). You do not owe any of your
unsecured debts after that time. Certain debts
cannot be discharged, such as alimony, child
support, fraudulent debts, certain taxes, certain
student loans, and certain items charged.
You must list all of your assets and all of your debts. We must now obtain your CREDIT REPORT to insure that we have all of your creditors. You are required by law to obtain the correct address of each CREDITOR (not collection agency) and certify their correctness and accuracy, or that debt may not be discharged.
You may keep certain
secured debts such as your car or your furniture or
house by reaffirming those debts. To do so, you
must sign a voluntary "Reaffirmation Agreement".
However, you cannot wipe out that debt (or
discharge the debt) for another six years. In other
words, if you decide that you want to keep your
house or your car or your furniture, and you
reaffirm the debt, you cannot bankrupt (or
wipe-out) that debt again for six years. You will
still owe that debt and you must continue to pay it
just as you were to continue to pay it before you
filed the bankruptcy. In order to reaffirm the
debt, you must also bring it current. In other
words, if you are three or four months behind, then
you must pay the back payments which are due in
order to reaffirm it. You can selectively reaffirm
your debts - you can state that you wish to keep
the house and the furniture, but that you want the
car and the jewelry to go back to the respective
Reaffirmation agreements can be set aside
during the earlier of 60 days after the agreement is filed with
the Court, or upon the Court's issuance of an Order of Discharge.
The law attempts to limit persons from
filing Chapter 7 if their income is too large. It is assumed that
the persons can pay some of the debt in a Chapter 13. Also, it requires
full disclosure of ALL assets and their correct value and disclosure
of ALL debts. There are worksheets which we must complete with you to determine if you qualify for Chapter 7.
You must ATTEND A CREDIT COUNCELING SEMINAR BEFORE you file your petition. This can be done on the internet, which we reccomend. You must obtain a certifican of completionand submit it to us.
A. Motion to Avoid
If you have borrowed
money and put your consumer household goods as
security (collateral) you can dissolve the lien to
the extent of your personal property exemptions
($4,000.00). You will thus be able to keep the
household goods and not pay the debt.
B. Motion to
If you own personal
property which has devolved to the point that it is
not worth much, you can ask the Court to allow you
to pay the actual value of the property to the
Creditor. This is called "redeeming" the property.
For a payment of $100.00 or so, you can thus keep
the secured property and wipe out the debt.
C. Motion to Amend
to Add Creditor
The Court will allow
you to add a creditor which you forgot to list.
This should be done before the Order of Discharge
IV. CHAPTER 13
(Wage Earner) Bankruptcy:
We do not recommend filing Chapter
13 unless there are absolutely no alternatives available to you.
The administration of the Chapter 13 plans by the Court and by the
Chapter 13 Trustee can be frustrating. Our clients have
reported to us that it is very difficult to understand the information
furnished, when you can get the information, and the Chapter 13
Trustee's office and the Courts will have both you and the lawyer
in Court on many occasions, and many times you will have to
wait half a day on each of those occasions in a big room similar
to a train station terminal (but not as big).
A Chapter 13 bankruptcy used to be called
a "Wage Earner" plan. It is a type of bankruptcy where you pay out
your debts for no more than 5 years.
A Chapter 13 Plan is
like a consolidation loan at a bank. In a
consolidation loan, you borrow the money from the
bank, you pay off your creditors all at once , and
you pay the bank back each month at
$100.00/$200.00/$300.00 per month or whatever the
amount necessary to pay off the loan.
In the Chapter 13 plan the Chapter 13
Trustee is the bank. You pay your $100.00/$200.00/$300.00 or whatever
the amount to the Chapter 13 Trustee each month. He takes each payment
and divides it up and pays your creditors. Secured creditors get
100 cents on the dollar plus interest. Unsecured creditors also
get 100 cents on the dollar, unless we can show that because of
the amount of income and expenses you cannot fund a Chapter 13 plan
sufficiently to pay out 100 cents on the dollar. In that case the
unsecured creditors may get less than 100 cents on the dollar: 70%..50%..
or even 10 cents on the dollar. There is an automatic injunction
when you file your Chapter 13 which stops any creditor from suing
you, from issuing a garnishment against you, from repossessing your
car, from foreclosing on your house, or from doing any other act
to collect the debt. This automatic injunction is what makes the
Chapter 13 plan work by keeping the creditors away from the debtor.
If your property (such as a car) was
repossessed before the filing of your Chapter 13, we can ask the
Court to Order the creditor to return the property to you. It can
take 3 to 4 weeks to obtain possession of your car, and you will
probably have to pay repossession and storage fees which have accumulated
to regain the vehicle.
for a free appointment to discuss your situation.
automatic injunction is in effect on all bankruptcies. Anytime you
file a petition for relief in the Bankruptcy Court, there is an
automatic injunction preventing any creditor from doing anything
to collect a debt. However, if you have filed Chapter 13 more than once in the last year, the automatic stay will not be in effect for as long as allowed prior to 2005.
VI. TYPICAL RECOMMENDATIONS
Typically, we see two
situations develop in Consumer Bankruptcies.
A. The first situation
is where a client has secured debts in which he is
current or only one or two months behind. In other
words, he may be one or two months behind on his
house note, one or two months behind on his car
note, and the same for his furniture and jewelry
note. However, he comes to us and says "I have been
sick and I have a tremendous amount of medical
bills (unsecured debt)"; or "I'm going through a
divorce (or some sort of domestic problem); and I
am at my limit on all my credit cards and I owe a
tremendous amount" (of unsecured debt). He says if
he just didn't have all of this unsecured debt and
that if he wasn't making monthly payments on this
unsecured debt, then he would be able to make his
payments on his secured debt. In that instance, we
recommend a Chapter 7 straight bankruptcy because
he is able to discharge all of the unsecured debts
and obtain a "Fresh Start". After reaffirmation of
this debt and payment of delinquent installments,
he can easily keep up his monthly notes.
B. The other situation
is where the client arrives and states that he is
three or more months behind on his house note,
three or four months behind on his car note,
several months behind on his jewelry and furniture
note, and that even if he discharged all of his
unsecured debts he still would not be able to bring
his secured debts current. He may not even have any
unsecured debt. However, he does not wish to lose
his assets, but merely needs time to pay off any
arrearages that he owes. This person is a candidate
for a Chapter 13 wage earner plan. It allows him to
pay off his debts and to preserve his assets. That
is our recommendation in such a
C. There is a gray
area in between the two recommendations. Many
people also feel that they have a moral and ethical
obligation to pay out their debts. In those
circumstances, a Chapter 13 (Wage Earner) Plan
would be our recommendation. In the gray areas, it
is largely a decision of the client.
D. If the Bankruptcy
Chapter that you choose does not work out, you may
be able to convert to another Chapter. You have the
absolute right to dismiss a Chapter 13, or to
convert a Chapter 13 to a Chapter 7.
Government issued student loans
are not dischargeable EXCEPT FOR a hardship discharge. The debtor
must file a complaint to determine dischargeability. This is not a
part of a simple Bankruptcy filing. Additional attorney fees would
be incurred. It may be the case that the debtor would not have this
cannot be discharged in a Chapter 7 straight
However, under certain
limited circumstances, Federal Income tax can be
discharged in bankruptcy if they are more than
three calendar years old, all tax returns have been
timely filed, and the tax has not been assessed by
the IRS within the 9 months before the filing of
the Bankruptcy petition. Liens placed by the IRS
can also prevent discharge. You need to consult
with the attorney if this is a problem.
Obviously, taxes CAN
be paid out in a Chapter 13 wage earner plan and
the IRS can be stopped from enforcing any liens or
other collection procedures by the filing of the
Chapter 13 Wage Earner Plan.
A complaint to determine the dischargeability
should be filed. This is not a part of the simple Bankruptcy filing.
Additional Attorney fees would be incurred.
IX. BANK ACCOUNTS AND ASSETS:
Any time you file a bankruptcy, if you
have a checking or savings account or any other kind of deposit
account with a bank to whom you owe any money for a loan or credit
card or other matter, then you should close out your checking and
savings account and certificate of deposit or any other account
that you have, and move it to a bank to whom you owe NO money. This
will prevent that bank from obtaining a set-off of your funds.
Assets that are not exempt will be seized, sold, and distributed
to creditors by the trustee in a Chapter 7. If you are an independent
contractor, or sole proprietor, monies that you earned from a contract
before you filed your petition are assets which the Chapter 7 Trustee
can take and distribute to creditors.
for a free appointment to discuss your situation.
X. CHAPTER 11:
Chapter 11 is a reorganization of the
finances of the debtor. It is designed for an individual with substantial
assets or doing business, a partnership, or a corporation. It is
a method of paying back debts over a period of time.
It is a democratic
procedure where creditors are allowed to vote on
whether to accept or reject the plan proposed by
the debtor. Sometimes, a plan can be "crammed down"
over the creditors' objections.
The Debtor has 120 days from the date
of filing to propose a plan. This is a "breathing" period when virtually
no action can be taken against the debtor except for discovery of
information. Certain relief is available to Creditors in certain
limited situations, especially involving cash collateral.
A proposed Chapter 11 Plan can be denied
confirmation if not approved by vote of the creditors, or it fails
to meet certain guidelines required by law. New plans can be proposed.
Chapter 11 involves
quite a bit of paperwork and is extremely
expensive. It requires the debtor or its officers
to attend many Court appearances.
Because of the
complexity and expense of this type of Bankruptcy,
a conference should be scheduled with the attorney
for additional information.
XI. CHAPTER 12:
Chapter 12 is a
Bankruptcy for family farmers. It is a cross
between Chapter 11 and Chapter 13 where a payout
plan is utilized.
Because of the
complexity of this type of Bankruptcy, a conference
should be scheduled with the attorney for
Chapter 7 discharge
can be denied by the Court under certain
circumstances such as concealing property,
destroying or falsifying records, or fraud. These
also can be criminal matters.
A discharge under Chapter 7 can also
be denied as to specific debts when a creditor files an "Objection
to Discharge." Only that creditor's debt or a portion of that debt
may be kept from being "wiped out." Examples are certain taxes,
support, loans obtained by false financial statements or by fraud,
and loans obtained when you are insolvent ( that is, when you borrow
money by loan or by credit card and your debts exceed your assets-at
the time of the loan-, and you are unable to repay the money borrowed).
It is a criminal offense in Tennessee
to sell secured goods, but not to give them
as gifts or throw them away.
Real Estate can be sold by the
trustee in a Chapter 7 if there is a large equity in the property.
This sale can occur after the discharge is granted.
Proceeds from a personal injury
or other lawsuits must be paid to the trustee in a Chapter
7 if the net proceeds exceed $7500.00 ( the amount of your exemption
or personal injury). Many other lawsuits do not have an exemption.
Consult with your attorney about this.
A proposed Chapter 13
Plan can be denied confirmation (approval by the
Court) if the Court, after a hearing, feels the
proposed plan to be unfeasible (not enough
available income to fund the plan), not proposed in
good faith, or not paying the correct amounts
according to the law.
A proposed Chapter 11 Plan can be denied
confirmation if not approved by vote of the creditors, or if it
fails to meet certain guidelines required by law.
for a free appointment to discuss your situation.
A Bankruptcy will stay
on your credit record from the time of filing until
the credit reporting agency's roll over period.
This is usually eight years, and can be as much as
There are always other circumstances
that need to be addressed and questions that need to be answered.
Please feel free to ask the attorney what happens in these circumstances.
When you appear in Court, dress conservatively
and maturely. A coat and tie are preferred on men, and a dress is
preferred on women. Court is not a place for show. Do not over-dress.
Keep jewelry to a minimum. Do NOT wear furs. Do NOT wear expensive
Do NOT wear: shorts, tank tops, sandals,
sleeveless shirts, or T-shirts.
Talk to another attorney
and talk to us.
Judge the difference.
WILLIAM A. COHN
A Memphis Bankruptcy Attorney
Bankruptcy Lawyer Memphis
Member: American Bar Association
Member: Commercial Law
League of America
Author of: "Deferring Vesting of
Property in a Chapter 13 Wage Earner Plan"
Commercial Law Journal
Mid South Equipment Sales, Inc.
Blackie's Body Shop,
Mid South Equipment Rentals, Inc.
One Memphis Place
Hayes & Sons Body Shop, Inc.
Hickory Hill Shopping
Old Southern Tea Room,
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