What happens when a bankruptcy petition is filed?

The “automatic stay” is immediately invoked at the instant of the filing of the bankruptcy case, and it prohibits creditors from taking collection action against the Debtor or the Debtor’s property without Bankruptcy Court approval. The Court issues a notice of commencement advising all interested parties of the filing of the bankruptcy case. This notice provides the case number, trustee, date of the meeting of creditors, deadline to file a proof of claim (if applicable), and deadline to file an objection to the discharge (if applicable).

What happens when I file for bankruptcy protection?

When a bankruptcy case is filed there is a temporary estate created. All of the debtor’s property is held by the estate during the bankruptcy process. The estate consists of all legal or equitable interests of the Debtor in property as of the date that the case is filed.

What if my creditors call me after they have been put on notice of my bankruptcy?

You need to contact your bankruptcy attorney. They likely violated the rules of bankruptcy and you may a legal course of action against the creditor that provides for money damages and attorney fees. We aggressively pursue these types of lawsuits on a contingent fee basis, which means that we do not receive any payment for our time until we win your case against the creditor.

What does Pro Se mean?

Pro Se means that a person is representing themselves in a legal matter. A Pro Se Debtor is a person who is going to handle their bankruptcy case on their own and will be held to know and understand all of the rules and procedures of the Bankruptcy Laws. Failure to adhere to the Code and Rules or with any court order could cause the Debtor’s case to be dismissed. We recommend that anyone faced with any type of legal proceeding seek the advice of a qualified attorney. In a bankruptcy case, this would be a bankruptcy attorney.

What Chapter of Bankruptcy should I file?

It depends on your unique circumstances. Generally speaking, Chapter 7 is appropriate for people who do not have enough income to pay some or a portion of their debts, and that person is not seeking to keep their non-exempt property.

Chapter 11, 12, or 13 (depending on if it is an individual, family farmer, corporation, or partnership) may be the appropriate solution for a debtor that has income or equity in property and can afford to repay some of the outstanding debts.

Filing for bankruptcy protection is a very important decision. Which chapter to file under is something that should be looked at from several angles to determine which chapter will best serve the debtor. It is important to seek the advice of a qualified bankruptcy lawyer in making these decisions. We never charge for your initial consultation.

What is the difference between a chapter 7, 11, and 13 bankruptcy?

Chapter 7- In a Chapter 7, Debtors are going to be able to carve out most of their assets. This is called exempt property. Their non-exempt assets may be liquidated by the trustee to pay the Debtor’s creditors. A Debtor can choose to reaffirm certain debts. By reaffirming a debt a debtor is agreeing to continue to pay that debt. Caution: there are rules on how often a person can file for bankruptcy. Many times, you will not be able to file for bankruptcy protection for another 7 years. This means that if you cannot afford a reaffirmed debt at some point during this period, bankruptcy protection for that debt will not be an option. Please seek the help of a qualified bankruptcy attorney to evaluate your case and to determine the best way to use your exempt property.

Chapter 11- You normally hear about Chapter 11 bankruptcies in the corporate sector. It allows corporations, partnerships, and some individuals the opportunity to reorganize their debts without having to liquidate all of their assets. Much like a Chapter 13, the Debtor is required to present a repayment plan. Once that plan is accepted by the creditors and confirmed by the Court, the Debtor will start to repay the debts according to the new repayment schedule.

Chapter 13- This chapter in the bankruptcy code is for individuals with current income to repay a portion of their debts over an extended period of time (3 or 5 years). Chapter 13 could be a viable solution for someone that is looking to retain certain assets and has the regular income to pay some of the debt.

Choosing which Chapter bankruptcy to file is an important decision. In order to qualify for a Chapter 7 bankruptcy, a person must meet the requirements of a means test. If they do not qualify for Chapter 7 they will be forced to file a Chapter 13 bankruptcy. It is important that you have a qualified person help you through the steps of filing for bankruptcy protection.

By Filing for Bankruptcy, What Debts can I get rid of (dischargeable debts)?

Generally speaking, most debts that are listed on your bankruptcy petition are dischargeable. However, some debts listed in 11 U.S.C. § 523 are not eligible to be discharged. Some of those debts are listed below. Again, these are debts that your bankruptcy attorney will more than likely not be able to get discharged:

• Most taxes and government fines
• Debts that came about from certain fraudulent conduct
• Debts caused by a death or personal injury that was caused by the debtors operation of a motor vehicle while intoxicated
• Student Loans
• Debts that are caused by the willful or malicious injury to another person
• Alimony and child support
• Debts that are not listed in your bankruptcy petition
• Post-bankruptcy condominium or cooperative owner’s association fees and dues.

Remember, this is just a small list of the most common debts that we are asked about. In any bankruptcy case, the creditor may also file a complaint to have their debt declared non-dischargeable.

What does the Trustee do in a Chapter 7 or Chapter 13 Bankruptcy?
In a Chapter 7 bankruptcy the trustee is appointed to collect and liquidate the non-exempt assets. The trustee is paid a percentage of the proceeds recovered from the sale of Debtor’s non-exempt assets. After the trustee sells the assets they take their percentage and give the remaining money to the Debtor’s unsecured creditors.

In a Chapter 13 bankruptcy the primary role of the trustee is to review the repayment plan set forth by the Debtor and distribute the payments accordingly. In reviewing this plan the bankruptcy trustee will determine if the Debtor will likely be able to stick with the plan and make all applicable payments. All payments under the plan will be made to the trustee who will in turn distribute the payments to the creditors. A typical Chapter 13 bankruptcy will have a repayment plan that will last 3 to 5 years.

What is a Meeting of the Creditors (341 Meeting)?
This meeting is generally held forty days after the bankruptcy petition is filed. The Debtor is required to attend and will have his or her testimony taken under oath. All of the Debtor’s creditors are notified of this meeting. While creditors are not required to attend, if they do choose to be there they will have the opportunity to ask the Debtor questions that pertain to the debt.

The trustee that is assigned to the bankruptcy case will also be at the 341 meeting and will ask the debtor questions concerning the petition and the debtor’s financial situation. During the 341 meeting, the Debtor will be required to show a photo identification and proof of a social security number. No photocopies.

What if I Don’t Show up for my 341 Meeting?
If the Debtor does not show up for the Meeting of the Creditors (341 Meeting), the bankruptcy case may be dismissed.

How long will a bankruptcy filing stay on my credit report?

The Fair Debt Reporting Act states that a bankruptcy filing may remain on a person’s credit report for a maximum of ten (10) years. If after ten years the bankruptcy filing is still on your credit report, please seek the advice of an attorney that is familiar with the Fair Debt Reporting Act.

What is an adversary proceeding?
It is a lawsuit that is generally filed by the Debtor against any creditors who are not adhering to the law after a bankruptcy petition is either filed or has been dismissed.

We update our FAQ section as much as possible to keep the content fresh and up to date, with current laws and rulings. If you have a question that you feel should be on the FAQ, please drop us a quick email and let us know.