Secured debt, or debt backed by an underlying asset, is treated differently in bankruptcy than other kinds of debt.  If you are a creditor and believe that one of your customers/debtors is about to file for bankruptcy, we will help you to secure as much of that customer’s debt as possible before a bankruptcy petition is filed.  If you are a debtor with secured debt, we will work with you to develop options that best fit your strategic needs.  In some cases, you may have no problem surrendering the collateral and discharging the underlying debt,  while in other cases, you may want to keep the collateral by reaffirming the debt or redeeming the debt.  Whether you are a creditor or a debtor, we will work with you so you can best understand your options in regards to secured debt and select a path that best fits your needs given your specific circumstances.

Unsecured debt, or debt not backed by an underlying asset, is often wiped out in bankruptcy proceedings.  As such, we work with creditors to secure unsecured debt prior to a debtor’s filing for bankruptcy.  This often requires filing a complaint and obtaining a judgment against a non-paying debtor.  Once a judgment is entered by a court, then we can work to create and perfect a judgment lien to secure the judgment.  We also work with both debtors and creditors to negotiate unsecured debts and to review and draft contracts to determine what will happen if the other party needs to file for bankruptcy.

While bankruptcy can severely threaten the life of your business, it can also offer significant opportunities for both you and your creditors to negotiate mutually beneficial deals. If you are a creditor, a debtor’s bankruptcy can allow you to negotiate for potentially profitable securities instead of being stuck with debts that you were about to write off as losses. If you are a debtor, bankruptcy grants you both relief from creditors’ actions and additional time to devise reorganization plans since creditors typically do not want to wait and see what they recover, if anything, at the end of a bankruptcy proceeding.  At Lex Concordia, we see properly handled threats to your business as opportunities, so we will work with you to negotiate deals that maximize your business’ value outside of the courtroom.

Chapter 7 bankruptcy involves the cancellation of your debts and the liquidation of your business.  As such, it is usually seen as an option of last resort.  We work with both debtor and creditors in this most extreme bankruptcy procedure to produce the best results for all parties involved.

Chapter 11 bankruptcy allows a debtor to reorganize its financial assets.  As soon as a petition is filed, debtors are granted an automatic stay from the enforcement actions of creditors.  We work with debtors to develop plans to reorganize your financial obligations while keeping your business running, usually through the sale of certain assets to pay down debt and refinance existing obligations.  Chapter 11 bankruptcies require great strategic vision and negotiation skills to get two-thirds of creditors in number and fifty percent of creditors in dollars to approve the plan, along with meeting the statutory requirements under the Bankruptcy Code.  At Lex Concordia, we will work with you to develop a strategic vision that allows your business to continue operations without its crippling debt obligations.  If you are a creditor, we also work with you to draft competing plans of reorganization to further negotiations between you and the debtor until a favorable result is reached.  Our ability to understand the competing interests involved in a Chapter 11 restructuring allows us to best develop a strategy that fits your specific needs.