Can I buy a house or a car while I’m in bankruptcy?
What happens if I fall behind on my house or car payments while I’m in the bankruptcy?
When am I going to get my discharge?
What should I expect at my 341 Meeting of Creditors?
What documents do I need to bring to my 341 Meeting of Creditors?
What creditors do I have to list?
What happens if my Trustee payment is late?
What do I do if I’m in bankruptcy and my creditors keep calling?
I received a Notice of Hearing, do I need to attend the hearing?
Can a creditor garnish my wages while I’m in bankruptcy?
When is my first Trustee payment due?
What are the different types of Debts?
How long does Bankruptcy show on my credit?
If I don’t have pay stubs what do I need to provide as proof of income?
What constitutes proof of payment?
When do I have to take my financial management course?
Why are creditors on my credit report when they were discharged in bankruptcy?
Can I buy a house or a car while I’m in bankruptcy?
It is possible to purchase a house or a car while you are in bankruptcy. If you plan on financing the property, you will need to get court permission. Permission can be obtained several ways depending on the type of bankruptcy you are in and where you stand in the bankruptcy process.
If you are a chapter 7 Debtor, you can either wait until your case is discharged or have our office file a Motion to Incur Debt with the court. You will need to consult with your attorney or paralegal to determine if there are any additional attorney fees involved. In order to have the motion filed, you must provide all finance documents, which we will provide to the court.
If you are a chapter 13 Debtor and your case is not yet confirmed, you will need to have our office file a Motion to Incur Debt. You will need to consult with your attorney or paralegal to determine if there are any additional attorney fees involved. In order to have the motion filed, you must provide all finance documents, which we will provide to the court.
If you are a chapter 13 Debtor and your case is confirmed, you can request permission from the Trustee. You will need to go through our office to do so. Please provide our office with the completed Incur Debt Packet. Once we receive the completed packet along with all requested documents, we will forward it to the Trustee. The Trustee will then review your request and provide you with their response in writing. In this method there are typically no attorney fees involved.
What happens if I fall behind on my house or car payments while I’m in bankruptcy?
If you fall behind on your payments to a secured creditor while in a bankruptcy, the creditor will file a Motion to Lift Stay. This is a motion requesting that the bankruptcy protection be lifted so they can begin foreclosure or repossession proceedings. If you want to keep the property, typically, we can work out an agreement with the creditor to allow you to keep the property.
In a Chapter 7, you will likely have to get the payments caught up prior to the hearing date, or in some cases, have it caught up prior to the discharge of your case.
In a Chapter 13, we can work with the creditor to allow you to repay your arrears over a six month period in addition to your regular monthly payments, or add the additional arrears into the bankruptcy plan. You will need to speak to your attorney or paralegal because there could be additional attorneys fees charged depending on the option you choose and the status of your bankruptcy case.
What is Confirmation?
Confirmation is a hearing held approximately 45 days after your 341 Meeting of Creditors. It is not always necessary for the Debtor to attend this hearing. Please check with your attorney or paralegal to see if your attendance is required. Confirmation is a hearing where the Trustee reviews your proposed repayment plan and makes sure that you are able to make your payments and that it meets the best interest of your creditors. The Trustee and creditors are allowed to object to your confirmation if they foresee a problem. These objections are commonly worked out prior to the hearing and a mutual agreement is reached. You do need to be able to show the Trustee that your budget provides adequate income to pay both your bankruptcy payments and your regular living expenses.
What is TRCC?
TRCC is the Trustee’s Recommendation Concerning Claims. This is a hearing where the Trustee lists all of the claims and how he intends to treat the claims. Your attorney will then review the TRCC and have the opportunity to respond or object to claims, or the treatment of claims. Your attorney will do whatever is in your best interest to protect your rights. If the claims are more than what you initially provided for in your plan, your payment will be adjusted.
When will I receive my discharge?
In a Chapter 7 bankruptcy you should receive the discharge no less than 60 days after your 341 Meeting of Creditors.
In a Chapter 13 bankruptcy, you should receive your discharge in accordance with your bankruptcy plan. This is typically no less than 36 months and no longer than 60 months after your first payment is due.
Myth 6:
It's hard to file for bankruptcy.
Not True. There is a lot of paperwork involved, but having a skilled attorney makes the process much smoother. Filing bankruptcy is even electronic these days, which minimizes paperwork on your part.
What should I expect at my 341 Meeting of Creditors?
The 341 Meeting of Creditors is a short hearing held in front of you and any creditors that would like to attend. Your attorney will be present to represent you and the Trustee will be there also. Creditors are allowed to attend but typically none show up. The hearing will last roughly 15 minutes and the Trustee will ask you general questions about the statements and schedules that were filed in your case. You will have previously reviewed and signed all of the documents, so there should be no surprises. Everything that you state in the hearing is on the court’s record and is said under the penalty of perjury. The Trustee will also ask what caused you to file this bankruptcy and if you have had any previous cases. All in all, the hearing is short, to the point, and informs the Trustee about your situation.
What documents do I need to bring to my 341 Meeting of Creditors?
This varies depending on the jurisdiction of your case. For Northern District cases you need to bring your last two years tax returns, current pay stubs, drivers license and social security card. In Eastern District cases you need to bring your last two years tax returns, current pay stubs, drivers license, social security card, home insurance, car insurance, two months current bank statements (originals not printouts), and any investment or retirement account statements.
What is feasibility?
Not True. You can file together or separately, that is your choice. In many cases it makes sense for husband and wife to file together, but in some instances the spouse might not want to file. This is absolutely fine and definitely allowed by the court.
What creditors do I have to list?
You must list all of your creditors when you file for bankruptcy. This includes your credit cards, medical bills, personal loans, payday loans, student loans, mortgage, car note, and even loans to family members and friends. All creditors that you owe $0.01 or more have to be included in your bankruptcy. All creditors are listed under the penalty of perjury, so it is important to list them all. If you forget about some and then need to add them, please consult with your attorney or paralegal to see what the court’s fee is and if they can still be added. To add a creditor you need to provide their name, address, account number, amount that you owe, and the date that the debt was incurred.
What happens if my Trustee payment is late?
Your first Trustee payment cannot be late. If it is, the Trustee will issue a 48 hour Notice of Intent to Dismiss your case. After your first payment you need to do the best to get your payment in on time. There can be some rare occasions that would allow your case to be dismissed without any notice. Typically the Trustee will issue an 18 day Notice of Intent to Dismiss which allows you some time to get the payment in before they dismiss your case.
What is a wage order?
A wage order is a form that authorizes the Trustee to take your bankruptcy payment directly from your paycheck. Everyone who is employed is required to be under a wage order. You will fill out the wage order form and submit it to the Trustee. The Trustee will then submit that to the Court and the Court will issue an Order to your employer to withhold the funds from your check. You do not need to provide a copy of the wage order to your employer. The wage order form can be found on our resource links page.
How does the wage order work?
The wage order pulls your Trustee payment directly from your paycheck. You need to remember that payment due date are not adjusted due to a wage order. Under a wage order, if you see that payments are not coming out of your paycheck, you must mail them in yourself. If the Trustee withholds part of your payment prior to the payment due date, it is your responsibility to mail in the other part of the payment. Remember, under a wage order you are always paying early, never late. By the due date, the Trustee should have withheld enough to make the full payment. If enough has not been withheld, it is your responsibility to send in the difference. It is also your responsibility to make sure that your employer is making the payments even while you are under the wage order.
What do I do if I’m in bankruptcy and my creditors keep calling?
If your creditors continue to harass you after your bankruptcy is filed you need to give them your attorney’s name and phone number. Also, get their name and number and provide it to your attorney’s office. We can then call the creditor and advise them that under the bankruptcy code they are required to stop all collection efforts.
I received a Notice of Hearing, do I need to attend the hearing?
This can depend on the type of hearing as well as the status of your case. The best thing to do is contact your attorney or paralegal and ask if your attendance at the hearing is required.
Can a creditor garnish my wages while I’m in bankruptcy?
No, a creditor cannot garnish your wages while you are in bankruptcy. The Attorney General can continue to garnish for current child support obligations, but cannot garnish for delinquent support obligations, if those obligations are provided for in your plan. The IRS cannot place liens, levies, or garnishments on you while you are in bankruptcy, in most situations.
When is my first Trustee payment due?
Your first Trustee payment in a Chapter 13 is due 30 days from the date your case is filed. Filing your case sets your due date in stone and it cannot be changed. Make sure that you get your first Trustee payment paid in full and on time.
What are the different types of Debts?
There are three main types of debt. The first category is secured debts. Secured debts are debts that have collateral against the note. Examples of a secured debts are your house and car. If you don’t pay your house payment, the creditor will pursue foreclosure. If you don’t make your car payment the creditor will repossess the car. The second category of debt is priority debt. These debts are debts owed to the government. Examples of priority debt are IRS debt and back due child support. These are debts that you typically have to repay , however there is no collateral to take if you do not. It is important that you discuss these debts with your attorney so they can advise you what your repayment responsibility is. The third main category is unsecured debt. Unsecured debts are the other items on your credit like credit cards, medical bills, payday loans, personal loans, etc. In most cases, these debts can be discharged in your bankruptcy. One type of unsecured debt that is not discharged in bankruptcy is a student loan. If you have any student loans you should consult with your attorney to see what your options are.
How long does Bankruptcy show on my credit?
Bankruptcy stays on your credit about 7 to 10 years. Although the bankruptcy will stay on your credit, you can start rebuilding your credit once your bankruptcy is discharged. Making current, full payments on debt is one way to start building your credit while you are in the bankruptcy. Once you are out of bankruptcy, make sure that you watch your income to debt ratio and try to not finance more than 40% of your credit limit.
If I don’t have pay stubs what do I need to provide as proof of income?
If you don’t receive pay stubs you can show profit and loss statements, social security/disability benefits statement, or even a letter from your employer stating your earnings. This depends on everyone’s unique employment situation. The best way to thing about proving income is to first think “How do I make my money?” Then all you need to do is provide written proof of that. If you have questions on what is acceptable proof of income in your situation just check with your attorney or paralegal and they will be more than happy to help.
What constitutes proof of payment?
Proof of payment is a copy of a money order, copy of a cashiers check, front and back of a personal check, or a bank statement showing that a check cleared. A front side of a check alone does not prove that the check was ever cashed. A copy of a receipt also does not always prove that a payment was made. It is important that when you make payments to both the Trustee and your creditors that you always keep proof of that payment.
When do I have to take my financial management course?
In a Chapter 7 bankruptcy your certificate must be filed with the court within 45 days from the date of your original 341 hearing. We suggest that you take it as soon as possible to prevent any last minute mishap that would prevent you from taking it.
In a Chapter 13 bankruptcy, you will take the financial management course at the Trustee’s office once your 341 hearing is concluded. Their office will then send us your certificate of completion.
Why are creditors on my credit report when they were discharged in bankruptcy?
In some cases, not all creditors are removed from your credit report after your bankruptcy is discharged. This is commonly just an oversight by the creditor or the credit-reporting agency. All you need to do is submit a dispute to the credit-reporting agency and provide a copy of your Discharge Order. The agency will then review your dispute and remove the creditor from your report if your dispute is correct. It is good to wait about 60 days after your case is discharged to review your credit. This allows time for the creditors to be removed without you having to file a dispute.