Bankruptcy cases for businesses and consumers

We handle complicated consumer bankruptcy cases for business owners and high income individuals, and we handle simple bankruptcy cases for family debt. We handle Chapter 11 reorganization bankruptcy cases for individuals and businesses. We wind down businesses through bankruptcy with an eye to protecting principals and guarantors. We are a debt relief agency providing bankruptcy representation and bankruptcy case filing for individuals and businesses.

We provide personal legal bankruptcy care to each bankruptcy client and we offer a significant history in the field of complicated consumer bankruptcy cases, creditor groups in bankruptcy cases, business bankruptcy cases and tax related bankruptcy cases. Our goal is to see our bankruptcy clients live debt free either through bankruptcy or debt settlement.

We offer posturing for those wishing to structure their affairs to maximize their financial survival in the event of bankruptcy. We offer advice related to the protection of businesses from customer bankruptcy.

Creditor representation in bankruptcy cases

We provide experienced and aggressive bankruptcy representation for creditors and we are experienced in representation of creditor groups. We offer service as an elected trustee. We offer contingent fees in selected bankruptcy proceedings.

We are bankruptcy lawyers

Charles Chesnutt has practiced exclusively bankruptcy and bankruptcy related law since 1986. He has been been board certified by the Texas Board of Legal Certification in Business and Consumer Bankruptcy Law since 1981. Carolyn Chesnutt has practiced bankruptcy law since 1998 and is licensed in the Northern and Eastern Districts of Texas (Federal Courts). Carolyn Chesnutt practices separately.

972-735-0757
800-488-8752

EMAIL:

CHARLES CHESNUTT
CAROLYN CHESNUTT

COMING SOON - Carolyn Chesnutt's article on Bankruptcy and Children. A summary follows.

The Effect of Financial Stress is similar to the effect of divorce in the emotional damage caused to the children in a family. According to Elizabeth Warren, professor of law at Harvard Law School, more children will be listed in their parents’ Bankruptcy than will sign up for Little League, adopt a dog from a humane society, or get braces on their teeth. See Elizabeth Warren and Amelia Warren Tyazi, The Two-Income Trap, Why Middle-Class Mothers and Fathers Are Going Broke (New York: Basic Books, 2003) page 176-177.

In families facing financial difficulties, the children are very sensitive to the emotional, financial, and other difficulties that the parents experience.  This is true of whether the family has an intact married couple or a single mom or dad.  If you add financial difficulties to a family’s normal stresses in today’s culture, the children’s suffering is often increased exponentially.

Middle Class Families filing Bankruptcy never planned or expected to encounter such devastating financial difficulties.  The children are normal children who go to school, laugh, and play, and look to their parents for wisdom, guidance, security, and stability.  It has probably happened to many of your friends and acquaintances and you are just not aware of it.  Bankruptcy still causes much shame and people want to hide their troubles.

Parental methods of helping their children face financial obstacles differ greatly.  Some parents are so embarrassed that they decide not to tell their children anything.  This can cause greater harm than the disaster itself.  Without information, knowledge, or guidance, children feel insecure, become isolated, and begin to suffer from deep-seated shame.  Wounds and scars may be inflicted which take a lifetime to heal.

Children are intelligent, and while immature, they can be extremely sensitive to the reality of issues the facing their family. A better approach is to be honest with them.  The family should make a plan together and work towards it hopefully and confidently.

Bankruptcy can end the stress that is so damaging to children - and marraiges. It can give the family a realistic plan to overcome the difficulties and ultimately recover successfully.

Bankruptcy can help by including the children in the decision-making process you can lessen the trauma experienced by them.  Depending on their ages, the advantages that knowledge, awareness and accurate information given to adults can benefit children as well.  Children whose parents respect and trust them enough to involve them in the families’ struggles will be prepared to overcome their own obstacles in adult life and be successful.  

"Bankruptcy is often the first step to financial recovery. "
        Charles* and Carolyn Chesnutt

*BOARD CERTIFIED IN BUSINESS AND CONSUMER BANKRUPTCY LAW BY TEXAS BOARD OF LEGAL SPECIALIZATION SINCE 1991

BANKRUPTCY and FINANCIAL NEWS

Health care reform. We have seen numerous clients who had to file bankruptcy because of medical debt. All of them were honest people and many had solid jobs and reasonable income. Many people simply could not pay the premiums to start with and others lost their insurance (or the premiums tripled) when they contracted serious illnesses.

The problem is that the medical insurance system is inherently flawed. Medical insurance is set up to pay for medical expenses, but it rewards the insurance companies who can avoid doing so. Medical Insurance companies make enormous profits by not paying for medical care. It is a contractual cat and mouse game: insurance companies sell contracts that take in as much money as possible and they pay as little as they can get away with. And then they bail out of their contract if you have a serious illness. We pay them to make us safe, but they are rewarded for deserting us in time of need. There is something profoundly wrong with this system.

Many people are without medical coverage because the premiums are just too high. The premiums are too high because a major portion of the premiums goes to fund investments, to purchase insurance buildings and advertising, to pay thousands of clerks and to give away multi-million dollar bonuses to executives who arrange to pay as little actual medical expenses as possible. Rather than giving even more money to this system, the government should create its own public health care system and pay that money directly to doctors and nurses and hospitals. Think about it. What do medical insurance companies actually contribute to health care? All they do is collect as much money as possible, pay as little as possible and do paperwork. That is all they do. And then we pay them trillions when their investments go sour. There is something profoundly wrong with this system.

Socialism. The federal government has purchased controlling interests in insolvent businesses as part of the recent bailout. Many people equate this purchase of controlling interests to power grabbing and the seeds of socialism. However, from the perspective of insolvency law, the transfer of controlling interests to cash investors is far from unusual. It happens in many Chapter 11's and in every buy-out. Indeed the government would be woefully remiss if it failed to get something for the money that it is spending. Allegations of socialism are premature.

Chrysler Chapter 11. On April 30, 2009, Chrysler filed a Chapter 11 and General Motors is expected to follow. This means that the massive infusion of stimulus money was successful in keeping these two businesses in business and out of bankruptcy for an extra 6 months.

Noble sounding politicians of both parties can orate all they want, but when bankruptcy happens, reality strikes hard. For all of their apparent intellect, our leaders made the classic error; they took billions dollars of other people's money and threw it at failing businesses. And what happened? The businesses failed anyway.

So, for our billions, we, the taxpayers, now own what is called the "equity" in an insolvent company that is liquidaing much of its assets in a Chapter 11.

As equity owners, we have a claim that is junior to the general unsecured claims in the bankruptcy. The Bankruptcy Code Section 1129(b)(2) states that the holders of claims that are junior to the general unsecured claims will not be paid anything unless all of the other claims (debts) are paid in full.

But the debts of Chrysler will not be paid in full, so we, the taxpayers, will most probably get nothing from the Chrysler Chapter 11 unless we are willing to put in more money. So, we have now mortaged our future for the purpose of permitting these failing businesses to continue doing business during the election.

Our leaders also made the second classic error; they failed to protect our investment. If you must throw money away, at least do what you can to ensure that you are in some measure protected.

If you are thinking about a Chapter 11 for your business, don't make the same mistakes. Save your personal funds instead of buying another 6 failing months for a dying business. You will need your personal funds to start up your next business - or you will need them to pay your portion of the tax that will be imposed to pay for the Chrysler / GM bailout. May 30, 2009.

The promised bankruptcy bill. Again the taxpayer has been hoodwinked by the politicians who promise one thing and deliver another. The Senate recently defeated the bankruptcy amendment which would have permitted Chapter 13 debtors to alter the terms of their mortgages so that they could pay (over time) the same value that the mortgage companies would have received if they had foreclosed. This would have permitted the taxpayer to keep his house at its deflated value. So what has really happened? The banks and financial system knowingly sold trillions of dollars of practically worthless paper, used the profits to pay themselves salaries as much or more than $1 million per month, and caused a wholesale devaluation of homes in the entire country. The taxpayer then paid trillions to the banks who were dumb enough to purchase the worthless mortgages. And now, when the time comes to let the same taxpayer - now in bankruptcy - pay out his mortgage based upon his home's deflated value, the banks spend the very money that the taxpayer has given them on lobbyists in order to strike the taxpayer yet again. This bill, this one benefit that was supposed to come directly to the taxpayer (and he had to file a bankruptcy to get it), was Obama's promise, but, according to news reports, Obama withdrew his support at a crucial time and the bill failed in the face of Republican as well as Democratic opposition.

Excessive regulation "slows down financial innovation and thereby undermines economic growth in the wider economy" said Jacques de Larosiere, a conservative French treasury official, former managing director of the international monetary fund (National Review, May 4, 2009, page 20). But he also urges reasonable regulation and oversight to bring accountability to government recognized credit rating agencies known as NROSO's. These rating agencies rate the bonds and securities that banks buy and sell and they are currently unregulated in the U.S. Much of the recent financial crisis is a result of wholesale buying and selling of over-rated securities based upon grossly misrepresented values. This was made possible by deregulation (Republicans) and by the requirement for mortgage lenders to lend money to people who could not pay it back (Democrats). Neither of these have been fixed. Mix them together with Wall Street sharks and the victims (the people) pay the tab. May 16, 2009.