Chapter 7 bankruptcy liquidation

Law Office of 
Charles E. Andersen

Chapter 7 is also know as straight bankruptcy if you don't want to repay any debt, chapter 7 is an option to consider
Chapter 7 is also called a fresh start bankrutpcy
The US Trustee is a participant in a chapter 7 Hon. John C. Ninfo chief US Bankruptcy Court Judge US Bankruptcy Court
Law firm

of Charles E. Andersen








Filing a Plan:  In a voluntary case, the debtor may file a plan of reorganization with the Chapter 11 petition, or at any other time. In an involuntary case, the debtor may file a plan at any time, within the exclusivity  period;  Unless a trustee has been appointed in the case, the debtor has the exclusive right to file a plan for the first 120 days after the order for relief;

b. Other proponents:  A plan may be filed by any party in interest (but not by the United Slates trustee ), including the debtor, the trustee, a creditor, a creditors' committee, an equity security holder, an equity security holders' committee, or an indenture trustee, under any of the following circumstances;

(1) Where it Chapter 11 trustee has been appointed

(2) Where the debtor has not filed a plan within 120 days after the order for relief ; or

(3) Where the debtor has not tiled a plan and obtained the acceptances of every impaired class of claims or interests within 180 days after the order for relief ;

c. Exclusion or reduction of lime: for cause shown by a party in interest, and after notice and a hearing, the court may shorten or lengthen the 120-day period or the 180-day period referred to above.

Classification of Claims or Interests: The Bankruptcy Code requires that a Chapter 11 plan classify the claims as well as the equity interests in the case.  However, the statutory provisions regarding the manner of classification are relatively brief, and much case law has developed in this area.

a. "Substantially similar" claims or interests: A claim or interest may be placed in a particular class only if it is substantially similar to the other claims or interests included in that class.  This provision has been construed by two discordant lines of cases.

(1) Majority view: The interpretation by most courts is that Bankruptcy Code section 1122(a) does not compel the classification of all substantially similar claims together in one class, and thus, separate classes of claims may be designated where the classification is for a reasonable and bona fide purpose (i.e., a legitimate business reason) and where each class is homogeneous. [In re AG Consultants Grain Division, Inc., 77 Bankr. 665 (Bankr. N.D. Ind. 1987); In re U.S. Truck Co., 800 F.2d 581 (6th Cir. 1986)]

(a) Example: Debtor Corporation files a voluntary Chapter 11 petition and a plan of reorganization that proposes the designation of the following classes: Class I, consisting of National Bank, whose claim is fully secured by Blackacre; Class II, consisting of unsecured pre-petition wage claims entitled to priority; Class III, consisting of all general unsecured claims that do not exceed $100; Class IV, consisting of all unsecured claims of tort victims in excess of $100, Class V, consisting of all the other general unsecured claims in excess of $100. Under the rule discussed above, the proposed classification scheme should be permissible if the court finds the existence of a valid reason for separately grouping the unsecured claims of the tort victims.

(2) Minority view: A more restrictive interpretation adopted by some courts is that, except for certain small claims , similar claims must be classified together; separate classes of unsecured claims are permitted only where the claims are of differing legal status. Thus, for example, under this view, an unsecured pension fund claim would have to be placed in the same class with the other unsecured claims in the case. [B.C. 1122(a); Granada Wines, Inc. v. New England Teamsters & Trucking Industry Pension Fund, 748 F.2d 42 (1st Cir. 1984)]

(3) Gerrymandering: Separate classification should he denied where the purpose for designating multiple classes of unsecured claims is to achieve confirmation by the creation of a class of impaired claims that will vote for the plan. This purpose, alone, is likely to be considered an improper basis for classification because of its manipulative nature.

b. Specific types of claims or interests;

(1) Secured claims:  Usually, where secured creditors' liens are in different property or are entitled to different priorities in the same properly, each secured claim is placed alone in a separate class.

(2) Priority Claims: Administrative expenses, involuntary ease gap claims, and seventh priority i.e., unsecured, pre-petition tax claims are excepted from the requirement of classification since the standards for confirmation require that the plan provide for such claims on an individual basis. However, third, fourth, fifth, and sixth priority claims (i.e., wages, contributions to employee benefit plans, claims of grain farmers and fishermen, and consumer layaways) should be placed in separate classes together with claims of equal priority. The Code is silent as to whether eighth priority claims (i.e., capital requirements of an insured depository institution) should be classified.


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obtaining a chpater 7 discharge the bar date has passed arriving at the office
I hope he's in



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Chapter 7&13

If you qualify



  • Creditor Harassment
  • Stop utility shutoffs
  • eliminate payments on unsecured debts.
  • Improve bad credit
  • Surrender car, and other secured collateral without incurring a "deficiency"

**For Chapter 13 cases with wage order and balance paid through a trustee as part of a partial re-payment plan and not paid directly to the attorney. Court filing fee is extra.

  • Emergency Petitions filed
  • Ask to see a statement of clients rights and responsibilities


Free Consultation

Reasonable rates








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200 William St. STE 204A
Elmira, NY 14901
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