1. How long does the bankruptcy take?

Generally, after filing the bankruptcy case you will meet with the trustee at what is called a Section 341 meeting about seven or eight weeks later. After that, you will receive your bankruptcy discharge approximately three months later. So, the general time frame from beginning to end for a Chapter 7 case is about five months.

2. If I am surrendering a car, home, or other collateral in the bankruptcy how long do I have and what is the process for turning it over?

If you indicate in your bankruptcy petition that you’re going to surrender property, then you are required to perform your intent within a certain amount of time. If you are surrender in an automobile, you can generally expect that your car will be turned over to the creditor in about 30 days after filing bankruptcy. If you surrender real-estate, then the process can be considerably longer. The creditor will obtain permission to start or continue a foreclosure against the real estate from the bankruptcy court. The foreclosure itself continues in the state court and takes anywhere from 6 to 12 months, depending on which county you live in and a number of other factors.

3. If I surrender my home can I have the electric and water shut off? If so, if there is damage to the home am I responsible for it?

We generally recommendedthat you contact the mortgage company before shutting off utilities. This allows them the opportunity to come in and weatherproof the real estate to prevent damage. We recommended that you notify them both by telephone (if possible) and in writing. Keep a copy of the letter you sent to them. I have had a few situations where my client swears that he told the mortgage company directly that he was leaving the property and they swear that he did not. In any event, he was not responsible for any damage that may have occurred to the house.

4. What if after I file I find more debts that I didn’t know I had, can I add them on? How long do I have to do this? Is there any cost?

You are required to list all of your debt in your bankruptcy when it is filed. However, it does happen that occasionally a creditor will be missed. When this happens the creditor can be added to the bankruptcy for an additional fee.

5. If I change my mind on my intentions to surrender or reaffirm(keep) a debt, what do I need to do then? Is there any cost?

If you change your mind about keeping or surrendering any property in your bankruptcy, then the bankruptcy petition must be changed. There is an additional cost for this change and strict time limits app;y as well.

6. What happens if I get behind in payments on a debt that I wanted to keep?

If you indicate in your bankruptcy petition that you are going to keep a car, for example, it is necessary to keep your payments current. Typically, you will sign a document called a "reaffirmation agreement" indicating that you intend to keep the car and continue to make the car payments just as if you had not filed bankruptcy. In the event that you fall behind in payments, the creditor can ask the court for permission to foreclose or repossess and take the property away from you just as if you had not filed bankruptcy. In some cases, it may be possible change your statement of intent to surrender the property and you will not have to pay the balance owed on it after the creditor sells it.  However, if you really want to keep the property and have fallen behind nonetheless, it may be possible to convert a Chapter 7 case to a Chapter 13 case in order to permit you additional time to catch up on the missed payments.

7. I have already filed and creditors that I listed are still sending me bills and/or calling me. What should I do? Shouldn’t they have been notified by now?

Sometimes after the filing of a bankruptcy creditors will continue to send bills for a period of time. They are not supposed to do this because it is an attempt to collect a debt. However, most creditors will not knowingly send a bill to you or attempt to collect a debt after you have filed your bankruptcy. The problem arises in those situations where creditors have large billing departments that are slow to respond to the bankruptcy filing. It sometimes takes two or three months of billing cycles for the creditor to stop sending bills. So long as the creditor is not doing anything more than sending bills to you, it is generally not a problem. However, if the creditor is calling you or taking any other step to collect the debt you should notify your attorney immediately so that we can contact the creditor on your behalf and see that this attempt to collect the debt stops at once.

8. The trustee has sent me a letter requesting more information, should I send that directly to him or send it to your office?

Any information that you have been requested to provide to the trustee should be forwarded to our office first. We will then review the information to be sure that it is exactly what the trustee needs before we forward it on to the trustee. You are represented by your attorney and should not attempt to contact the trustee or creditor directly without first discussing the matter with our office.

9. My mortgage company sent me a letter saying my mortgage was sold, do you need that information?

Mortgage companies buy and sell mortgages regularly. They are required to send you information when this occurs. It is not necessary for you to do anything other than make sure that you send your payment to the correct address.

10. What does the "discharge" mean?

A "discharge" means that you are no longer legally responsible for the debt. When you get your discharge from the court, you’ll notice that it does not contain a list of all of the debts discharged; rather, it simply says all of the debts that are legally dischargeable are discharged. This is normal. If you are interested in calling the court to determine whether or not your discharge has been issued, call the court’s voice information number: 800-726-1004. ONLY THE DEBTS THAT YOU HAVE LISTED IN YOUR BANKRUPTCY PETITION WILL BE DISCHARGED.

11. Creditors that I listed on my bankruptcy are still showing up on my credit report. What needs to be done to take care of that?

Filing a bankruptcy is no guarantee that the creditors will correctly report the status of your debt to the credit collection bureaus. Therefore, after filing your bankruptcy and receiving your discharge, you should take it upon yourself to obtain a credit report and inspect it to be sure that all of your debts are listed as discharged in bankruptcy with a zero balance. If any of them are not properly reporting your account status, you should contact the credit bureau and obtain the form needed to challenge information listed on their report. You can explain that the debt was listed in a bankruptcy petition, that you’ve received a discharge, and that the debt should be listed as a balance of zero, discharged in bankruptcy. The credit reporting company must then temporarily remove the entry from the credit report and give the creditor an opportunity to correct the information. We can produce forms for you to send.

12. Can I reaffirm (keep) a credit card?

Reaffirmation is for secured debts. Credit cards are generally unsecured debts. I generally don’t advise keeping any credit cards because they’re easy to replace after filing bankruptcy. One exception is when the card is issued by a credit union, and you have other debts with the credit union as well. Credit unions will oftentimes have credit cards that are cross collateralized with other loans that you may have. For example, you may have an account with Mid-First Credit Union. You have a car loan with the credit union and also a Visa card with the credit union as well as checking and savings accounts. In many cases, the fine print of the document you signed when you obtain the loan, credit card, and open your accounts indicates that the car secures the payment of the credit card, which is also secured by the money that you have in your checking and savings. Therefore, if you are going to keep the car in a Chapter 7, you may be required to reaffirm on the credit card as well. Otherwise, you may not be able to reaffirm only on the car because of the cross collateralization agreement. If you have any questions about cross collateralized loans, you should discuss it specifically with your attorney .

13. Why has my mortgage co or my car loan that I am reaffirming (keeping) stopped sending me bills. When will they start sending them again?

Creditors sometimes will stop sending bills because they are afraid that someone may claim they’re trying to collect a debt in violation of the automatic stay imposed by the bankruptcy law. We will generally send them a form which you will sign and I will sign indicating to them that you wish to have these statements sent to you once more. In the meanwhile, even if you’re not sent the bill, you are responsible for making the monthly payment to the creditor. Otherwise, the creditor will ask for permission to repossess the car, for collateral or to foreclose on the house.

14. If I listed a utility bill do I still need to continue making payments?

Utility bills should be paid only for the current usage after filing the bankruptcy. Any debt that is owed to the utility company prior to the bankruptcy filing will be discharged in the bankruptcy.

15. How should I file my taxes while I am in bankruptcy? How about once I am discharged/closed? What about the refund?

How you file your taxes is not affected by your bankruptcy filing. Tax refunds are property like anything else that you own. Though you may not be able to get the tax refund until you file your taxes, the tax refund itself is still part of your bankruptcy estate. Therefore, the trustee will ask you whether or not you expect to get a tax refund. If you receive a tax refund of any significant amount, you can generally expect that it will be lost to the trustee in your Chapter 7 bankruptcy. In Chapter 13 the rules are a little bit different and you’re generally allowed to keep the first $800 if you are a single filer or $1,600 if you are filing a joint petition. In a Chapter 7 case, the amount you would be able to keep depends on the amount of the property that you listed in your schedules, and the other exemptions that you have taken in your bankruptcy petition. It is not possible to answer the question, “How much of my refund will I be able to keep?” with a blanket or standard answer. Every single case is different and even the different trustees in Chapter 7 approach the process a little bit differently. Basically, you need to know that if you are due a tax refund, only for the one year affected by the bankruptcy, it is part of your bankruptcy estate. If you have a large refund coming, you can expect to lose some or all of that in the bankruptcy process. In most cases, this is a small price to pay for the amount of debt that you’re going to be discharging in your bankruptcy .

16. Once I am filed, will I be able to purchase or lease a car or try to obtain any credit whatsoever? What about before I file?

After filing your Chapter 7 bankruptcy, you are free to go out and purchase another vehicle. If you purchase a vehicle before filing, it must be listed on your bankruptcy. It is generally a bad idea to incur new debt prior to filing a bankruptcy in Chapter 7. However, depending on your individual circumstances, buying a car before filing may make sense as you will be able to choose from a larger number of potential financing companies before filing a bankruptcy than you will be able to for the first six months after filing bankruptcy. This is because there are some lenders that will not lend to someone who has filed bankruptcy until they get a discharge. Some lenders do not require this. Therefore, if you need to replace the car soon it may be better it to replace it prior to filing your Chapter 7 if you are unable to wait for about six months after filing the case.

17. I recently incurred some debt on my credit cards, can I still file?

Charging debt on credit cards before filing bankruptcy can create a problem. The bankruptcy code states that if you incur more than $1,225 for luxury goods or services or get cash advances aggregating more than that amount then the debt will be considered non dischargeable in your bankruptcy. The best approach is not to incur any charges on credit cards while you’re considering a bankruptcy. If you have made any recent charges before filing, be sure to discuss this with the attorney. You could have serious problems if you charge up lots of debt immediately before filing a bankruptcy.

18. A creditor for a debt that I listed on my bankruptcy is now coming after my spouse. Can they do that? I didn’t think my spouse was a co-debtor on the debt. What do I need to do to find out if my spouse is the co-debtor?

If you discharge the debt in your bankruptcy and now the creditor is attempting to collect from your spouse or ex-spouse, that may mean that the spouse or ex-spouse actually signed as a jointly obligated person on the credit card application. You would need to refer to the actual documentation to determine whether or not this is the case. Don’t take the creditor’s word for it, and demand that they show you a copy of the document with the spouse’s signature on it.

19. If I have a doctor's bill or other bill that I want to continue to pay, do I still need to list them? Do I have to list everyone that I owe?

It is absolutely necessary to list everyone you owe money to in your bankruptcy. You are not permitted to pick and choose who you list. However, that does not mean you cannot pay any of these creditors after your bankruptcy. For example, many of my clients tell me that they intend to pay their doctor, as they can, after their bankruptcy because of a sense of moral obligation to the doctor and also because they want to continue to have the doctor treat them and their family. This is a matter that is between them and the doctor, however, the doctor is absolutely not permitted to attempt to collect any debt that is discharged in the bankruptcy .

20. I have a pending garnishment. Will the bankruptcy stop the garnishment? If so how long does that take? Will I get the money back?

Money that is garnished from your paycheck after the filing of your bankruptcy will be returned to you. How long this takes varys from case to case. You cannot simply notify your employer of your bankruptcy filing and expect that the garnishment will stop. Your employer, similarly, is not permitted to stop the garnishment simply because you tell him or we tell him that you file a bankruptcy. Likewise, we simply cannot notify the Municipal Court that this issue in the garnishment of the bankruptcy filing and expect them to stop it. The proper process is for us to notify the attorney who caused the garnishment to start in the first place. That attorney is supposed to contact the court and arrange for the order that caused your employer to garnish your wages in the first place to be stopped.

21. How will a divorce affect my bankruptcy?

While you are in a bankruptcy proceeding you are not permitted to institute or continue a divorce or other domestic relations proceeding without permission from the bankruptcy court. This is called obtaining relief from the automatic stay. If you are involved in a domestic relations matter or expect you will be, please notify your attorney of this so that they may take the proper steps in order to have your domestic relations matter proceed without difficulty. If you proceed without telling your attorney, actions taken by the domestic relations court may be set aside or rendered void.

22. What if my employment status changes? I get a new job or I lose one? How will that affect my bankruptcy? Will I need to report that to you?

It is necessary to report changes in your income.

23. I surrendered my home in the bankruptcy but I keep getting property tax bills, am I responsible for paying that?

Property tax bills will continue to go to the person who is listed in the property tax records as the owner of the property. Even though you may surrender the property in your bankruptcy, you will still continue to own the property until it is sold at a sheriff’s sale. Therefore, you’ll continue to receive bills from the tax department. However, when the property is sold, before the mortgage company gets paid, the tax bill will be paid and so ultimately there will be no tax bill outstanding to assess against you. The home owner still has all the obligations of home ownership.

24. What if I owe taxes, can I discharge taxes in my Chapter 7?

Discharge of taxes in a Chapter 7 is a complicated matter that cannot easily be answered in the short space that we have here. Generally speaking, income taxes older than three years that have been assessed for more than 240 days and were filed on time and not otherwise not dischargable as a result of fraud or other reasons can be discharged in a Chapter 7.