The Basics of Bankruptcy Exelon

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'For those working for Exelon companies and retirees alike, it's important to have a grasp of bankruptcy fundamentals, like the types of filings such as Chapter 7 and Chapter 13. This knowledge can offer insights into managing hurdles and help individuals regain control to pave the way towards a more stable retirement.' 'Employees of Exelon companies preparing for retirement should understand that bankruptcy isn't always an option. It provides pathways to recovery. With guidance and support in place, it can serve as a tool in overcoming significant debt while safeguarding future retirement security.'

In this article, we will discuss:

1. Exploring Bankruptcy.A glance at the regulations surrounding bankruptcy procedures for individuals and businesses of all kinds.

2. Exploring the Important Aspects of Bankruptcy Chapters. Explaining the Differences and Impacts of Chapter 7, Chapter 11, and Chapter 13 on Employees and Retirees of Exelon Companies.

3. Common Questions asked frequently and Key Points. Answering common queries related to safeguarding assets, impacts on credit scores, seeking advice, and recovering financially.

'What exactly does bankruptcy entail?'

Throughout our experience assisting Exelon workers and retirees over the years, we have consistently aimed to advise our clients on the steps to take in the event they need to declare bankruptcy – a responsible measure of preparedness for any unforeseen financial challenges that may arise. Bankruptcy encompasses a series of guidelines and court processes designed to help individuals and companies navigate their obligations effectively. The specific regulations governing bankruptcy can be located within Title 11 of the United States Code. The rules related to bankruptcy oversee the process of bankruptcy cases that occur in bankruptcy courts (as opposed to state-level bankruptcy courts).

Usually, in bankruptcy cases, the debtor chooses to file for relief themselves rather than the creditors pushing for it to happen through a court petition. This is quite rare. Creditors sometimes take action to push a debtor into bankruptcy through means. Once a bankruptcy petition is filed by either party, the creditors are generally not allowed to pursue any actions against the debtor or their assets outside of the bankruptcy process. Most collection activities, like foreclosures, repossessions, wage garnishments, collection calls, and debt collection letters are required to stop at this point.

In bankruptcy cases, there are two processes involved: Liquidation and reorganization. Liquidation involves selling off the debtor's assets that are not protected by law to pay creditors and clear debts. Reorganization allows debtors to keep their assets and repay debts in amounts over time.

During bankruptcies, when a person or entity declares bankruptcy, a trustee is usually assigned to oversee the process and legally control the debtor's exempt belongings referred to as the bankruptcy estate – although they don't typically take physical possession of them. Exempt property includes assets that debtors are allowed to keep during the asset liquidation phase of bankruptcy proceedings. Chapter 7 of the Bankruptcy Code deals with liquidation matters while Chapters 11 through 13 handle reorganization processes.

Chapters 7 and 13 are tailored for individuals and would provide insights for our Exelon clients to be aware of as they are commonly known as personal or consumer bankruptcies.

Different Forms of Bankruptcy Petitions

Chapter 7

Let's start by talking about Chapter 7 with our Exelon clients today! Chapter 7 is often referred to as 'bankruptcy'. It involves liquidation proceedings for both individuals and businesses alike. When a company files for Chapter 7 bankruptcy, it usually means shutting down operations unless they opt for reorganizing under Chapter 11.

People who meet the requirements for Chapter 7 can keep assets that are considered exempt while assets that are not exempt may be sold off to pay back creditors. Most Chapter 7 cases are uncomplicated where there are no exempt assets, and debts are forgiven outright except for certain types like most taxes, duties related to family support, and student loans. Chapter 7 usually lasts around four to six months and is known for giving debtors a new beginning.

Attention! It's crucial for our Exelon clients to understand that the 2005 Bankruptcy Act (Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) introduced a means test for Chapter 7 individual debtors dealing with consumer debts. As a consequence, a higher number of debtors no longer qualify for Chapter 7 and are required to seek bankruptcy relief under Chapter 13.

Chapter 13

Let's move on to talking about Chapter 13 with our Exelon clients. The Chapter 13 bankruptcy process involves individuals repaying their creditors either fully or partially over a period of three to five years. It's also referred to as wage earners' bankruptcy. This reorganization phase allows debtors to settle any payments. Even if the debtor's assets are not considered exempt, the debtor can keep them. After declaring bankruptcy and moving forward with the process, debtors must create a plan for reorganization that aims to settle all debts completely using their income resources fully. Chapter 13 carries a lighter weight on the debtor's credit record. If a debtor misses payments as outlined in the plan, the Chapter 13 case could be terminated.

Warning! It's crucial to note that our Exelon customers who have debts exceeding dollar thresholds cannot opt for Chapter 13 and must instead proceed with a reorganization under Chapter 11.

Chapter 12

We also suggest that Exelon customers look into Chapter 12 of the bankruptcy code, which is tailored for family-owned farms and commercial fishing ventures, for those businesses to reorganize under this chapter if they meet the criteria.

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Chapter 11

Chapter 11 bankruptcy is often chosen by businesses and partnerships that want to keep running but need protection from their creditors to stay afloat financially without halting operations. Essentially, Chapter 11 allows companies to reorganize and stabilize their finances over time. Typically, a trustee is not assigned in these cases; instead, the company takes charge as its trustee, granting it the power to make decisions without having to seek court approval. Committees are then established to represent creditors, investors, and other concerned parties. The company can present a restructuring proposal that needs to be accepted by both the committees and the court for approval. If the company's plan works out successfully, it comes out of bankruptcy; if not, it usually goes into liquidation.

Chapter 15; The Chapter

The Bankruptcy Act of 2005 introduced a set of regulations called Chapter 15, Other Cross-Border Cases, to replace the now-defunct Bankruptcy Code section 304. This chapter primarily caters to companies (like corporations) that have assets or activities in the United States or its territories.

Chapter 20

Chapter 20 isn't actually a part of the Bankruptcy Code anymore, but in the past, some people would file for Chapter 7 to clear debts and then quickly follow up with a Chapter 13 to work out payment plans for secured debts like home loans and car payments – the combination of which was sometimes referred to as '20' due to the combined chapters involved in this strategy, which is no longer allowed since the changes made in the Bankruptcy Act of 2005.

Frequently Asked Questions

Am I at risk of losing it all?

Some individuals who are part of corporations listed in the Exelon might worry about losing everything in the event of declaring bankruptcy; however, you needn't be overly concerned about such a situation as some of your possessions are safeguarded from being seized for repayment purposes by laws governing exemptions at both state and federal levels. In states where these laws apply differently and give debtors options regarding which exemptions to utilize for safeguarding assets, some may allow a choice between state and federal exemptions, while others mandate adherence to the state laws. It is advisable to select the exemption rules that enable you to retain the maximum or most valuable assets when making such decisions.

Exclusions commonly cover your place of living (such as home equity), cars you own for use, life insurance policies, jewelry pieces, tools used for work, household items, and specific retirement and education savings.

Is it possible for me to eliminate all my debts?

One common worry expressed by Exelon clients when facing bankruptcy is the question of whether all debts can be wiped out in the process—a quick answer would be not necessarily straightforwardly possible in every case! In the context of bankruptcy proceedings, certain debts are ineligible for discharge; while a discharge absolves the debtor from obligations associated with debts—there's a catch—liens are upheld, meaning secured creditors retain the right to repossess property as appropriate. Debts that cannot be discharged under Chapter 7 mainly consist of tax debts and student loans, along with obligations for support and debts from activities or criminal behavior such as theft or driving under the influence of alcohol or drugs. Chapter 13 has a shorter list of exceptions.

Should I consider hiring representation?

Upon completing the article, read through numerous Exelon clients might question the need for representation. It is not mandatory to engage an attorney for this purpose. You have the option of self-filing. Seeking help from a petition preparer. Nevertheless, navigating the intricacies of bankruptcy procedures requires precision in filings. An experienced lawyer can assist you in understanding the process and informing you about the consequences of your decisions. A lawyer can assist you in saving time and reducing stress and expenses without considering the fees involved.

Will I need to appear in court?

Certainly! You need to make sure to show up for a court meeting within 20 to 40 days after submitting your paperwork. This meeting is referred to as a Section 341 creditors' meeting and sometimes known as the creditors' meeting; it usually wraps up in under half an hour. The purpose of this gathering is to allow your creditors and the trustee to ask about your status. Attendance by creditors is optional. They often choose not to show up. It's crucial for those employees from companies like Exelon to remember that they must truthfully answer all questions during the meeting while under oath.

Are they going to disconnect my utilities?

Public utilities are not allowed to cut off your service just because you've filed for bankruptcy. They can still disconnect it for nonpayment even after you've filed.

'Can I expect my creditors to stop bothering me?'

Sure thing! Once a petition is filed and processed by the court system in place for bankruptcy cases, all collection efforts from creditors need to halt until further notice is given by the court itself! This means no legal actions like lawsuits or foreclosures can take place, and creditors can't try to repossess anything or garnish wages without getting the light from the bankruptcy court first! Also, say goodbye to those letters and phone calls from debt collectors during this time too!

Will my credit score be impacted?

Certainly! Over a span of ten years, the bankruptcy record will be visible on your credit report. Nonetheless, there is a likelihood of receiving credit card offers even though you may still be eligible for credit at a higher interest rate or requiring a cosigner.

May I continue to hold onto my credit cards?

If the credit card companies agree with that notion and if these Exelon clients have faced bankruptcy due to credit card debt in the past, they should reconsider their reliance on credit cards as filing for bankruptcy times within a few years is not an option.

Will everybody be aware that I've declared bankruptcy?

Your bankruptcy filing is available to the public as a part of the records. Anyone can access it by visiting the clerk's office at the bankruptcy court where you submitted it.

New Information:

According to research from the Consumer Bankruptcy Project has shown a rise in Americans seeking bankruptcy relief in times. One study revealed that the proportion of individuals aged 65 and above filing for bankruptcy has almost tripled between 1991 to 2016 (referenced from the publication 'Graying of U.S.' authored by Deborah Thorne et al., 2018). This data emphasizes the significance of grasping the fundamentals of bankruptcy for our intended audience of Exelon employees planning their retirement and those who are already retired individuals. It reminds us that bankruptcy could be a choice for handling debt loads and that people should understand the support and safeguards accessible to them throughout this phase.

New Comparison:

When dealing with bankruptcy issues and financial troubles on a scale like Exelon companies and retirees face today, it is akin to sailing through waters with the help of navigation tools and maps for guidance and direction in the storm. Bankruptcy laws act as a guiding light showing the path and steps needed for individuals and enterprises to handle their debt problems effectively. Just like how different boats are designed for needs like cargo ships or fancy yachts, bankruptcy provides different solutions based on the situation at hand. Chapter 7 acts quickly like a speedboat to sell off assets and ease debts while Chapter 13 is like a sailboat that helps debtors navigate towards financial stability with structured payment plans. Seeking advice from navigators is akin to how proficient captains consult with an informed attorney for Exelon employees and retirees to navigate their way to a more prosperous financial future amidst challenges and achieving greater stability in the process.

Sources:

1. Sawin, Jonathan, and David Shea.  What You Need to Know if You Are Retired and Filing for Bankruptcy . Sawin & Shea, LLC,  www.sawinshea.com/retirement-bankruptcy .

2. United States Courts.  Bankruptcy Basics . U.S. Courts,  www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics .

3. Copeland, Lindsey.  As Health and Financial Challenges Grow, More Older Adults File for Bankruptcy . AARP, 5 Jan. 2023,  www.aarp.org/health/retirement-planning/bankruptcy-for-older-adults .

4. Upsolve.  Bankruptcy for Senior Citizens . Upsolve,  www.upsolve.org/learn/bankruptcy-for-senior-citizens .

5. 'Retirees and Bankruptcy.'  Debt.org , 12 Mar. 2021,  www.debt.org/retirement/retirees-and-bankruptcy .