This PowerPoint is a summary of our E-Book "Bankruptcy 101" and covers important topics such as common misconceptions about bankruptcy, legal definitions of bankruptcy and insolvency, and takes a close up look at the differences between Chapter 7, 11 and 13. Also included is a special section on how to protect yourself in bankruptcy. Brought to you by the attorneys at TBRC Law in Alexandria, Virginia www.tbrclaw.com.

1. Bankruptcy 101
By the Law Offices of Tyler, Bartl, Ramsdell & Counts, P.L.C.
Copyright 2012

2. Bankruptcy Overview
Goals of Bankruptcy 101
• Explain facts and concepts related to Bankruptcy in everyday
language.
• Inform of legal proceedings in bankruptcy.
• Differentiate between forms of Bankruptcy.
Bankruptcy Discussion Points
• Define Insolvency.
• Clarify the term Bankruptcy.
• Explain different levels of bankruptcy.
• Importance of the Automatic Stay.
• Avoidance Actions By The Trustee.
• How Protect Yourself In Bankruptcy.

3. Misconceptions about
Bankruptcy
Common Misconceptions:
•Bankruptcy is a negative thing.
•Debtors and creditors do not want to help.
•Bankruptcy is the solution to debt
problems.
•Filing bankruptcy resolves all debt.
•Bankruptcy and insolvency are the same.

4. What is Insolvency?
• To declare a state of complete inability to
Insolvency Defined pay debt.
(classified as balance sheet or cash flow insolvency)
• Who – A company or person.
Balance Sheet
• What – Liabilities are greater than the assets or
Insolvency properties owned.
Cash Flow
insolvency • Who – Person.
• What – Unable to pay debts as they are due.
(Equity Insolvency)
May Result
Cash Flow Insolvency In Balance sheet Insolvency
If a business ceases conducting business because it is unable to pay bills.

5. Insolvency Explored
Qualifications for Legal Insolvency:
• Be unable to pay debs with current balance
• Be Unable to pay debt due to a lack of cash flow
• Be able to show assets are less than the amount of liabilities
Reasons for Filing:
• Unable to pay back lenders on time
• Decrease in cash flow
• Income is insufficient to cover expenses
Benefits of Filing:
• Government and debtors work towards a resolution
• Financial and organization structures are remodeled (not available in all
countries)
• Business may continue operating under a “declared protective
arrangement”

6. What is Bankruptcy?
Bankruptcy • The legal status or declaration of a person
or company that has been declared
Defined insolvent – unable to repay debts owed
• Who – A person or company
• What – A legal status referring to the entire
About process of the inability to pay off debts
Bankruptcy (Often imposed by the court not declared by individuals)
• Different types of bankruptcy filings are
available
* Some types of bankruptcy are not available to all individuals
Chapter 7 Chapter 9 Chapter 11 Chapter 12 Chapter 13

7. Bankruptcy Explored
Qualifications for Bankruptcy:
• Must be legally established to receive protection and
cooperation from others.
• Must legally prove a financial situations exists.
Reasons for Filing:
• Avoid the piece meal liquidation.
• Fairly and equitably distribute assets among creditors.
• Companies – Reorganize business debts, leases, etc. and
continue business.
• Individual – Provide a fresh start from preexisting indebtedness
Benefits of Filing:

8. Types of Bankruptcy
Summarized
• Involves liquidation of assets.
Chapter • Available to individuals or Companies.
7
Chapter • Debtor must be a municipality to qualify.
• Special Filing – Not available to most individuals or companies.
9
• Debtor’s debt exceeds limit of Chapter 13 or lacks regular income.
Chapter • Available to individuals or companies but is most commonly used by Businesses.
11
• Debtor must be a family farmer.
Chapter • Special Filing – Not available to most individuals or companies.
12
• Involves a payment plan from disposable incomes.
Chapter • Available to individuals.
13

9. Chapter 7 - Basics
Filing Fee: $306
Requires: Liquidation of the owner or individual’s assets.
Proceedings: A trustee is appointed to oversee and administer the estate and
collect, recover, and distribute assets according to rules of bankruptcy code.
Offers Companies: Priority to IRS to lessen personal tax liabilities.
Offers Individuals: Allows Individual debtor to give up nonexempt assets in
exchange for discharge of all dischargeable debts.

10. Chapter 13 - Basics
Filing Fee: $281
Requires: Individuals retain all property in exchange for making payments
from disposable income to a trustee for 3-5 years.
Proceedings: Payments are made to a Chapter 13 Trustee who distributes
payments to debtors according to the Chapter 13 plan approved by the
Bankruptcy Court.
Offers Individuals: Allows Individual debtor broader discharge options for
taxes at the completion of payments.

11. Chapter 11 - Basics
Filing Fee: $1,046
Requires: Debtor remains in possession of its own property and runs its
business in the ordinary course following the rules of the Bankruptcy
Code and Bankruptcy Court.
* Also known as a Debtor-in-possession (“DIP”).
Proceedings: The DIP can liquidate assets and pursue voidable
transfers if desired and a payment plan is established in which:
- Creditors claims are categorized into classes.
- Creditors need not receive 100 cents on the dollar.
Offers Individuals: Debtor receives a discharge from prepetition
obligations upon completion of the plan.
Offers Companies: Ability to reject leases for unprofitable locations
and maintain leases for its profitable locations.
* Offers specialized rules for “small business debtors” and “single asset real estate.”

12. Importance of the Automatic
Stay
An Automatic Stay
• Is awarded under filing any chapter of bankruptcy.
• Prohibits creditors from harassing a debtor during the period of the
bankruptcy case.
An Automatic Stay Protects Against
• Lawsuits,
• Foreclosures, and
• Any collection actions against the debtor.
Benefits of Automatic Stay
• Violating creditors will be held in contempt of the Bankruptcy Court
and are subject to damages.
• Awards a “do not harass” card until legalities are squared away such as:
• Repossessing a vehicle or possessions and/or
• Garnishing bank accounts.

13. Avoidance Actions By The
Trustee or DIP
Avoidance Actions to Generate Income and Pay Creditors
may be classified as:
Fraudulent Failure to Statute of
Preferences
Conveyances Perfect Limitations
Items used as
Any payment collateral to
Transferring made to a secure creditors Avoiding
assets to another creditor 90 days claims may be transfers prior
individual to prior to filing the voided unless to, on or after
avoid using claim must be “perfected” bankruptcy case
assets to pay returned and Perfected means a filed is closed or
creditors evenly finance statement dismissed
notifying others they
distributed have claimed a
particular asset

14. How Protect Yourself In
Bankruptcy
Ways to Guard Against Harassing
Creditors
•Attend creditor’s meetings to ask questions.
•Take the debtor’s deposition under F.R. Bankr. P. 2004.
•File a timely proof of claim.
•Enter an appearance in the case by filing a Notice Of Appearance.
•Seek relief using the Automatic Stay.
•Investigate Payment of Administrative Claim.
•Seek dismissal of a case.
•Object to the debtor’s discharge or dischargeability of the debt owed.
Protection Within Specific Claims
•Declare intention to surrender or retain a secured creditor’s collateral
(Chapter 7).
•Review Chapter 11 DIP’s monthly reports filed with the Bankruptcy Court.
•Seek appointment of a Trustee (Chapter 11).
•Ensure debtor has properly valued collateral (Chapter 11 and 13).
•Ensure claim is properly treated (Chapter 11 and 13).

15. Free Consultation
• General information on bankruptcy provides you with
knowledge, but knowledge does not provide you with a
personalized solution to debt problems.
• We have been serving creditors and trustees alike in the
Northern Virginia community since 1986.
• Our experienced law firm provides assistance with all types
of bankruptcy fillings.
• If you have questions about bankruptcy call for a free
consultation (703) 549-5000 or visit us online at
www.TBRCLaw.com
Schedule a Free Consultation Today