Bankruptcy Litigation

At the Bankruptcy Law Offices of James Schwitalla, P.A., we specialize and handle only bankruptcy and debt related matters. In most cases, the matter will be the preparation and filing of the bankruptcy itself, but at times it is the representation of those affected by someone else’s bankruptcy filing or even their own that the Debtors filed with another attorney. Bankruptcy litigation happens when there is a conflict or lawsuit inside of a bankruptcy case.

These actions can include, but are not exclusive to:

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Negotiations and Litigation with Chapter 7 Trustee

The chapter 7 trustee has a great deal of power in a chapter 7 proceeding to investigate and seek out assets to provide payments to a portion or all of the unsecured creditors of the chapter 7 debtor. For chapter 7 debtors who neglected to disclose assets, who have family members with assets that are being pursued by an aggressive trustee, or chapter 7 debtors who filed a chapter 7 bankruptcy pro se or without the proper guidance, new representation for the litigation with the chapter 7 trustee may be necessary to ensure that the chapter 7 bankruptcy case doesn’t leave the debtors in a far worse position than before the case was filed.

Preference Actions

A preference action is an adversary proceeding usually filed by the chapter 7 trustee. It is essentially a lawsuit filed inside of the bankruptcy case. A preference action is filed when the chapter 7 trustee suspects, or has reason to believe, that there has been a recent prepetition payment to a creditor of the debtor that jeopardizes the equitable distribution scheme contemplated by the bankruptcy code. Preference actions are not for the purposes of establishing that the debt was not valid, but rather than the creditor was favored or paid while other creditors received nothing.

Preference defense is possible and extremely time sensitive. When a complaint is received, the defendant needs to seek out the advice of a bankruptcy specialist immediately to avoid a default judgment and having to pay funds into the bankruptcy estate that the defendant may have been able to keep with proper representation.

Fraudulent Transfer Actions

The chapter 7 trustee will not only look at the assets owned by the debtor at the time of filing, but also the transfers by the debtor in the four years prior to the bankruptcy filing. The trustee will take interest in certain transfers where there was less than a reasonably equivalent value received by the debtor at the time of the transfer.

If the trustee decides that the transfer was actual or constructive fraud, then the trustee will file an adversary proceeding to reverse the transfer or claw back money in the amount of the value that the debtor should have received to bring the money back into the estate to provide for distribution to creditors.

A prior defense for the defendant by an attorney that specializes in bankruptcy is important because the trustee should have to prove to the court that the transfer qualifies as a fraudulent transfer and the value at the time of the transfer, if the transfer does qualify as fraudulent, should not be left to the party with the most to gain from a high value.

Contested Motions to Value

In a chapter 13 case, a debtor may seek to value the lien of a secured creditor (such as homeowner’s association or mortgagee) based on the value of the secured creditor’s collateral. When the value is reasonable and the terms are acceptable, then a secured creditor may not feel it needs representation. However, when the secured creditor’s ability to collect as a secured or unsecured creditor in the case is jeopardized by an unreasonable request or value, then the secured creditor may want to retain a bankruptcy specialist to ensure the creditor is receiving maximum recovery in the case.

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We are a debt relief agency. As bankruptcy attorneys in Miami, we help people file for bankruptcy relief under the Bankruptcy Code.