My very unique case: Filed Chapter 11 as an individual

[goingcrzy]

Thanks HHH!

I'll try to use the cost as another reason I can't afford an 11. I am sure there are not many 11s that are paying 200 bucks a month back to creditors!

Hopefully the judge will agree with me

[Blitzer]

I have been a lurker on this forum for a while and just joined specifically after seeing this thread.

I have been banging my head against the wall so far, trying to find a CH 11 specialist here in San Diego area who might be interested in my "fast track" CH 11 case, but to no avail! I have been quoted retainer fees ranging from $50K to $100K which for my debt level seem quite ludicrous.

My unsecured (PGed) debt on several business lines of credit and business credit cards is about $525K which is way over the $336.9K limit for CH 13. My secured debt is only about $500K (mortgage on my property), which is way under the CH 11 secured criteria.

To cut a long story short, I do have a viable business and I reckon that it is possible to put together a decent plan of reorganization. I work from home and I have no other debts, via a vis, lease commitment, equipment purchases, etc. All debts are institutional to major banks, CC Cos. I have been carrying the debt load from past business failures and have been paying on all this unsecured stuff till I basically (almost) ran out of personal funds to service these huge debts.

My income and earnings make it possible for me to cram down in a successful CH 11 to make a payment plan which is better than a pure CH 7 liquidation. The danger with CH 7 is that I stand to lose too much by way of my losing house where I work from too (the none exempt equity; in CA my exemption is 75K), plus putting the business in danger too, although the business itself (not the cash in the business bank account bank) plus perhaps its inventory, would be absolutely useless to a CH 7 trustee (I am the business and it is an extension of my know-how. The business entity is an LLC with 3 members including the wife and I am on a proper payroll thru the LLC).

It is my opinion that in a CH 11, my creditors stand to gain more thru a 5 year plan than a pure liquidation. Obviously the self interest is to preserve the house and the business, hence my efforts for a CH 11.

I have honestly spent a good few thousand dollars so far in atty consultation fees (these attorneys do not offer free consultation and wish to see the case file before hand) and all that I keep hearing is NO! or some exorbitant fees (which is basically a polite/impolite way of saying NO). In ost cases, these attorneys do not deal with Snmall Guy CH 11 cases and only want the large and meaty ones.

Seemingly unlike many in here, I would take a CH 13 in a heartbeat if I could, but can not!. Majority of my unsecured debt is business related, so in CH 7 the Means Test probably becomes inapplicable, if I could prove that at least 50.1% of my debt is none consumer based debt.

I wrote this post on the fly and it is not as articulate I would probably wanted it to be. If anyone has any suggestions or other input, I will be glad to hear them. If I could somehow negotiate down some of my unsecured CC debt to bring the unsecured debt to 336.9K, I would do it, but that would be a very tall order (I will have to settle 200K of that debt for about 20 cents to 25 cents in a Dollar). I started to default from mid July and the calls have started, but no one is prepared to negotiate (so soon). There are no pending litigation at this point to force me into BK immediately, but I will be sued for sure in about 6 (more or less) month down the road.

[Blitzer]

It would be very neat if the OP stopped by in here and could give me a holler as to how he proceeded with his CH 11. Darn it, if I could do it on my own, I'd hit the books and do it myself. I am doing all that stuff like P&L and quarterly reports anyway!. All I know is this: filing for a CH 7 BK and putting myself at the mercy of a CH 7 trustee immediately upon filing does not feel like the smartest thing to do (for me). However, if the 11 has to be converted to a 7 because of aggressive + adversarial creditors and my lack of fire power, that is a chance that I am willing to take (and may be I learn something in the process for the sake of the "greater good" as I tend to enjoy learning from tough situations)

[Blitzer]

BTW, for those who may be interested as to how I managed to get myself in over 500K of unsecured debt, I would just like to explain that most of the debt relates to a business that failed in 2004. I have been carrying the debt burden (servicing monthly payments) by depleting personal finds and "rubbing Peter to pay Paul". As of about a month ago, I decidedly put a stop to that kind of insanity (and denial) fully knowing as to where the chips may fall. Not looking for sympathy in here or to get confrontational with anyone, just wishing to get in touch with the OP or anyone else who may be able to tell me something (positive or negative) that I have not heard or thought of. TIA...

[justbroke]

I have been carrying the debt burden (servicing monthly payments) by depleting personal finds and "rubbing Peter to pay Paul".

Hmmm, perhaps that's what got you in trouble.

[Blitzer]

Hmmm, perhaps that's what got you in trouble.

I wrote that when it was too late in the Eve and did not spell check for the correct use of word. Yes, "rubbing" Peter would get most fellows in trouble