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Depending on your circumstances, bankruptcy may or may not make sense for you. If after the bankruptcy you will be no better off than you were before, why do it? The decision as to whether and when to file a bankruptcy petition should be based upon the facts of your individual case.
A second recommendation is to turn to the Consumer Credit Counseling Service, a nationwide nonprofit organization that will work with you and your creditors to devise a more manageable repayment plan suited to your finances.
A third might be to sell any of your assets that have a resale value and apply the proceeds to your debt. Any balance due can be negotiated with the creditor. Finally, another solution is to consolidate all outstanding debts into a single loan (often through credit card balance transfers)—but read the caution about balance transfers elsewhere in these materials. This approach relieves you of being saddled with debt from multiple creditors, since you will be making payments only to one lender. It’s generally a bad idea to borrow against your home to pay off credit cards, however: you’ll be trading dischargeable credit card debt for a secured loan and could end up losing your home. Beware of counseling services that are actually fronts for profit-making companies. A common scam is to divert the consumer into a debt consolidation program and to charge excessive administrative fees. Sometimes, the initial fees go to the “counseling” company rather than to creditors, which obviously makes the debt situation worse instead of better. As a rule of thumb, a company that is advertising extensively on TV or radio is probably making a profit at the expense of hapless consumers.
What are the different chapters under which an individual can file? In Chapter 13, you file a plan that obligates you to pay some or all of your debts over a multiyear period. Under the new bankruptcy law, many consumer debtors will be required to file a Chapter 13 bankruptcy and commit to a 5-year repayment schedule. Chapter 11 is primarily used by businesses that need to reorganize in order to get out from under debt, but is also theoretically available to consumer debtors. (K-Mart and WorldCom are examples of two "big" names who have filed under Chapter 11.) In chapter 11, the debtor proposes a plan for paying some or all of his debts, and his creditors get a chance to vote on whether to accept or reject that plan. In some cases, it may be possible to “cram down” a plan against a dissenting class of creditors. Chapter 11 may be the only recourse for a consumer debtor with an extremely large mortgage that causes his secured debt to exceed the limit for Chapter 13. A special chapter—Chapter 12—is available to family farmers and under the new bankrutpcy law now covers family fishermen. It was very similar to chapter 13, but without limits on the amount of debts. The new bankruptcy law made significant changes in Chapter 12.
No matter where you are located, there is a bundle of paperwork requirements. A bankruptcy case begins with the filing of a petition and several forms with the bankruptcy court in your area. The forms contain lists of all your assets, debts, income, expenditures, as well as other personal background and financial information. In addition, you must file a certificate of credit counseling, tax returns (or transcripts) for the recent tax year; tax returns filed with the IRS while your bankruptcy case is open; copies of pay stubs or other proof of income received 60 days prior to filing; statement of currently monthly income and any reasonably anticipated changes in income or expenses after filing.
In a Chapter 7 (liquidation) case, the court will appoint a trustee to represent the interests of your creditors. A month or so after filing, you must attend a so-called “meeting of creditors” with the trustee to answer questions regarding your assets, debts, and so forth. Despite the name, creditors rarely attend these meetings. After the meeting, the trustee sells ("liquidates") the property that can be taken from you, takes the cash and splits it among your creditors. At the end of liquidating your property, the court schedules a final hearing and discharges your debts. The effect of this is that you no longer legally owe your creditors and they are forbidden from trying to collect any unpaid percentage.
A Chapter 13 (wage earner) case begins by filing the same papers as under a Chapter 7. In addition, you must file a workable plan for repaying your debts with the bankruptcy court, which will approve the plan. You start sending payments directly to the chapter 13 trustee shortly after filing. The trustee then pays your creditors according to the terms of the court-approved plan. When you have repaid your creditors according to the plan, a court hearing will be held and you will be discharged. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a "plan" to repay creditors over time – usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief under the means test.
Under the new bankruptcy law, how is it determined whether I can file a Chapter 7 or a Chapter 13 repayment plan? Performing the means test is straightforward, but very tedious, using new form B22A. The first step is to average the debtor’s income from every source during the preceding six calendar months. A married debtor must also average his or her spouse’s income during the same period, unless the spouses are separated for purposes other than avoiding the means test. Regular contributions toward household expenses by persons other than the debtor are counted in this total. The resulting average is called Current Monthly Income (CMI), even though it is neither current, monthly, nor limited to actual income. The second step in the means test is to compare CMI with the median income for households of the same size in the debtor’s state. Each state’s average is based on US census figures; click http://www.usdoj.gov/ust/bapcpa/bci_data/median_income_table.htm). If the debtor’s CMI (or the debtor’s plus the spouse’s CMI) is above the median income, creditors will later be permitted to file dismissal motions based on alleged abuse. If the total is less than the median income, only the United States Trustee (or the court acting on its own initiative) can file such a motion. The third step in the means test is the most counterintuitive. If a married debtor is filing individually, the non-filing spouse’s income has so far been part of the CMI calculation. The B22A form directs the debtor to subtract back out all of the non-filing spouse’s income that is not a contribution to household expenses. When this part of the calculation is complete, the resulting “adjusted CMI” will include all of the debtor’s income for the six preceding calendar months plus any regular contributions made by the spouse to the debtor’s household expenses. This new number is compared to the state median income for households of the same size. If it’s smaller, no presumption of abuse arises. If it’s bigger, there are more calculations to perform. The fourth step in the means test, which need only be done if the debtor’s adjusted CMI is above median, is to calculate deductions in many categories. It’s not possible in a short online discussion like this one to explain how to do this, and the B22A form is (unfortunately) not self-explanatory in every case. The result of subtracting deductions from adjusted CMI is the debtor’s Net Monthly Income (NMI). The fifth and final step in the means test is to decide how much unsecured debt could be repaid over 60 months using all of the debtor’s NMI. In summary, the decision tree goes like this: • If NMI is less than $100, there is no presumption of abuse. • If NMI is greater than $167.67, there is a presumption of abuse. • If NMI is between those two numbers, one multiplies it by 240 and compares the result with the total of unsecured debt. If the result is greater, there is a presumption of abuse; otherwise, there is no such presumption. (This calculation determines whether the debtor could repay at least 25% of unsecured debt over the course of a 60-month Chapter 13 plan, which is what the statute actually directs the debtor to figure out. The statutory test is harder to describe.) A presumption of abuse just means that a Chapter 7 filing is presumed to be abusive in the absence of evidence proving otherwise. A debtor for whom the presumption arises may still rebut the presumption by offering evidence of special circumstances. For example, victims of natural disasters like Hurricane Katrina may show income loss, expense increase, and other adverse effects of the disaster in order to demonstrate special circumstances.
Consumers whose debts are too large for Chapter 13 might file under Chapter 11. In general, a Chapter 11 case involves the formulation of a plan and a disclosure statement that the debtor submits to a vote by creditors. The complexities of Chapter 11 are beyond the scope of a simple online explanation like this one. Someone who is not an experienced bankruptcy lawyer can probably not successfully handle a Chapter 11 case. Family farmers can file under Chapter 12. Chapter 12 is much like Chapter 13, but is available without regard to the size of the debts.
A Chapter 13 petition includes a form (B22C) that’s very much like the means-test form used in a Chapter 7 case. The form first directs the debtor to calculate Current Monthly Income (CMI) in exactly the same way. The CMI of the debtor(s) and the non-filing spouse are then compared to the state median income for same-sized households to determine the so-called “commitment period.” The commitment period is either 3 years (below median) and 5 years (above median). Some consumer bankruptcy lawyers believe that the commitment period is just a number that doesn’t necessarily govern how long the plan will actually last, but there is no case law deciding this point one way or the other.
The B22C form then directs a married debtor filing individually to subtract out the non-filing spouse’s income to leave an adjusted CMI that includes (a) the debtor’s income, and (b) the non-filing spouse’s contributions to the debtor’s household expenses. If the result is above median, the debtor must go on to calculate disposable income according to a statutory formula. Otherwise, the debtor will stop filling out the form and calculate disposable income as under prior law (that is, by subtracting actual expenses from Schedule J from actual net income from Schedule I, subject to the scrutiny of the United States Trustee).
The statutory formula for disposable income for above-median filers applies the same complicated set of deductions as does the Chapter 7 means test, plus two more. In addition to the expenses that are deducted on the B22A form, the B22C form allows a further reduction in income for (a) income received for child support, and (b) voluntary contributions to retirement plans. As a result, it is entirely possible for a debtor to have negative disposable income (meaning that no Chapter 13 plan is feasible) and yet have the presumption of abuse arise in a Chapter 7 filing. In the absence of case law under BAPCPA, it is not entirely clear what chapter such a debtor should file under.
What law and rules apply to a bankruptcy?
Under the new bankruptcy law, what are the new documentation requirements?
BAPCPA also requires debtors to deliver to the case trustee, not later than 7 days prior to the first meeting of creditors, a copy of the debtor’s most recent federal income tax return or a tax transcript. The debtor must also furnish a copy to any creditor who makes a request at least 15 days prior to the first meeting. Many consumer bankruptcy attorneys obtain a MFTRA-X transcript from the IRS and redact at least the first 5 digits of the debtor’s social security number. This kind of transcript contains substantially less personal information than a full return. The Judicial Conference has designed new forms to permit individuals who have primarily consumer debts to meet the new requirement that they disclose their monthly net income—a defined term under BAPCPA with a complicated definition. The forms are labeled B22A for Chapter 7 cases, B22B for Chapter 11 cases, and B22C for Chapter 13 cases. The most frequent cause for dismissing pro-se cases in the early days after October 17, 2005, has been failure to file this form.
A Chapter 13 debtor must file with the IRS all tax returns due within the 4 years preceding filing. These returns must be turned over to the case trustee and any interested creditor, but only upon request. Some consumer bankruptcy attorneys plan to resist creditor requests for copies of these tax returns except upon a showing of need and an order from the court. The United States Trustee’s office has announced that it will not file enforcement motions against debtors who cannot produce the new documents due to natural disasters. In practice, this means that victims of the 2005 hurricanes who can’t locate their pay stubs will still be able to file.
The pre-filing briefing outlines opportunities for available credit counseling and assists the individual in performing a related budget analysis. The briefing is expected to last about 90 minutes and to cost about $50, but agencies may not charge individuals who cannot afford to pay. The agency will provide a certificate evidencing completion of the briefing, and the debtor should file that certificate along with the bankruptcy petition. The pre-discharge course is expected to last longer, perhaps as long as 4 hours, and to cost more. Agencies may not charge a fee to debtors who can’t afford to pay. Upon completion of the course, the debtor will obtain a certificate and file it with the court as an exhibit to the new Form B23.
When a married couple files a joint petition, both must obtain the pre-filing briefing and pre-discharge instruction. According to the new bankruptcy law, an individual should be able to satisfy the pre-filing and pre-discharge education requirements in person, over the telephone, or over the Internet. Very few agencies who offer just Internet counseling and training have been approved, however.
Debt management plan. Some budget and credit counseling agencies will prepare a debt management plan as part of the pre-filing briefing. The plan, if one is created, must also be filed along with the petition.
A debt management plan may not be the best choice for a personal bankruptcy debtor because, generally speaking, it will provide only for reduced interest on credit card payments without reducing the amount of principal that the debtor must repay. Neither can a debt management plan eliminate debts without the creditor’s agreement. There is also a fear amongst consumer bankruptcy attorneys that some credit counseling agencies may receive kickbacks from credit card lenders that will affect the objectivity of any plan proposed by the agency.
Waiver of requirement: There are a few situations under the new bankruptcy law where it is possible to obtain a temporary or permanent waiver of the education requirements. The requirement can be waived altogether if the Bankruptcy Judge determines, after a hearing, that the debtor is unable to complete the requirement because of incapacity, disability or active military duty in a combat zone. Incapacity refers to severe mental illness that prevents the debtor from making rational decisions about financial matters. The disability would have to preclude the debtor from participating, after reasonable effort, in person, over the telephone, or over the Internet. Accordingly, very few debtors will qualify for a waiver by reason of incapacity or disability. The law does not provide any exception for individuals having limited proficiency in English, and the United States Trustee has (so far, anyway) taken the position that the debtor must furnish any required translator at the debtor’s own expense. A temporary waiver of the pre-filing briefing can be obtained if exigent circumstances prevent the debtor from obtaining the briefing within 5 days after asking any one agency. The debtor must obtain the briefing within 30 days after filing, but the court can allow an additional 15 days for cause. Because of Hurricane Katrina, the United States Trustee’s office has waived the pre-filing counseling requirement in the Southern District of Mississippi and in all the districts of Louisiana. This waiver would not apply to Katrina victims filing in other judicial districts. The requirement for pre-filing credit counseling may affect a debtor’s ability to file a skeleton petition on short notice in order, for example, to halt a threatened foreclosure. There is no case law as yet concerning whether a debtor can, for example, file before 5 days have elapsed after the debtor attempted to obtain the required briefing.
Failure to either obtain the required pre-filing briefing or to request a waiver for a documented and acceptable reason will result in the Bankruptcy Judge dismissing the case. There is no case law yet concerning whether such a dismissal might affect a debtor’s right to obtain a discharge in a subsequent case.
List of approved agencies: In most judicial districts, the United States Trustee program within the Department of Justice must approve nonprofit budget and credit counseling agencies. In the few districts that are not part of the United States Trustee program, the Bankruptcy Administrator handles approvals.
http://www.bankruptcyinstruction.com/
In a “no asset” Chapter 7 bankruptcy case, there is no deadline because the court will instruct creditors not to file proofs of claim. In other cases, the deadline is generally 90 days after the 341 meeting. Governmental units (e.g., the IRS) have 180 days measured from the commencement of the case. Since the 341 meeting is generally 30 days after commencement, the government basically gets an extra two months.
Can my bankruptcy case ever be reopened?
Can I switch to a chapter 7 bankruptcy after filing a chapter 13?
Is there any relief for victims of disaster (i.e., Katrina) under the new bankruptcy provisions? Under the new law, those with income at or above their state’s average income are channeled into a Ch. 13 repayment plan unless they can show special circumstances that even partial repayment is not possible. Their income loss, expense increase and other adverse effects of the hurricanes are special circumstances and taken into account for purposes of the means test.
Suppose I leave out a debt on my petition? If you inadvertently omit a creditor, the consequences are not so dire. Except in a no-asset Chapter 7 case, any debt to a creditor who didn’t get notice of your case will not be discharged—you will still owe it when your case is finished. There are some kinds of debts (debts incurred by fraud, for willful and malicious injuries, and for divorce settlements) that will be discharged unless the creditor files an adversary proceeding while your case is going on and convinces the court not to discharge the debt. But, if the creditor never gets notice of the case, it can’t file the adversary proceeding in time. Therefore, the law automatically keeps those debts alive at the end of your case. Tactically, it’s better for you not to lose the benefit of the time limit, so it’s better to list all your creditors. Criminal actions, lawsuits to establish paternity or other domestic relations actions (custody, visitation, domestic violence), litigation to collect child support or alimony, repaying a loan from certain types of pensions, and IRS audits are not stopped. Regarding evictions, landlords are free to complete evictions if the landlord already has a judgment of possession or where the eviction is based on endangerment or use of illegal substances on the leased premises. Moreover, the automatic stay doesn't stop or postpone actions to restrict driver's licenses and revoke professional licenses.
Some consumer bankruptcy lawyers believe that unemployment compensation derives from the Social Security Act and should also be excluded from Current Monthly Income. What happens to my civil lawsuit when the defendant files for bankruptcy? As a plaintiff, your options are to (a) file a motion in the bankruptcy court requesting relief from the automatic stay in order to continue prosecuting your lawsuit, (b) file a notice of removal in the bankruptcy court to transfer the case there, or (c) wait for the bankruptcy case to terminate and, if your claim hasn’t been discharged, continue the case in the original court. Item (c) is rarely the right course of action. Only an experienced bankruptcy attorney can advise you which would be the better course. Any claims or counterclaims that the defendant may have against you are not subject to the automatic stay. Therefore, you could end up having to pay a judgment on a counterclaim and not being able to recover at all on your original claim. Does a bankruptcy filing stop a wage attachment?
http://www.bankruptcyinstruction.com/
I moved recently. How might that affect a bankruptcy case? Unlike prior law, BAPCPA allows a debtor to use the bankruptcy exemption scheme of the state where the debtor has been domiciled for the 730 days (roughly 2 years) immediately preceding the petition date. Someone who moved from another state within the preceding 730 days must use the exemptions provided by the state in which the debtor was domiciled for a greater part of the 180 days preceding the 730 days than in any other state. Some states allow a bankruptcy debtor to elect the state’s own exemption scheme or a uniform scheme provided in the Bankruptcy Code itself, but many states do not. To further complicate matters, some state exemption schemes do not apply to non-residents. If the result of looking back 730 days and the greater part of the 180 days preceding the 730 days is that a debtor would be entitled to no exemptions, BAPCPA allows the debtor to use the Bankruptcy Code exemptions. BAPCPA does not spell out what happens when some of the relevant state’s exemptions (such as those for personal property) apply but others (such as a homestead exemption) do not. Only judicial decisions or legislative amendments can clarify this matter.
The second way in which moving affects a bankruptcy case relates to homestead exemptions. Some states have homestead exemptions that exceed $125,000. BAPCPA eliminates the excess over $125,000 for any interest acquired within the 1215 days (roughly 40 months) preceding the petition date. There is an exception when the debtor owned a home in the same state longer ago than 1215 days and rolled the proceeds of selling that home over into a new home within the 1215 days. According to the plain meaning of BAPCPA, someone who moves more than once within the same state would have their homestead limited to $125,000. At least one bankruptcy judge has rejected this argument; in that judge’s view, a debtor is allowed to rollover the proceeds of more than one sale without losing the benefit of the state’s homestead exemption.
How much of my home equity is off-limits to creditors under the new bankruptcy law?
The value of a home is reduced to the extent it is attributable to a transfer made within 10 years preceding the bankruptcy filing if (a) the assets transferred would not be exempt if they had been held on the petition date, and (b) the transfer was made with the intent to hinder, delay or defraud any creditor. Since an exemption may be claimed only to the extent of an asset’s value, this provision effectively reduces the available homestead exemption when it applies. A homestead exemption is limited to $125,000 if, within the past 5 years, the debtor committed certain kinds of securities-law violations, federal felonies, or civil RICO violations. The homestead is likewise limited to $125,000 if the debtor owes a debt arising from any criminal act, intentional tort, or willful or reckless misconduct that caused serious physical injury or death to another individual in the preceding 5 years.
http://www.bankruptcyinstruction.com/
Consult with an attorney in order to determine if a hardship discharge makes sense in your individual situation different bankruptcy judges across the country apply different standards as to what "hardship" means. Your attorney will know how the bankruptcy court in your area views "hardship". 529 college funds: Contributions placed in a section 529 college education savings plan or in a section 530 education IRA at least 2 years prior filing for bankruptcy are off limits to creditors. Contributions made between one and two years before filing are protected up to $5000. Contributions made within a year of filing are not protected. The exemptions apply only when the beneficiary of the plan is a child, stepchild, grandchild, or stepgrandchild (including an adopted or foster child).
Asset protection trusts: An asset protection trust can be established under the laws of Alaska, Delaware, Nevada, Rhode Island and Utah. Under prior law, money stashed away in those state sponsored trusts was beyond the reach of creditors. Under BAPCPA, the case trustee may avoid transfers made to an asset protection trust within the past ten years with the actual intent to hinder, delay or defraud a creditor. Cars are also harder to redeem in Chapter 7 cases, since the law now requires paying the lender the retail replacement value of the car. That value is generally higher than the private sale value that was commonly used under prior law. It remains possible for a debtor to surrender a car when keeping up the payments will be impossible. BAPCPA creates a formal way to assume a personal property lease, such as a car lease, in a Chapter 7 case. The lease will be deemed rejected if the case trustee fails to assume it within 60 days after filing. At that point, the debtor may notify the creditor that the debtor wishes to assume the lease. The creditor may, at its option, notify the debtor that it is willing to have the lease assumed and may condition the assumption on cure of any outstanding default. The debtor then has 30 days after the creditor’s notice to send a further notice that the lease is assumed. In some districts, an informal “fourth” option (besides redemption, reaffirmation or surrender) has been in use, whereby the debtor simply continued to make loan or lease payments on the original contract terms. BAPCPA purports to abolish this option, and some car lenders have communicated their intention to require debtors to make an election between the three statutory options. Some other car lenders are willing to go along with the fourth option anyway. The means test for Chapter 7 debtors and the disposable income calculation for above-median Chapter 13 debtors take account of car loans in a peculiar way. In calculating the expense deduction for secured debts, you must add up the payments for the next 60 months and divide by 60 to calculate the deduction. To see how unfair this is, imagine that you have just 6 more payments to go on a car that’s almost 5 years old. You will be allowed to deduct just one-tenth of your actual monthly payment in figuring out the means test, even though you will probably have to buy a new car within the next few years. A bankruptcy lawyer is not, however, allowed to advise you to buy a new car before filing, because Congress has seen fit to forbid “debt relief agencies” from advising someone to incur new debt. You might never understand this problem if you hadn’t read about it here. Can I keep some of my credit cards?
What happens to unpaid child support and alimony in the new bankruptcy law? It remains true that a Chapter 13 plan must provide for full payment of priority debts, including arrearages in domestic support obligations. Furthermore, to obtain a discharge in a Chapter 13 case, the debtor will have to certify that all post-petition domestic support obligations have been met. Finally, case trustees in both Chapter 7 and Chapter 13 cases are now obligated to make certain disclosures to a domestic support creditor, such as an ex- or separated spouse, including the debtor’s most recent known address at the time of discharge.
http://www.bankruptcyinstruction.com/
Under the new bankruptcy law the list of debts that cannot be discharged is expanded. What are the new debts that can’t be wiped out? Privately funded student loans are now treated the same way as loans guaranteed by a governmental agency and loans made or funded by a governmental agency or nonprofit institution. These loans are not dischargeable except upon a showing of undue hardship. Just as was true under prior law, certain credit-card transactions on the eve of bankruptcy are presumed fraudulent and therefore nondischargeable, but the debtor can continue to rebut the presumption. The transactions affected are luxury goods and services totaling more than $500 within the past 90 days and cash advances of $750 or more received within the past 70 days. A debt incurred to pay a nondischargeable tax to any governmental unit, and not just the U.S. government as under prior law, is no longer dischargeable. This change will primarily affect debtors who have paid taxes with a credit card.
Debts to pay fines or penalties imposed under federal election laws are now not dischargeable. Debts to qualified retirement plans are now not dischargeable.
The so-called “super discharge” in Chapter 13 is not nearly so broad as it was under prior law. It is no longer possible to discharge taxes for which required returns were not filed or for which fraudulent returns were filed, or debts incurred by fraud or defalcation. While it is still theoretically possible in Chapter 13 to discharge debts for willful and malicious injury to person or property, a debt involving willful or malicious injury causing personal injury or death to an individual cannot be discharged.
How can I escape from my student loan debt? Unlike practically every other legal liability, student loans never go away—there is currently no statute of limitations for student loan debt. If you think there’s even a remote possibility that you might ever be able to get a better job, you should investigate deferrals and forgiveness options with the lender or guarantor of your loans.
How often can I file successive bankruptcies under the new bankruptcy law?
A debtor cannot obtain a discharge in a Chapter 7 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past 8 years, or (b) a Chapter 13 case filed within the past 6 years. The time periods in either case are measured from the commencement dates of the respective cases. The dates of discharge have no bearing on the disqualification. A debtor cannot obtain a discharge in a Chapter 13 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past 4 years, or (b) a Chapter 13 case filed within the past 2 years. The time periods in either case are measured from the commencement dates of the respective cases. The dates of discharge have no bearing on the disqualification.
In addition to these changes in how often a debtor can obtain a discharge in bankruptcy, Congress also enacted changes intended to reduce or eliminate the effect of the bankruptcy stay for serial filers. To oversimplify the changes, the stay will last for just 30 days if a bankruptcy case of the debtor was pending within the preceding year but was dismissed. The stay will simply not come into existence at all if two or more cases were pending within the preceding year but were dismissed. If a Chapter 7 case is dismissed for abuse and the debtor files under a new chapter (such as Chapter 13), however, the stay has its normal duration.
The stay no longer prevents a landlord from evicting a tenant based on endangerment of the property or illegal use of controlled substances, but the landlord must file a certification with the court, and the debtor has 15 days in which to rebut the allegations or to remedy the situation. Freeing me from my debts in bankruptcy is in exchange for losing some of my possessions. How does that work? The federal Bankruptcy Code provides that you can protect some property from the claims of creditors either because it is exempt under federal bankruptcy law or because it is exempt under the laws of your home state. You get to keep the exempt property. In a Chapter 7 case, the trustee will take any property that is not exempt and sell it to pay off creditors. (The "exempt" and "nonexempt" classification has no effect under a Chapter 13 bankruptcy, since a repayment plan is used to pay your debt obligations.) Many states have taken advantage of a provision in the bankruptcy law that permits each state to adopt its own exemption law in place of the federal exemptions. In other jurisdictions, you have the option of choosing between federal exemptions or exemptions available under state law. Though the types of property that are exempt may be similar under both federal and state law, the value of the asset that can be excluded differs widely. If you are married filing jointly both spouses must make the same exemption election.
Are there new requirements concerning the addresses for creditors?
Debtors are not required to give notices to creditors in most cases. The court clerk gives notice of case filing (including announcement of the dates for the first meeting of creditors and of other deadlines in the case) and of any discharge that eventually enters. It remains important to provide correct addresses on the schedules and matrix, however, because the Bankruptcy Noticing Center used by the clerk’s office will not have a registered address for every possible creditor and cannot correct every misspelling in a creditor’s name. What property can I keep in a Chapter 7 bankruptcy filing? Typical examples of property that you can keep are: (1) Your residence, up to $18,450. (2) A car, up to $2,950. (3) Household goods and furnishings, clothing, appliances, books, pets or musical instruments up to $9,850, but no more than $475 per item. (4) Tools of your trade, up to $1,850. (5) The cash value of a life insurance policy, up to $9,850. (6) Health aids. (7) Your right to receive social security, unemployment, welfare, veteran’s benefits, disability, illness, alimony, support, crime victim’s reparations. (8) To the extent necessary for your support, your right to receive life insurance for someone who was supporting you or to recover damages for such a person’s wrongful death. (9) Your right to recover damages, other than for pain and suffering, for personal injury, up to $18,450. Exemptions vary widely from one state to another, so you must check with an attorney who specializes in bankruptcy in your area. Web sites that attempt to list exemptions for every state can give you an approximate idea of the exemption picture, but they’re bound to be incomplete and out of date in many respects. The above categories and dollar limits are the ones provided by federal law in states that allow you to choose between the federal exemptions and exemptions available under state law. About 34 states don’t let you choose. The dollar amounts of the federal exemptions are automatically adjusted upwards every three years; these are the figures effective through March 2006. If a married couple files a joint petition (the filing of a single petition by an individual and the individual's spouse), each spouse is entitled to his or her own exemptions. In most cases, that fact means that the amounts are doubled. Can I use bankruptcy to protect my assets? Finally, in a Chapter 13 case, your plan may allow you to pay off the arrears on your mortgage or car loan, thereby avoiding foreclosure or repossession. http://www.bankruptcyinstruction.com/
What property will I lose in a chapter 7 case? Generally, you might lose the following items of property: (1) your second residence (2) recreational vehicles (3) your second car (4) stamp, coin and other collections and heirlooms (5) stocks and bond certificates (6) cash on hand (unless it comes from unemployment insurance) (7) deposits of money (e.g., bank accounts, CDs, escrow accounts, money market accounts) (8) property that you own but don’t have in your physical possession (e.g., security deposits) (9) money you have a present right to receive at some future date (e.g., tax refunds, vacation pay, wages) (10) your part of a marital estate. (11) any inheritance, marital property settlement, or life insurance payment (to the extent not exempt) that you receive within 180 days after filing What is a discharge in bankruptcy? The timing of the discharge varies, depending on the chapter under which you file. In a Chapter 7 bankruptcy, for example, you normally receive a discharge just a few months after the petition is filed. In a Chapter 13 bankruptcy, the discharge typically occurs when you have successfully finished the payments you agree to make under your plan. I have no property or assets to turn over to the trustee. Can I still file? To qualify for a Chapter 7 bankruptcy and dismissal of your debts, your income must be below your state's median level; if higher, your option is to repay a portion of your debts under a Chapter 13 plan.
What is a chapter 13 bankruptcy? The bankruptcy law regarding the scope of the chapter 13 discharge is complex and has recently undergone major changes. Therefore, debtors should consult competent legal counsel prior to filing regarding the scope of the chapter 13 discharge. Who is eligible for a Chapter 13 bankruptcy?
http://www.bankruptcyinstruction.com/ What is disposable income for purposes of Chapter 13? Social security benefits, payments to victims of war crimes or crimes against against humanity, and payments to victims of terrorism (i.e., World Trade Center victims) are not counted. An issue sometimes arises about whether income from non-employment sources, such as family and friends, or income from seasonal work, should be counted. Issues frequently arise about whether certain expenses should be counted in determining disposable income. Resolving these issues generally requires the advice of an experienced bankruptcy attorney.
Can I keep my house if I file bankruptcy?
Can I pay off my bankruptcy plan early? Generally, if your plan would have paid off 100% of your debts, you can complete the plan early. If you didn’t file a 100% plan, whatever increase in wealth is allowing you pay early has to be included in your bankruptcy estate and will lead the Trustee to require you to amend the plan. Before paying off a plan early, consult with a local bankruptcy attorney whether this option makes sense in your circumstances. Can I keep my car if I file bankruptcy? Cars are also harder to redeem in Chapter 7 cases, since the law now requires paying the lender the retail replacement value of the car. That value is generally higher than the private sale value that was commonly used under prior law. It remains possible for a debtor to surrender a car when keeping up the payments will be impossible. I can’t make the payments due under my Chapter 13 bankruptcy plan. What can I do? (1) modify the plan to deal with your changed circumstances; or (2) discharge the rest of your debts on the basis of hardship; or (3) convert to a Chapter 7 liquidation case; or (4) dismiss your Chapter 13 case, which means you'll owe what you owed before filing for Chapter 13, less any payments; or (5) suspend payments. Which debts are discharged in bankruptcy? (1) utility bills (2) some court judgments (3) credit and charge card bills (4) department store and gasoline company bills (5) loans from family and friends (6) newspaper and magazine subscriptions (7) legal, medical and accounting bills, (8) most unsecured loans (e.g., debts for which there is no collateral)
Can I repay a creditor if I want to - even after bankruptcy? My creditor is attempting to collect on a discharged debt. What can I do? Can a creditor ask a debtor to reaffirm the debt? It is important to remember that a reaffirmed debt is not wiped out (discharged) in bankruptcy. Once you reaffirmed a debt, you cannot stop. If you do, the creditor can sue you (or repossess the property) for the balance owed. What is a reaffirmation agreement?
Before entering into such an agreement, ask an attorney to ensure that your rights are protected and that any reaffirmation is in your best interest. If you are not represented by an attorney in your bankruptcy case, the reaffirmation agreement will have to be approved by the bankruptcy judge. The judge will ask questions to determine whether the reaffirmation agreement imposes an undue burden on you or your dependants and whether it is in your best interests. Since reaffirmed debts are not discharged, the bankruptcy court will normally only reaffirm secured debts where the collateral is important to your daily activities (i.e., a car). In any case, you’ll have a cooling-off period in which to cancel the reaffirmation agreement if you change your mind.
Reaffirmation agreements are strictly voluntary. They are not required by the Bankruptcy Code or other state or federal law. What prevents my creditors from coming after me when I file for bankruptcy?
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What is the automatic stay? Some examples of actions by a creditor that would violate the stay are these: (1) Filing a new lawsuit, or continuing to press a lawsuit that had already been filed. (2) Sending dunning letters or making phone calls in an attempt to collect a debt. (3) Filing a “financing statement” to perfect a security interest. (4) Refusing to issue a transcript of your schooling. (5) Canceling your driver’s license. Exceptions: Criminal prosecution, paternity proceedings, litigation to collect child support or alimony, repaying a loan from certain types of pensions, and IRS audits are not stopped. With residential real estate leases, landlords seeking to evict tenants are free to complete evictions if the landlord already has a judgment of possession or where the eviction is based on endangerment or use of illegal substances on the leased premises. Moreover, the automatic stay doesn't stop or postpone actions to suspend driver's licenses and revoke professional licenses.
Can a creditor obtain relief from the automatic stay? In a Chapter 13 case there must be cause for the creditor to take action. Suppose a creditor forgets to file a proof of claim? There are some cases where you want a creditor to file a claim. For example, if a creditor has security that’s worth less than its claim, you will want to “strip down” the claim to the value of the security. Therefore, the Bankruptcy Code allows the debtor or trustee to file a proof of claim on behalf of a creditor who fails to file its own within the time limit. Unless the creditor objects, that substitute proof of claim binds the creditor. Filing together eliminates the separate debts of you and your spouse and all the jointly-held marital debts. Filing alone leaves the non-bankrupt spouse still liable for his or her share of joint debts, but wipes out the spouse's separate debts and his/her share of the joint debts. If you are legally separated, have divided your property, and taken care of all the financial considerations, your best option may be to have your spouse go it alone. If all the debts were incurred before you were married, there is no point in having you both file. Community property and common law (also called "equitable distribution") are the two types of martial property ownership. The vast majority of states apply the equitable distribution rules; nine states apply the community property rules. If you live in a common law property state, your spouse's bankrupt estate will include his/her separate property and half of the jointly-held marital property. The non-bankrupt spouse will not have to worry about the effects of the bankruptcy on his or her separate property.
However, the bankruptcy court takes a dim view if the non-bankrupt spouse is merely holding the property or has received the property from the bankrupt spouse within one year of filing bankruptcy. In this case, this transaction is considered fraudulent, and the property will be turned over to the bankruptcy trustee.
In community property states, spouses equally own all property earned or received during the marriage, splitting 50-50. In bankruptcy, then, all the community property you and your spouse own jointly is part of the bankruptcy estate, regardless whether you join in the filing. Your separate property -- property you owned before the marriage -- is not effected by your spouse's bankruptcy. Property held by your spouse will be used to settle debt first, and then non-exempt community property will be used.
Do no rely solely on general explanations of the rights and liabilities of married persons in your bankruptcy planning. The normal rules may not apply, or they may apply in modified form, in a bankruptcy case. To give one example out of many, creditors of one spouse cannot ordinarily dispossess the other spouse from property they hold as tenants by the entirety. But a bankruptcy trustee may be able to.
A lender has a mortgage lien. What is a lien and does it affect my bankruptcy case? Your home may be subject to more than one lien (e.g., tax liens, judgment liens, "second" and “third” [or even higher numbered] mortgages). If you fail to make payments, the creditor may enforce its rights by taking the collateral (this is called “foreclosing”), in order to get paid off. Filing Chapter 7 bankruptcy blocks a foreclosure sale temporarily, while filing under Chapter 13 blocks it if your plan provides for paying off the arrearages and keeping payments current during the life of your case (see our discussion on the effect of bankruptcy on foreclosures). Even though your personal liability to repay a judgment or other debt will probably be wiped out (“discharged”) at the end of your bankruptcy case, liens do not automatically go away. If you do nothing about a lien, the creditor will eventually be able to foreclose and sell the collateral. You have several options to avoid losing your property: (1) You can “avoid” judicial liens against exempt property. See the discussion of “WHAT DOES IT MEAN TO AVOID A LIEN”. (2) You can “redeem” the collateral by paying the lender its current market value. See the topic “WHAT IS REDEMPTION”. (3) You can “reaffirm” the debt on terms that you and the lender mutually agree upon and that are fair to you in the judgment of your attorney or the court. See the topic “WHAT IS REAFFIRMATION”. (4) You can also avoid the hassle of a foreclosure sale by “surrendering” the collateral to the lender. See the topic “WHAT IS SURRENDER”.
http://www.bankruptcyinstruction.com/ What does it mean to avoid a lien? For example, suppose that you own Blackacre, your ancestral estate. It is presently worth $300,000, subject to a first mortgage of $180,000. Suppose that someone obtains a judgment against you for $30,000 and then obtains a lien against Blackacre. They are planning to force a sale of Blackacre in order to recover their $30,000, or else they’re planning on camping out at your next refinancing or sale in order to skim $30,000 off the top of whatever money you receive after the mortgage is discharged. Now you file bankruptcy, and let’s suppose that your state law provides a $200,000 homestead exemption. The judgment lien impairs that exemption (makes it less worthwhile). Therefore, the Bankruptcy code allows you to avoid the lien, which means you will emerge from bankruptcy with Blackacre free and clear of that lien. The mortgage lien still exists, however because the Bankruptcy Code does not let you avoid voluntary or nonjudicial liens. My lender is foreclosing on my home. Will filing bankruptcy stop this action? A Chapter 7 never permanently stops a foreclosure, unless the creditor agrees and homestead (exemption) laws stop the trustee from selling the property. Most people who file for bankruptcy have big arrearages on their mortgage that they can’t pay off right away. The solution to that problem that allows them to keep their home is to file under Chapter 13 bankruptcy. The Chapter 13 plan provides for continuing monthly payments on the mortgage and paying off the arrearages over the life of the plan (three to five years).
How often can I file for bankruptcy? A debtor cannot obtain a discharge in a Chapter 7 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past 8 years, or (b) a Chapter 13 case filed within the past 6 years. The time periods in either case are measured from the commencement dates of the respective cases. The dates of discharge have no bearing on the disqualification. A debtor cannot obtain a discharge in a Chapter 13 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past 4 years, or (b) a Chapter 13 case filed within the past 2 years. The time periods in either case are measured from the commencement dates of the respective cases. The dates of discharge have no bearing on the disqualification. In addition to these changes in how often a debtor can obtain a discharge in bankruptcy, Congress also enacted changes intended to reduce or eliminate the effect of the bankruptcy stay for serial filers. To oversimplify the changes, the stay will last for just 30 days if a bankruptcy case of the debtor was pending within the preceding year but was dismissed. The stay will simply not come into existence at all if two or more cases were pending within the preceding year but were dismissed. If a Chapter 7 case is dismissed for abuse and the debtor files under a new chapter (such as Chapter 13), however, the stay has its normal duration. Notwithstanding the above, you can be barred from filing a new case for 180 days after a case is dismissed, if the dismissal (a) is because you willfully failed to abide by an order of the court or to properly prosecute the case, or (b) was at your request after a creditor requested relief from the automatic stay. Will bankruptcy discharge my past-due income taxes? A Chapter 7 debtor can wipe out federal income taxes if all the following are met: (1) the IRS had not filed a prior tax lien on the assets you own (if they have, the lien survives bankruptcy, which means that the government may still seize property to collect the discharged tax debts); (2) you didn’t file fraudulently or try to evade paying your taxes; (3) the taxes are more than three years old; and (4) tax deficiencies that were assessed on prior returns were assessed at least 240 days prior to the filing of the bankruptcy. In a Chapter 13 case, you’ll pay the IRS as part of your repayment plan. Not staying current on postpetition taxes, however, will put your plan at risk. Prior to the Sec. 341 meeting of the creditors, you must file copies of your tax returns or transcript (including unfiled tax returns and any amendments while your case is open) with your case trustee, or any creditor who asks for it. If you do not, you risk an automatic dismissal of your case. If a federal Notice of Tax Lien has been recorded before filing bankruptcy, it is highly recommended that you seek the advice of an experienced bankruptcy attorney as discharging taxes is far more complicated.
Do I have to pay taxes during my bankruptcy case? The filing of a Chapter 7 bankruptcy petition creates a separate taxable bankruptcy estate, consisting of property that belongs to you before the filing date, and is completely separate from you as an individual taxpayer. The trustee is responsible for preparing and filing the estate’s tax returns (Form 1041) and paying its taxes. The individual debtor remains responsible for filing returns (Form 1040) and paying taxes on any income that does not belong to the estate. The filing of a Chapter 13 bankruptcy petition does not create a separate taxable estate for federal tax purposes. You file the same federal income tax return (Form 1040) that was filed prior to the bankruptcy petition. If you run into trouble paying your postpetition taxes, look into negotiating an agreement with the tax man. You must pay local property taxes otherwise it will probably constitute a default on your home mortgage. How long does my bankruptcy remain on my credit report? "Wiping the slate clean" through bankruptcy also puts all future lenders on notice that you have had difficulty repaying your debts; creditors are more likely to either refuse to extend credit, or to make you pay (through higher interest rates, for example) for the additional risk they are taking in extending you credit. However, even with a bankruptcy on your credit report, many lenders will do business with you and extend you new credit. This is because the discharge obtained in bankruptcy leaves all future earnings free from the claims of past creditors. Copies of a credit report can be obtained from one of the following sources: (1) Experian (formerly TRW), http://experian.com; (2) Equifax, http://equifax.com; (3) Trans Union, http://tuc.com. The reports contain loans and credit card accounts, balances and payment history, bankruptcies and liens. In many cases, you’ll be entitled to a free copy of your report so long as you don’t ask for extra-cost “products” like a credit score or automatic update reports.
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Can I stay in my apartment? Strictly speaking, an unexpired lease is an asset of your bankruptcy estate that usually has no value and that a Chapter 7 trustee would normally “reject”. Rejection is a technical breach of the lease that would allow the landlord to evict you. If you are worried about this happening, ask the trustee to formally “abandon” the lease so that you can formally affirm it. Strictly speaking, an unexpired lease is an asset of your bankruptcy estate that usually has no value and that a Chapter 7 trustee would normally “reject”. Rejection is a technical breach of the lease that would allow the landlord to evict you. If you are worried about this happening, ask the trustee to formally “abandon” the lease so that you can formally affirm it.
Can the state deny me a license or permit because of my bankruptcy?
A relative died after my case was filed. What happens to the life insurance proceeds? Can utility companies shut off service during bankruptcy?
What is redemption? This option makes good sense provided the value of your property is less than the balance due on your loan. If your property has not depreciated, and the loan is lower than the property's value, consider other options for keeping the property, such as paying off the debt or entering into a reaffirmation agreement. I am in a same-sex relationship. How does that affect bankruptcy? In a state that recognizes same-sex marriages, a same-sex couple might seek to file a joint petition in order to pay just one filing fee. (There is no other difference between a joint petition and two petitions that are administratively consolidated.) The federal Defense of Marriage Act would require the court to reject the joint petition because the word “spouse” appearing in the Bankruptcy Code must be construed as meaning two spouses of opposite gender. There will undoubtedly be a constitutional challenge to the Defense of Marriage Act, but it’s not possible to predict the outcome here. A bankruptcy case, where the fight would be over a mere $299 filing fee for a Chapter 7 filing (or $274 for a Chapter 13 case), may not be the best vehicle for such a challenge. How does bankruptcy affect a joint account holder? Don’t be tempted to use a joint account as a way of putting assets beyond the reach of your creditors. Say you open a joint account with your neighbor Fred. You sell your Porsche and deposit the check. Fred then withdraws the check and buries the money in a tin can in his backyard, right next to the fence. This transaction is a fraudulent transfer, and Fred can be required by a creditor or Chapter 7 trustee to return the payment.
Can I shelter property by transferring it to family members? If you make a gift or other transfer for inadequate consideration to anyone, whether they’re in your family or not, a Chapter 7 trustee can recover the property or its value if your case is filed within one year afterwards. If you have an actual creditor who would be entitled to avoid the transfer, even in part, under your state’s statutory or common law of fraudulent transfers, a Chapter 7 trustee can exercise that power to avoid the whole transfer. Therefore, gifts to family members (or to anyone else) will not work (but see the paragraph on “family gifts” for a qualification of this rule). Let’s say you owe Uncle Seymour $100,000 because he loaned you that amount so you could get your cancer operation that, thankfully, was a success. If you repay more than $600 of that debt any time within the year preceding your bankruptcy filing, a Chapter 7 trustee could recover it as a “voidable preference”. It’s a “preference” if it allows Uncle Seymour to recover more than he would recover if he had to share like your other creditors. The rules about fraudulent transfers apply to anyone, not just family members. The one-year lookback period for preferences applies to any “insider”, which includes many business associates as well as relatives within the third degree of kinship. Uncle Seymour is related in the third degree. Your Cousin Bob is related in the fourth degree, so the lookback period for a debt to him would only be 90 days. What about family gifts? Example: you give your daughter an Aston Martin for her birthday. If it’s a real one worth $250,000, it’s avoidable as a fraudulent transfer. If it’s a Corgi toy costing $25, it’s not. Will the Uniform Transfers to Minors Act help me provide for my children? What effect does bankruptcy have on child support? Under the post-October 17, 2005 rules, domestic support obligations are top priority in a Chapter 7 "asset case", where there are funds to pay creditors. The debtor should file a proof of claim to have most of his or her liquidated estate used to pay off the child support obgliation. In a Chapter 13 case, your back child support payments will be paid through your Chapter 13 plan, in addition to the regular payments due after the petition date. These support obligations must be current in order to have your Chapter 13 plan confirmed. Moreover, to obtain a discharge in a Chapter 13 case, the debtor will have to certify that all post-petition child support obligations have been met. To put it another way, your ex’s bankruptcy case shouldn’t have any long-term effect on child support payments—and may even make it easier for him/her to make them, because he/she won’t have as much other debt—but will complicate enforcement in the short term. Practically speaking, you will need an attorney's help. What will happen to tuition prepayments for my children?
I got divorced after my case was filed. What happens to my property settlement? Will bankruptcy affect my right to recover for injuries I previously suffered in an accident? It is crucial that you claim the injury as property and must list it as such in the bankruptcy petition; otherwise you will be judicially estopped from bringing that lawsuit after you are out of bankruptcy. If you were injured on the job, you probably have a worker's compensation claim under state law or a like claim under federal law. Your right to receive compensation under these laws is fully exempt. Any right you might have to recover against a third party, however, would be part of your bankruptcy estate. Similarly, your right to recover under laws that compensate victims of crime would be fully exempt. Personal injury damages, not including damages for pain and suffering, are exempt to the extent of $18,450 if you elect the federal exemptions (and if your state even allows you to elect the federal exemptions). Note that what matters is when the injury occurred, not when you file suit. If you were injured in an accident yesterday, your bankruptcy estate owns your right to recover for those injuries if you file for bankruptcy today and file a personal injury lawsuit tomorrow.
Key terms used in bankruptcy Automatic Stay: an injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed. Bankruptcy Estate: all legal and equitable interests of the debtor in property at the time of the bankruptcy filing. Claim: means a right to payment, whether or not it has been reduced to a judgment, liquidated, fixed, contingent, matured, unmatured, disputed, secured or unsecured. Confirmation: approval of a plan of reorganization by a bankruptcy judge. Consumer Debt: means a debt incurred by an individual primarily for a personal, family, or household purpose, as opposed to business. Creditor: is a party who has a claim against the debtor that originated at or before the time that the debtor filed the bankruptcy petition. Debt: means liability or obligation to pay a claim. Debtor: the person who has filed a petition for bankruptcy. Dischargeable Debt: a debt for which the Bankruptcy Code allows the debtor’s personal liability to be eliminated. Equity: the value of a debtor’s interest in property that remains after liens and other creditors’ interests are considered. Exemption: property that the Bankruptcy Code or applicable state law permits a debtor to keep from creditors. Joint Petition: one bankruptcy petition filed by a husband and wife together. Liquidated Claim: a creditor’s claim for a fixed and known amount of money. Means Test: determines whether a debtor can file a Chapter 7 liquidation case or be required to file a Chapter 13 case. No-Asset Case: a chapter 7 case where there are no assets available to satisfy any portion of the creditors’ unsecured claims. Non-dischargeable Debt: a debt that cannot be wiped out (eliminated) in bankruptcy. Objection to Discharge: a trustee’s or creditor’s objection to the debtor’s being released from personal liability for certain dischargeable debts. Priority: the Bankruptcy Code’s statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full. Priority Claim: an unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid. Secured Creditor: an individual or business holding a claim against the debtor that is secured by a lien on property of the estate or that is subject to a right of setoff. Statement of Intention: a declaration made by a Chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate. Substantive Consolidation: putting the assets and liabilities of two or more related debtors into a single pool to pay creditors. 341 Meeting: a meeting of creditors at which the debtor is questioned under oath about his/her financial affairs. Despite the name, creditors rarely attend these meetings, and the questioning is done by the trustee. Undersecured Claim: a debt secured by property that is worth less than the amount of the debt. Unliquidated Claim: a claim for which a specific value has not been determined. Unscheduled Debt: a debt that should have been listed by a debtor in the schedules filed with the court but was not. Unsecured Claim: a claim or debt for which a creditor holds no special assurance of payment, such as a mortgage or lien; a debt for which credit was extended based solely upon the creditor’s assessment of the debtor’s future ability to pay. Venue: which courthouse a case is heard in. For a bankruptcy case, venue typically lies in the district in which the debtor resides.
What is surrender?
What is bankruptcy?
Referred from: (http://bankruptcy-law.freeadvice.com/) |
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