If there is a question/answer you do not find in here, call us at (702) 252-4673. We can provide you with a packet full of information.
What is the Attorney Statement?
The Attorney Statement is a short form that states the name of the attorney and the amount you paid for the legal services.
What sort of documents will the Trustee expect me to provide on or before the hearing?
What is credit counseling?
Credit counseling is a one-time, one-hour session that everyone who files bankruptcy must participate in prior to filing bankruptcy. At the end of the session, a certification will be provided showing the debtor attended a mandatory consumer credit counseling session. This “session” may be attended in person, telephonically, or even via internet. Only agencies recognized by the Office of the United States Trustee will be accepted. Otherwise, you have just wasted your time and your money on a useless certification. A list of approved credit counseling agencies is provided.
What happens when the bankruptcy is filed?
The first thing is the Automatic Stay. The automatic stay makes it a violation of federal law for any of your creditors to pursue any remedies against you including filing a lawsuit, continuing an existing lawsuit, sending you letters requesting money, or even calling you on the telephone. A creditor violating this rule may be brought before the Court and sanctioned. However, a creditor may also file a motion with the Court seeking permission to continue to pursue collection actions. This typically only happens if you are delinquent on your payments on a house, car, or other secured loan. The Court will generally conclude that if you are not paying for it, than you do not deserve to keep it. This does not apply to property obtained with an unsecured credit card. For example, if you buy a toaster with a Visa card, Visa will not come and ask for the toaster back. Unless of course, you bought the toaster immediately before filing in which case they may ask for the money back for the charge, but you’ll probably get to keep the toaster.
What is the 341 meeting of creditors?
About 30 – 35 days after filing you attend what is known as the 341 Meeting, commonly known as the Meeting of Creditors. This is a meeting of your creditors and its name refers to section 341 of the U.S. Bankruptcy Code. Your attendance is required. Creditors rarely show up for this meeting. It will be you, your attorney, and the U.S. Trustee.
The Trustee is the person who administers or handles your bankruptcy matter. He/she actually represents the creditors and their job is to find any property you have that is not protected by a federal or state exemption, and take that property so it may be sold and distributed to your creditors. You’re going to see other people at this meeting also. They are more than likely not your creditors, but instead other debtors and their lawyers. A creditor may be there for your case, but not usually. This is probably because there is little the creditors can do to hurt you in bankruptcy if you have honestly filed your schedules and have very little in the way of assets. The meeting itself takes about five to ten minutes once your name is called. The Trustee will ask you to provide identification in the form of a driver’s license, or a state picture identification card, as well as a second form of social security identification such as a social security card, W-2 statement, or paycheck stub. The Trustee will then swear you in under oath. This oath states that you will tell the truth. The hearing is conducted under penalty of perjury just as if you were in a courtroom in front of a judge. The Trustee will ask you a series of questions that may vary from Trustee to Trustee and even from debtor to debtor in front of the same trustee. Typically, these questions involve confirmation of name, address, phone number, etc. They may also ask questions about assets that you have and whether you have listed any of your creditors. However, they may ask you questions about anything relating to your bankruptcy schedules or pertinent to your filing bankruptcy.
How should I answer the questions the Trustee asks?
Honestly and briefly. Do not give your entire life story if you are asked for a “yes” or “no” answer, just answer “yes” or “no.” Answer the question and do not offer more than what you have been asked!
When will I receive my discharge?
The Debtor will typically receive a Notice of Discharge about sixty days after the 341 hearing. This notice does not come from your attorney’s office. It is an order from the United States Bankruptcy Court indicating your debts have been discharged, meaning the creditors can no longer pursue you for the debts. The debts that were eliminated in the bankruptcy are not individually listed on the discharge order; so don’t think something is wrong, or that all of your debts have not been wiped out, if you don’t see them on this form.
What debts are not dischargeable in bankruptcy?
Certain debts are not dischargeable in bankruptcy. These include:
What is bankruptcy fraud?
There are four primary types of bankruptcy fraud.
1) Actual Fraud: let’s say you fill out a loan application and lie, and say your income is $60,000 when you really only make $30,000. The creditor could say your debt was incurred through fraud meaning they relied on your false statement in making their decision to lend you money, and they may claim you cannot discharge this amount in bankruptcy.
2) Debts for Luxury Goods which cost more than $500.00, and were purchased within 90 days of filing. If you decide to buy a big screen television and then go bankrupt this plan will not work, and will be presumed to be fraudulent if done within 90 days.
This does not mean wait 91 days. After 90 days, there is no presumption, meaning the debtor does not have the burden to show it was not fraud. However, the creditor can still show actual fraud by proving the debtor did not intend or did not have the means to pay for the purchase. It is then on a case by case basis and the judge will decide. Do not think you are “home free” on day 91!
3) Cash advances in excess of $750.00 within 70 days. These are presumed fraudulent, meaning you as the debtor has the burden of proving that taking the money so close to filing the bankruptcy was not an intentional fraud.
4) Debts for Crimes like Embezzlement are considered fraud. This is where you are trusted with someone else’s money and you decide to use it for your own purposes. For example, you collect and are in control of money for a charity and then buy a new car for yourself. Theft is also considered a type of fraud under bankruptcy. Debts from any of these actions are considered fraud and may not be discharged in your bankruptcy filing.
What happens if I commit fraud?
First, you could be subject to criminal fines and potentially jail time! No joke. The creditors may also object to your bankruptcy discharge or seek dismissal of your case. You will also not be able to wipe out those debts if your are conclusively found to have committed fraud.
How else may my case get dismissed?
Your creditors may object to the discharge of your case or seek dismissal if you engage in certain inappropriate conduct or fail to comply with the bankruptcy process requirements. This means they ask the court to enter an order which basically nullifies your bankruptcy filing and allows your creditors to pursue you again as if you never filed.Typical examples include making false statements in your bankruptcy schedules, concealing property or assets of any kind, falsification, destruction, or refusal to produce documentation. It may also include an inexplicable loss of money or an asset. For example, you sell a house in February and make $50,000 off of the sale. You then file your bankruptcy two months later and can’t explain what happened to the money or have a lame explanation. The typical one used is claiming it was gambled. Believe me; the judges and trustees have heard this one before. Unless it is actually true and you can somehow prove it, do not make this claim. You may also receive an objection to our discharge if you transferred property just before filing.
What if I repaid a friend or family member money within one year of filing?
Repayments to friends or family members are considered insider transfers and are a big no, no. Therefore, you cannot take your $20,000 in cash in your bank account and then say, “Oh, I had to give that to my brother John because I happened to owe him $20,000.00.” Any repayments to friends or family members within one year are considered fraudulent. They will go after your friend or family member to get the money back!
What if I filed bankruptcy before?
There must be at least eight years from the earlier filing date to the later filing date. If you didn’t wait the eight years since you filed your last Chapter 7 bankruptcy than the case will be dismissed. Another thing to bare in mind is that the Trustee may also move to dismiss your bankruptcy which basically has the same affect of rendering your bankruptcy filing useless.
What if I miss my 341 meeting?
The most common reason for dismissal is failure to show up for your meeting of creditors. They may continue it one time if you miss your hearing but after that they will dismiss your case. Make sure you do not miss this meeting, it really makes the trustees angry sometimes. Also, if you have a lawyer, you may have to pay your attorney to attend the extra hearing.
What if I refuse to turn over an asset, like my tax refund?
Another common reason for dismissal is refusal to turn over an asset that is not protected by an exemption. For example, the Trustee finds out you have a jet ski that is not protected and you refuse to hand it over. The trustee will file a motion to dismiss your case.
What if the Trustee requests documentation and I do not respond?
Any noncompliance with a request of the Trustee such as for you to produce documentation, etc. may result in dismissal. If the Trustee or your attorney asks you for documentation, don’t put it on your “to do” list, just get it to them immediately.
Please keep in mind this is not legal advice, this is information which is accurate to the best of my knowledge as of the time it was produced. The information and even the laws may have changed by the time you are ready to file your own bankruptcy. The answers here are general in nature and the specific circumstances of your bankruptcy filing may require different results.