This is a story about how Bank of America violated the bankruptcy discharge, hacking off Gus and Nikoleta, and me.  (I’ve changed the names of Gus and Nikoleta–all the rest of this is true.)  And then hit Gus and Nikki for a “foreclosure fee” while they were current.  And then did it again. Gus and Nikoleta came [...]The post After Bankruptcy: Bank of America Can’t Stop Themselves appeared first on Robert Weed.

Chapter 7 bankruptcy can last anywhere from 100 to 120 days from start to finish.  It basically works like this: once the Chapter 7 bankruptcy case is filed, there is a notice that goes out to all creditors, the debtor and the debtor’s attorney advising of an upcoming meeting called a 341 Meeting of Creditors. + Read MoreThe post How long does the bankruptcy process take? appeared first on David M. Siegel.

What is Chapter 13 Bankruptcy? Unlike a chapter 7 bankruptcy, where you must sell your assets to pay off creditors, chapter 13 allows you to reorganize your financial life so that you can keep your property. In chapter 13, you create a payment plan to pay off your debts. You submit the plan to the [...]

What Happens to my Credit Cards when I File Bankruptcy? The quick answer is that it depends. It depends on the status of your accounts. Your credit cards likely fall into one of these three categories:Cards on which you have a zero balanceOn the bankruptcy petition and schedules you must list all of your creditors, meaning people that you owe money to. However, if you have a zero balance then you do not owe them and they therefore do not have to be listed on the petition. This means you MAY come out of the Chapter 7 or Chapter 13 with the credit card. However, there are exceptions.Trustee may take your credit cardsThe credit card issuer may find out about the bankruptcy – many creditors constantly monitor their customers credit reports for signs on economic weaknessThe credit card issuer may cancel your zero-balance card – If they learn of the bankruptcy, the company may termite your account based on credit risk. However, some companies are happy to continue doing business with you because now you will not be able to file another Chapter 7 for eight years.Cards on which you have a balance but you are current on paymentsIf you owe a creditor money even if you are not in default, the credit usually as a matter of course will close the account and any of accounts that you have with them. If you happen to bank with the same company, they can freeze or close your bank accounts as well.If you file a Chapter 7 and want to keep the card you can contact the credit card issuer. However, absent an agreement to repay, they are likely going to close the account. In addition, it is typically not recommended that you agree to pay debts for unsecured things such as a credit card. The purpose of the bankruptcy is a fresh start and therefore you should come out of it with no unsecured debt.Cards on which you have a balance and are in defaultIf you owe a creditor money and are in default, the credit usually as a matter of course will close the account and any of accounts that you have with them. If you happen to bank with the same company, they can freeze or close your bank accounts as well. This can have devastating results if for example your paycheck was just deposited into the account, etc. so contact an attorney prior to filing bankruptcy. 

Why Do I Have to Take a Pre-Filing Bankruptcy Class and a Pre-Discharge Class? Why do I have to complete a pre-filing class? Before your bankruptcy can be filed, you must complete a credit counseling session. The cost ranges from $10.95-$50.00. The agency provides a certificate of completion that must be filed with the bankruptcy petition, schedules, and statements. The course is available online, over the phone, and through the mail. The agency must be approved by the U.S. Trustee.The alleged purpose of the credit counseling is to give you an idea as to whether you need to file bankruptcy or whether a payment plan with your creditors would suffice to get you back on your feet. However, the counseling is required even if it is obvious that a repayment plan will not work for your situation. This is usually the case when your debt is high and your income is low or you are facing balances on debts with inflated interest rates and penalties.The requirement is that you complete the counseling but does not require that you follow the counseling’s recommendation. Even if a repayment plan is feasible, you are not required to agree to it.Why do I have to complete a pre-discharge class? You are required to take an approved personal finance course before the court will discharge your debts in a Chapter 7 or Chapter 13. The agencies providing this service must be approved by U.S. Trustee. In a Chapter 7 the course is to be completed within 45 days after the date on which the creditors meeting was scheduled.  If you miss the deadline the court may close the case without a discharge of your debts. That means you will have to pay to reopen the case so that the course certificate can be filed in order to receive a discharge.If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for your situation.What is the cost of each course?The cost varies depending on which company you chose to go with. The typically range from $10.95-$50.00 depending on which company and which method to take the class. Online classes are cheaper than the phone course. Some companies may also have financial aid meaning that depending on income, they may waive the fee for taking the course. 

Debts that Survive a Chapter 7 BankruptcyThere are certain debts that are discharged regardless of whether a Chapter 7 or a Chapter 13 is filed. Discharged means that you will no longer be responsible for repaying them once the bankruptcy is over. In a Chapter 7 you will not have to repay any portion of the debts unless there are unexempt assets that the trustee divides among your creditors. In a Chapter 13 the repayment plan will most likely provide for some portion of the debts to be paid back. If you complete the plan successfully, the remaining unpaid debt will be discharged.Regardless of which chapter of bankruptcy you file, certain debts will be discharged with exempt of the portion paid back as mentioned above. These types of debts include credit cards, medical bills, some lawsuit judgments, obligations under leases and contracts, personal loans and promissory notes.In a Chapter 7 there are many debts that are not dischargeable that may be dischargeable in a Chapter 13. If a debt is not dischargeable, that means you owe them after your bankruptcy is over. There are certain debts that the bankruptcy does not affect at all; meaning that you will continue to owe them just has if you had never filed bankruptcy.Domestic Support ObligationsDomestic support obligations are child support, alimony and other debts in the nature of alimony, maintenance, or supportIn order for this debt to be nondischargeable, the domestic support obligation must have been established in a separation agreement or divorce decree, an order of a court or a determination by a child support enforcement agency.Other Debts Owed to a Spouse, Former Spouse, or ChildYou cannot discharge any debt that you owe to a spouse, former spouse, or child that was incurred in the course of a divorce or separation agreement.While the bankruptcy may get rid of your liability to the creditor, you are still liable to the ex-spouse if the creditor goes after him or her for the payment.Fines, Penalties, and RestitutionCertain tax debtsDischargeability of debts can be an complicated issue and should not be determined by this non-exhaustive list of some of the debts that are not discharged, If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for you. 

What is a Chapter 7? What is a Chapter 11? What is a Chapter 12? What is a Chapter 13?What is a Chapter 7?Chapter 7 is the most popular type of bankruptcy. In a Chapter 7 bankruptcy, you must fully disclose your property, debts and financial activities over the several years prior to the filing of the bankruptcy.  Typically three months after the case is filed, you receive a discharge of most of your debts with exception of certain nondischargeable debts.What is a Chapter 13?Chapter 13 is a reorganization for individuals. The individual can include sole proprietors and independent contracts but cannot include entities such as corporations or limited liability companies. Along with all of the documents required in a Chapter 7, you also propose a 3 or 5 year plan under which you typically must repay certain types of debts in full and usually some portion of your unsecured debt. Chapter 13 can be used to pay off missed mortgage payments over the life of the plan. Typically Chapter 13 is not the bankruptcy of choice because of the length of time before receiving a discharge and the extra legal fees involved. However, 10% to 15% of people who file under Chapter 7 are required to convert to a Chapter 13 bankruptcy because they have sufficient income to fund a Chapter 13 plan and at least partially pay back some of their creditors.    What is a Chapter 11?                A Chapter 11 Bankruptcy is typically for financially struggling businesses; used as a reorganization of their financial affairs. However, individuals may also qualify to file a Chapter 11. Individuals who consider Chapter 11 usually have debts in excess of the Chapter 13 bankruptcy debt limits or if the Debtor has substantial non exempt assets.  Chapter 11 fees can be cost prohibitive and are very complicated. You definitely need an attorney if you are going to file a Chapter 11. If you are considering filing a Chapter 11, contact an attorney that specializes in Chapter 11 bankruptcies.What is a Chapter 12?Chapter 12 is very similar to Chapter 13. However, you be eligible for Chapter 12, at least 80% of the debts must have arisen from the operation of a family farm. If you believe that Chapter 12 may be what you need, contact an attorney that specializes in Chapter 12 bankruptcies. If you are considering any type of bankruptcy, contact a bankruptcy attorney today. 

Debts that Survive a Chapter 13 BankruptcyThere are certain debts that are discharged regardless of whether a Chapter 7 or a Chapter 13 is filed. Discharged means that you will no longer be responsible for repaying them once the bankruptcy is over. In a Chapter 7 you will not have to repay any portion of the debts unless there are unexempt assets that the trustee divides among your creditors. In a Chapter 13 the repayment plan will most likely provide for some portion of the debts to be paid back. If you complete the plan successfully, the remaining unpaid debt will be discharged.Regardless of which chapter of bankruptcy you file, certain debts will be discharged with exempt of the portion paid back as mentioned above. These types of debts include credit cards, medical bills, some lawsuit judgments, obligations under leases and contracts, personal loans and promissory notes.Debts that survive a Chapter 13 bankruptcy no matter what include:Domestic Support ObligationsCriminal PenaltiesCertain TaxesIntoxicated Driving DebtsDebts Arising from Willful or Malicious ActionsDebts or Creditors You Do Not ListDebts that are discharged in a Chapter 13, not Chapter 7 include:Marital debts created in a divorce settlement (unless they are determined to be support)Debts incurred to pay nondischargeable tax debtsCourt feesCondo fees incurred after the bankruptcy filing dateDebts for loans from a retirement planDebts that could not be discharged in a previous bankruptcy due to failure to received dischargeYou can convert from one chapter of bankruptcy to another. When you convert, you are then subject to the dischargeability rules of the chapter to which you converted, not the chapter you started out in. There are many reasons you might convert from one chapter to another. Reasons include: inability to complete a Chapter 13 plan, abuse found by the court of a chapter 7 requiring conversion to a Chapter 13. You may also convert because it is determined that some of your debts are only discharged in a Chapter 13 and not a Chapter 7.Dischargeability of debts can be an complicated issue and should not be determined by this non-exhaustive list of some of the debts that are not discharged. If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for your situation. 

How Will the Bankruptcy Affect Me? I am Filing Bankruptcy: Will I Lose My Job? No employer may fire you because you filed bankruptcy. In addition, an employer cannot discriminate against you in other terms and conditions of employment; reducing salary, demoting you, or taking away responsibilities because of a bankruptcy. However, if there are other valid reasons for taking these actions, then the bankruptcy will not protect you. Simply put, if an employer wants to take action against you, they can as long as there are other valid reasons such as incompetence, tardiness, or dishonesty.How does my Employer Find out About the Bankruptcy?Typically if you are filing a Chapter 7, your employer rarely finds out. However, if you have been sued and are having your wages garnished, your employer is notified. The bankruptcy stops that garnishment, so again your employer is notified in order to stop the garnishment. If you file a Chapter 13, your employer typically will receive notice. In a Chapter 13 plan it is likely that the Judge will order that your Chapter 13 plan payments be deducted from your paychecks and sent directly to the trustee. In order to accomplish this, your employer or at least the payroll department is notified of how much money to withhold and where to send the funds.Do I have to do a wage order for my Chapter 13?The simple answer is that is depends. You may not like the idea of the wage order, however the order will make the plan easier to complete. The success rates of Chapter 13 cases is higher where the Debtor has a wage order for their Chapter 13 plan payments over Debtors who pay the trustee themselves. The very obvious explanation is that it is hard to spend money that you never see meaning that if you employer is deducting the payment from your check and mailing it directly to the trustee then you are not tempted to use a portion of the money for other purposes.Can Bankruptcy Effect Child Custody?There is no reported evidence of a parent losing custody because of a bankruptcy. Bankruptcy and divorce are so often related these days that one often times follows the other. Family law and bankruptcy are being to overlap in many ways requiring bankruptcy attorneys and Judges to know more about family law and vice versa.  However, keep in mind that bankruptcy does NOT relieve you of child support or alimony obligations.  

The lives of business bankruptcy clients are peopled with a less than obvious cast of creditors.   You need to flush them out and get them in line before the case is filed. Near miss I had a close call, or rather my client had a close call, this week when some new information just slipped out. Thankfully, it was prepetition. The client, a very bright entrepreneur,  thought that the wrongful death suit pending against him could not be included in his bankruptcy until a judgment was rendered.  And he was pushing to file immediately! BINGO, we had the name of another creditor for the filing. Now, I ask you, how could he have neglected to mention a wrongful death complaint, even if his involvement was as the employer of the accused driver?  That has to be another story. But further discussion brought out the fact that he had some further, related exposure to the customers of his business. The homeowners on whose job the driver was working were the beneficiaries of an indemnity clause in the contract between client’s business and the homeowners.  More BINGO’s. Narrow focus or bad assumptions on the part of the client,  one or the other just about torpedoed this case. Unseen spectors Another instance of entrepreneurial myopia stands out among my war stories. Client had run several, big dollar businesses, now closed. Highly anxious to file, and brings me a list of four credit cards as the sum total of his debts. It doesn’t seem to add up.  I ask, is this all?  Anyone else?  Are you sure? He kept denying that there was anyone else who needed to be included in the schedules.  I kept prodding and he was starting to get testy. Finally, at wits end, I asked him if there was anyone out there in his business past who wanted to sue him? Sure, he admitted, and reeled off six more names of former partners, investors, and other unhappy associates. BINGO! Add to your patter Whether you flush out these creditors by interview, document review, or questionnaire, you need to find the creditors beyond the ones who send monthly bills to the debtor. In your cross hairs should be Potential liabilities not yet the subject of suit Guaranties Warranties Indemnity agreements Unhappy customers Disgruntled partners, employees, or investors Can you add to this list of less than obvious creditors for a business bankruptcy?