There will be a mandatory 341 Meeting of Creditors hearing.
In every bankruptcy case, there is a mandatory hearing called the 341 Meeting of Creditors. This hearing usually takes place about one (1) month after your case is filed. It is run by an attorney from your trustee’s office. Our office will provide you with an attorney who will also be at the hearing to assist you. That hearing gives the trustee and your creditors the opportunity to ask you questions about your case and any collateral securing creditors’ claims. If you are filing a joint case (both husband and wife), then you both must attend. You should arrange to be in the hearing room a minimum of thirty (30) minutes early.
You must make your automobile and mortgage payments if you want to keep your automobiles and real property.
If you have a mortgage or mortgages on your residence, and you want to keep your home, you are required to make those payments directly to the creditor, every month, as they come due after your case is filed. Also, if you want to keep your automobiles, you will need to make your auto payments every month, as they come due after your case is filed. If you are behind on your auto and/or mortgage payments, you must let your attorney know before your case is filed.
You will need to continue to pay your child support and spousal support after filing.
All on-going child support and spousal support payments must be paid on time, every month, after your case has been filed.
The filing of a bankruptcy case does not stop criminal process.
Even though bad checks might be included in your Chapter 7 case, the Chapter 7 will not prevent creditors from pursuing bad check warrants against you. Furthermore, if you are under probation, you must abide by the terms of your probation order, failure to do so could lead to your probation being revoked. Finally, if you are ordered to appear in court for child support contempt, bad checks or any other court or administrative proceeding, you MUST appear in that court or a Bench Warrant may be issued for your arrest. Our representation of you does not extend to criminal matters.
You cannot borrow money while your case is open.
While your bankruptcy case is open, you cannot borrow money (even from family or friends), use credit cards, finance any purchases, mortgage assets, or otherwise incur new debt without first getting the trustee’s permission.
You cannot sell or quit claim your home while your case is open.
While your bankruptcy case is open, you cannot sell, quitclaim, give away or otherwise dispose of any assets, including real estate, without the Bankruptcy Court’s permission. If you need to sell an asset, you should obtain a proposed sales contract, make it subject to the Bankruptcy Court’s approval, and provide a copy to our office. We then can file a motion with the Court to have the sale approved. Typically, once we have received a copy of the contract, it takes 45 to 60 days to get it approved by the Court.
You must list all cosigners and cosigned debts on your bankruptcy petition.
Any debt that you are liable on, whether you have a cosigner or you cosigned for somebody else, must be listed in your schedules. You also must list the names and complete mailing addresses of the people who are liable on the debts with you.
You must list all taxes, law suits, child support, student loans, etc. on your petition for bankruptcy.
In a bankruptcy case, ALL of your debts or alleged debts MUST be listed on your petition. How they will be treated in your case may be a different story, but we need to know about all of your creditors (whether you agree with the debt or not) that you owe or may owe. If you have a question or are uncertain, err on the side of caution and list any and every debt you can think of.
You must list all claims you may have against third parties on your bankruptcy petition.
In a Chapter 7 case, all of your assets MUST be listed in your schedules. This includes any and all claims arising out of personal injury, workers compensation, breach of contract, employment discrimination, social security, etc., whether or not a lawsuit, complaint or claim has actually been filed. Further, if any such action arises while your case is pending, then you must notify our firm so that we may disclose it to the Bankruptcy Court, as well. Failure to list these claims could result in your losing the right to recover against them. If you have a claim against a third party and wish us to assist you with it, we will be more than happy to discuss it with you. If you have retained other counsel, please let us know so that we may help your attorney to be approved by the Bankruptcy Court.
You should include past-due utilities unless they are paid current before you file.
You can include back payments owed for utilities. If you do, however, the utility can require a double deposit within twenty (20) days after the filing of your case. More often than not, it is cost-effective not to include the utility and to simply work it out directly with that creditor before filing. If a utility is a problem, please be sure to discuss it with your attorney.
You should disclose all preference payments you may have made on you bankruptcy petition.
One of the goals of the entire bankruptcy system is “equality of distribution,” so that all creditors share equally in the limited assets that are available. The bankruptcy code has a number of provisions designed to equalize distribution among creditors, frustrate attempts by debtors and creditors to skew that distribution, or address a situation where such skewed distribution takes place through happenstance. None of those provisions is more important, or more frustrating to creditors and many debtors, than the preference provisions.
A preference is simply a transfer before bankruptcy that has the effect of paying one creditor more than that creditor would have received if the transfer had not been made. One of the things that is disclosed in a bankruptcy filing is whether any payments or other transfers were made shortly before filing. In addition, trustees will review records like bank statements, real property records, and the like, looking for such transfers. The trustee may make demand for the return of such assets, so that the value of the transfers may be shared with other creditors. The trustee also has the ability to file a civil suit and obtain a judgment for a preference.
It is important to understand that the preference statutes impose what lawyers call “strict liability,” i.e., a given set of circumstances gives rise to liability, regardless of the intent of the parties. The trustee does not have to prove that the debtor was trying to improve the position of the creditor, or that the creditor was trying to beat other creditors to the punch. If a payment or a transfer has the effect of improving one creditor’s position relative to other creditors, and no defenses exist, the trustee is entitled to recover the value of the transfer.
In general, a preferential payment to a third party is one that occurs within the 90 days prior to bankruptcy. Payments made within one year before bankruptcy to “insiders,” who are generally business partners, family members, and the like, can be set aside as preferential. There are some technical issues to consider–for example, a payment made by check is effective as of the date the check cleared, not the date on the check or the date it was mailed. There are also some defenses to preferences, usually available in a business rather than a consumer setting. Preferences can be voluntary payments, like a check sent in payment of an invoice, or involuntary, like attaching a bank account.
Preference recovery is generally a matter between the trustee and a creditor. When the creditor is a third party the debtor may not care very much. When the creditor in question is a relative, however, most debtors are very concerned indeed. One of the most common scenarios that lead to preference litigation is a debtor who tries to get debts to family members paid before filing bankruptcy. It is a natural thing to try to do. After all, no one wants their financial trouble to affect family members. But, that instinct can make plenty of trouble for debtors and those they try to pay. It is particularly frustrating when the debtor has taken money from something like a 401k plan or IRA, which a trustee cannot touch, used the money to pay a family member, and the result is a lawsuit against that family member. But that is just the most obvious kind of preference. They are not always that easy to identify; in fact, there are even “indirect” preferences. Trustees know them all–that’s what they are paid for.
There are different kinds of bankruptcy trustees.
Actually, there are several types of bankruptcy trustees:
• The United States Trustee is responsible for oversight of the bankruptcy process as a whole. The United States Trustee’s duties are to maintain and supervise a panel of private trustees (usually, but not always, private attorneys) to serve in Chapter 7 cases, review fee applications filed in Chapter 11 cases, monitor plans and disclosure statements in Chapter 11 cases, monitor activities of creditors’ committees, monitor the progress of Chapter 11 cases, and assist the United States Attorney in criminal prosecutions.
• In a Chapter 7 case, the United States Trustee appoints the trustee from a panel of private trustees. A Chapter 7 trustee is responsible for representing the interests of the debtor’s estate and creditors as a whole.
• In a Chapter 13 case, the United States Trustee appoints a standing trustee to conduct the duties of the United States Trustee in Chapter 13 cases.
Recently incurred debts and use of credit cards may not be dischargeable.
Most credit card debt can be wiped out in bankruptcy. The most common way to lose that right is for a lender to prove they were defrauded. Only rarely do individuals intentionally charge up a credit card without having some intention of eventually repaying it and they are even less likely to confess it in Court. So when confronted with this issue, Judges have to look for evidence of fraud in the behavior of the person seeking a bankruptcy discharge.
A common indicator of fraud in a bankruptcy case is substantial credit usage in the months proceeding the filing of a bankruptcy. Creditors frequently try to discover if there were substantial credit usage and charges that occurred after you first consulted with a bankruptcy lawyer.
Bankruptcy law presumes fraud if cash advances over Seven Hundred Fifty ($750) were made during the seventy (70) days, or “luxury” purchases totaling more than Five Hundred ($500) during the ninety (90) days, before a case is filed. However, an adversarial proceeding filed in a bankruptcy case alleging fraud can look toward charges made outside of ninety (90) days. It is important for you to bring to your attorney’s attention any charges on your credit cards that fit the criteria above that were made at any time.
You should not tamper with your assets before filing a bankruptcy case.
Do not sell, buy, trade, or affirmatively do anything to any secured or unsecured assets before or immediately after the filing of your case before discussing with your attorney.
Do not sign a reaffirmation agreement without serious consideration of the potential consequences.
Do not reaffirm anything you cannot afford. If you are reaffirming multiple items, you must consider the total amount of your reaffirmations. Do not sign any reaffirmations without discussing with your attorney.
As a court approved debt relief agency, we help people file for bankruptcy relief under the U.S. Bankruptcy Code. This statement is required under the United States Bankruptcy Code pursuant to Section 528(a)(4).