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Chapter 7 bankruptcy is remarkably powerful – and incredibly fast.
I’ve always said that it takes longer to decide to file for Chapter 7 bankruptcy than for the case to go through the court system.
For most of my clients, the decision-making process takes months of painstaking soul-searching.
First comes looking at options, then compiling documents and choosing the right lawyer.
Then it feels as if the world moves at double speed. Here’s what I mean.
First, The Meeting Of Creditors
Once the case is filed, the court assigns a date and time for the meeting of creditors. That’s anywhere from 30-45 days after the case is filed.
Then The Deadline To Object
Creditors, the trustee and other people impacted by your bankruptcy case have 60 days from the first date set for the meeting of creditors to object to the discharge or dischargeability of certain debts.
Assuming nobody asks for more time to object, we’re now at 105 days from the date of filing of your Chapter 7 bankruptcy case.
Meanwhile, You Tie Up Loose Ends
You do your financial management certification and make sure the certificate is filed with the court.
If you need to reaffirm a debt, you take care of that as well.
Perhaps you need to amend part of your bankruptcy papers. If so, that’s handled while you wait for the deadlines to run out.
Before You Know It …
The meeting of creditors is over, the deadline to object to discharge runs out, and the clerk processes your Discharge of Debtor.
The whole process can take as little as 4 months to be over and done with.
If the bankruptcy court is exceptionally busy then the clerk may not get around to processing your Discharge of Debtor right away, but it’s all a matter of time.
For the most part, a simple Chapter 7 bankruptcy case is over quickly. That gives you the opportunity to get on with your life right away.
Image credit: Alain Wibert
How Long It Takes To Complete Your Chapter 7 Bankruptcy Case was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Chapter 7 bankruptcy can help eliminate or wipe out debt obligations for qualifying debtors. When debt is eliminated it is known as a discharge. When this happens, many people think their case is finished. Well, not quite. While getting debt discharged is the primary goal for most filers, this isn’t the actual end of the [...]
A Wisconsin 128 debt amortization plan can be a great alternative to bankruptcy. Unlike a Chapter 7 bankruptcy, a chapter 128 provides fast and effective relief without the hassle of a means test or liquidation of your assets.
Advantages Over Bankruptcy:
1. Less Expensive.
2. Unlike bankruptcy, all debts do not have to be included in your 128 plan.
3. No assets or property are put in jeopardy.
4. Can file more than once.
5. Can file after bankruptcy.
6. Alternative to bankruptcy if you do not qualify under the new bankruptcy code.
7. Not as harmful on your credit report.
8. Faster process than bankruptcy.
How A Chapter 128 Can Help You:
* Stop Garnishments
* Stop Debt from Accruing Interest
* Pay Off Debt in 3 Years or Less
* No Court Appearances in Most Cases
Eligibility Requirements:
1. Adult Wisconsin Resident
2. Principal source of income consists of wages or salary
Once you have made the decision to file for bankruptcy you are likely to start hearing terms and phrases that you are not familiar with and that may be a bit confusing, but that are incredibly important to the administration of your case. Understanding these terms is key to being an active participant in your bankruptcy case rather than just sitting by and hoping that it goes well. By discussing these terms with a bankruptcy lawyer, clients will likely find themselves feeling more informed and confident regarding their decision to file for bankruptcy.
One term that you are likely to hear used relatively frequently during the process of your case is the phrase “bankruptcy estate”. Simply put, this term refers to all of the legal or equitable interests that are held in the form of property at the time that you filed your bankruptcy petition.
It is vital to realize that the wording is not “property that you own”, but rather, “property in which you hold interest”. This means that it is not necessary for you to own the property or even possess it in order for it to be included in the inventory of your bankruptcy estate.
Your bankruptcy attorney will also advise you that your bankruptcy estate will be used to make determinations regarding the type of bankruptcy, or Chapter, that would be appropriate for your specific situation. This means that the “bankruptcy estate” can impact whether you will be required to liquidate any assets (property that will be sold by the Trustee) or if your property is exempt from liquidation.
It is essential that you discuss your situation with an experience bankruptcy attorney as soon as you start thinking that it may be a good idea for you to file for bankruptcy protection. This way your attorney can help guide you through the entire process and ensure that everything is going well from beginning to final discharge. The earlier you start talking about your case, the earlier your finances can be straightened out.
A
t Second Chance Legal Services we often get the question: Can I keep my 401k if I file for bankruptcy protection? The answer to that question is fairly straight forward. As long as your 401k is a legitimate retirement plan that follows all IRS rules (most plans are extremely interested in compliance) your 401k is fully protected in both a Chapter 7 and Chapter 13 Bankruptcy. However, the follow up question is sometimes more difficult: What happens with my 401k loan when I file for bankruptcy.
First, this debt is non-dischargeable as it is in essence a debt to yourself. Failure to repay a 401k loan means that this “loan to yourself” becomes a “distribution” and can often lead to significant tax implications. Second, in a Chapter 13 bankruptcy you do have a general right to repay this indebtedness, and it is general in your best interest to do so. In a Chapter 7 bankruptcy you don’t have a right to schedule repayment of a 401k loan on your bankruptcy schedules. Therefore, this indebtedness cannot be used to help you qualify for a Chapter 7. However, if you qualify to file a Chapter 7, you may continue to make payments on your loan.
Ultimately the determination of whether an individual should maintain their payments on a 401k during the bankruptcy process should be a decision made after carefully reviewing their particular financial situation with a qualified bankruptcy attorney with experience with cases involving 401k loans.
Second Chance Legal Services is a bankruptcy law firm located in Madison Heights, MI. While we are located in Oakland County, we service Wayne, Oakland and Macomb County residents. As Detroit Bankruptcy Attorneys we specialize in helping individuals escape their burden of debt in order to get a fresh start on their bright future.
Because of our small size our clients get individual attention. You will have the same bankruptcy attorney throughout your case whether you are in a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy. Your attorney will help guide you through the bankruptcy process in order to help you get a successful discharge of your debt.
It is important to note that Macomb County Bankruptcy Attorneys, Oakland County Bankruptcy Attorneys and Wayne County Bankruptcy Attorneys all deal with the same judges and trustees. This is because all Michigan Bankruptcies are filed with the federal bankruptcy court in Detroit, MI. For this reason, it is important that you choose an attorney not by location but rather by how comfortable you feel with them when you meet. If you don’t feel comfortable with their knowledge, their experience or their demeanor you should seek out an attorney that you do feel comfortable with.
If you are interested in speaking with a Detroit bankruptcy attorney from Second Chance Legal Services, please contact our office at 248-629-6367 for a free initial consultation.
In the case of In re Eagle, ___ F.3d ___, 2007 WL 2278902 (C.A.8(Ark.)), the court held that under the circumstances the Chapter 7 Debtor did not have a constitutional right to counsel. The Debtor had filed a pro se Chapter 7 case. As the Debtor failed to file the necessary schedules and statements, the court dismissed his case. The court granted the Debtor's motion to reinstate his case and advised the Debtor to obtain counsel. In subsequent proceedings, the court sustained a Creditor's exemption objection. The Debtor appealed the order sustaining the exemption objection.
The Court of Appeals held that the Debtor did not have a right to counsel as his physical liberty was not at issue in the bankruptcy case. Lassiter v. Dep't of Soc. Servs. of Furham County, 452 U.S. 18 (1981). The court further noted that although it had no duty to do so, the court had advised the Debtor to obtain counsel.
The issue to use bankrutpcy estate funds to employ criminal counsel in a bankruptcy case was previously addressed in the Miami, Florida bankruptcy case of In re Duque, 48 B.R. 965 (DC Fla. 1984)(Hastings, J.). In this case involving an individual chapter 11 debtor, the District Court held that the Debtor did not under the circumstances have the right to use bankruptcy estate money to pay for his criminal counsel. The court set forth three underlying principles in its determination. First, the employment of special criminal counsel must be in the best interest of the estate. That is, there must be an actual need for the services based upon a actual not hypothetical or speculative threat to the estate or its property. Second, special criminal counsel must not be for the personal benefit of the debtor, but must be for the benefit of protecting the assets of the estate or furthering its interests. Third, potential violations of the debtor's constituational rights posed by criminal investigations or prosecutions occurring after the filing are of concern to the criminal forum and not the bankruptcy court.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
A creditors’ meeting is required under section 341 of the Bankruptcy Code. In simple terms, it is a meeting of the minds between the parties present at the meeting. The parties that will be present at the meeting will be you, the debtor; the debtor’s attorney, and a representative from the trustee’s office. If you+ Read MoreThe post Information About Debtor’s 341 Meeting of Creditors appeared first on David M. Siegel.
Once the meeting of creditors is over in your Chapter 7 bankruptcy case, you’re pretty much done.
You filed for Chapter 7 bankruptcy.
You went for your meeting of creditors.
The trustee closed the meeting.
Here are the loose ends you need to tie up.
If The Meeting Is Closed
If the bankruptcy trustee has no further questions and doesn’t need any other documents, your meeting will be closed. You won’t need to go back to court or appear again.
60 Days To Object To Discharge
Your creditors, the bankruptcy trustee, or anyone affected by your bankruptcy has 60 days from the first date of your meeting of creditors to object to the discharge of an individual debt. They can also opt to object to your bankruptcy discharge as a whole.
Usually, a creditor will let you know well in advance of that deadline if there’s a problem. They’ll send a letter trying to settle any issues, or perhaps just show up at the meeting of creditors.
If nobody shows up to the meeting of creditors or sends you a letter about a potential objection, you’re likely in good shape.
So, too, for the bankruptcy trustee. If there’s going to be a problem, you’ll most likely know about it in advance of the deadline.
File The Financial Management Certificate
Remember, you need to do your financial management certification before your bankruptcy discharge can be issued. Do the course and file the certificate or your case may close without a discharge.
File Reaffirmations
If you’re reaffirming a debt, be sure to get it signed and filed immediately. If it’s not filed before the discharge is entered, it’s not valid and binding.
Review Your Household Budget And Await Discharge
You’re on the verge of your bankruptcy discharge – what’s your life going to look like once it’s all done?
Now’s the time to figure out how to tackle any debts that won’t be wiped out in your Chapter 7 bankruptcy. It’s also a good idea to determine how you’ll allocate your household income to cover your expenses.
Planning for the future will help avoid a repeat of the past.
Image credit: Dougtone
What Happens After The Chapter 7 Bankruptcy Meeting Of Creditors was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Back in 2011, the nation was fixated on the trial of Casey Anthony, the Florida woman who was accused of killing her daughter. Ms. Anthony was, of course, acquitted of murder but her problems did not end there.Earlier this year, Ms. Anthony filed Chapter 7 bankruptcy, claiming that she owed over $800,000 to around 80 creditors and that she has no income. Among the creditors are her defense attorney – to whom she owes $500,000, and a defamation suit of an unknown amount filed by a former babysitter 1No doubt Ms. Anthony’s bankruptcy case will continue for months and months as she is likely to face litigation in the form of challenges to dischargeability from creditors. However, one issue has been resolved that is somewhat unusual for a bankruptcy case.The Chapter 7 trustee in the Anthony case filed a notice of intent to sell Ms. Anthony’s life story to generate funds for the bankruptcy estate. This meant that in the event that Ms. Anthony decided to write a tell-all book or contract with a movie studio to produce a movie, any proceeds would belong to the trustee.Ms. Anthony has stated that she has no intention of writing a book or cooperating with a film maker. However, she decided to make an offer to the trustee to “buy out” the bankruptcy estate’s interest in her life story. According to news reports, she paid the trustee $25,000 to reclaim her life story.Presumably a book or movie deal would net Ms. Anthony far more than $25,000 but the trustee concluded that the Anthony life story without the participation or cooperation of Ms. Anthony was not worth very much.Assuming that Ms. Anthony obtains her discharge or reaches a settlement with objecting creditors, it would not be surprising if she changes her mind about selling her story and neither the trustee nor any creditors would have a claim on that money.Obviously most people do not have a life story that would interest a book publisher or Hollywood. However, you can see from this case that trustees will negotiate on the sale of non-exempt assets. Generally trustees are more interested in quick cash than in litigating property valuation so if you are trying to retain your rights to real estate, a motor vehicle, equipment, or other asset, it always makes sense to negotiate a deal with your trustee.
- A Chapter 7 debtor can and should include all creditors and potential creditors even if the exact amount of the debt is unknown or not yet determined. If the Chapter 7 discharge goes through the pending claims will be extinguished. ↩
The post Unusual Asset Arises in Casey Anthony Bankruptcy Case appeared first on theBKBlog.
The case of Quartemont v. Commissioner, T.C. Summary Opinion 2007-19 (Jacobs, J.) illustrates the tax consequences of the settlement of debt at less than the full amount and specifically addresses the calculation of "insolvency" for the insolvency exception to the discharge of indebtedness income provision of the Internal Revenue Code. 26 U.S.C. 108. In this case, the taxpayers negotiated with their credit card companies to pay a lesser amount than what was owed instead of filing for bankruptcy relief. By their settlements with the credit card companies, they were able to cancel about $77,000 in debt. The I.R.S. determined that the $77,000 in cancelled debt was additional income.
The taxpayers claimed that the $77,000 in cancelled debt was not income based on the insolvency exception of 26 U.S.C. 108(a)(1)(B) which provides that gross income does not include any amount which would be includable in gross income by reason of the discharge of indebtedness if the discharge occurs when the taxpayer is insolvent.
The I.R.S. and the taxpayers did not agree on whether the taxpayers were insolvent at the time of the discharge of indebtedness. Insolvency is defined in section 108(d)(3) as the "excess of liabilities over the fair market value of assets." The taxpayers claimed that they were insolvent by arguing that their home should not count as an asset since it would be an exempt homestead in bankruptcy.
The tax court disagreed with the taxpayers and found that the calculation of insolvency does not exclude exempt assets. The court found that "assets" as used in section 108(d)(3) includes assets exempt from the claims of creditors under applicable state law.
The tax court noted that had the taxpayers filed for bankruptcy relief instead of reaching a settlement with their creditors, the discharged amount would not have been included in income as section 108(a)(1)(A) provides that gross income does not include any amount which would have been includable in gross income by reason of the discharge of indebtedness if the discharge occurs in a bankruptcy case.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
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