“Why do I need an Attorney if I have to do all the work to Prepare my Case?”

Posted on June 6, 2013 by

Often times, we hear from clients that they are seeking an attorney to prepare their bankruptcy petition so that they do not have to do any of the work themselves.  Due to the complex nature of the bankruptcy code, and the necessity of filling out the petition and schedules accurately, hiring an attorney to represent you for your bankruptcy filing is definitely worth your while.  However, many people are surprised by the amount of paperwork attorneys request to assist them with preparing the bankruptcy petition.  Your bankruptcy attorney will require the following from you to be able to prepare your bankruptcy petition:  the most recent six months of paycheck stubs, copies of your most recently filed Federal and State income tax returns, and information about your expenses, personal property (bank accounts, household items, cars, etc), and creditors you owe money to.  This information is usually provided to your attorney by filling out a questionnaire that comes in paper format or online format.  This leads many individuals to think, “why do I need an Attorney if I have to do all of the work to prepare my case?”

One of the main reasons your attorney will ask you to provide certain documentation and information is due to the requirements that your bankruptcy trustee has.  The trustee assigned to your case is in charge of the bankruptcy estate; any assets that you may have need to be listed on your petition so that your trustee can review them, and make sure you do not have any unexempt assets that need to be liquidated and distributed for the benefit of your creditors.  Your attorney can help you through this process by asking you questions to ensure your assets will be protected.  While you may feel like you are providing a lot of information to your attorney, it is only for your benefit.  Your attorney is just making sure that everything will go smoothly in your case, and in all cases, more information given is better than less.   Your trustee also requires copies of documents such as your paystubs, tax information, bank statements, and divorce decrees, so often times your attorney will request this documentation from you, not for their own purposes, but because your trustee will likely request to review them.

It is important to keep in mind that your attorney has no way of knowing personally what debt or property you have accumulated over time. While your attorney can run a credit report to get you started, there is still some work that goes into filing for bankruptcy.   Often times, things like medical bills and quick turn over loans, like payday loans, will not show up on your credit report.  Without providing that information to your attorney, your petition would not have a complete list of your creditors.  On the same note, while some things can be ascertained from viewing your credit report, your attorney will have no way of knowing about property that you have obtained over time.  You could have inherited an expensive piece of jewelry or an even larger piece of property like a house, and if you do not notify your attorney of this, your petition would not be complete.   This could pose problems with your case if it comes to the attention of your trustee that certain items were left out of your petition.

It is also important to remember that your bankruptcy petition has to be filled out the same way, whether you are represented by an attorney or not; even if you do not have an attorney representing you for the bankruptcy, you are held to the same standard as if you were.  If your petition is not filled out and filed accurately, your case can be dismissed by the court.  Generally, individuals filing for bankruptcy may not know that there are several forms, schedules, and statements that must be filed to ensure your case will not be dismissed by the court.  However, your attorney will know these things, and will be able to ensure that your case is filed appropriately.

Overall, while it may feel like you are providing a large amount of information to your attorney, it is truly only for your benefit.  Your attorney will only ask questions that are relevant to your case, and this is to ensure your case is filed the correct way the first time.  The risk that you take of issues occurring with your case by not hiring an attorney to assist you with your petition far outweighs the amount of work you need to do to help your attorney prepare your case.  The work required is certainly worth being able to get rid of your debt and start fresh!  Contact your St. Louis Bankruptcy Attorney today!

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy | Comments Off on “Why do I need an Attorney if I have to do all the work to Prepare my Case?”

What Happens to my Credit Cards when I file for Bankruptcy?

Posted on May 24, 2013 by

Many individuals who are planning on filing for bankruptcy wonder what will happen to their credit cards when they actually file.  The answer to this question depends on the status of the credit card that you have at the time of filing.  Typically, credit cards fall into one of three categories including cards that have a zero balance, cards that have a balance, but payments are current, and cards that have a balance that are in default.

Cards that have a zero Balance:

When listing creditors on your bankruptcy petition, you must list all of your creditors, meaning people that you owe money to.  Unfortunately, you are not able to exclude some creditors while listing others.  However, if you have a credit card with a zero balance, meaning you do not owe them any money, you do NOT have to list them on your bankruptcy petition.  Because you do not have to list these creditors, this means that you may be able to come out of your chapter 7 or chapter 13 bankruptcy with the credit card.  There are exceptions to this depending on the creditor, though.  Some, if they find out about the bankruptcy, may cancel the card upon discovering that you filed for bankruptcy.  Many credit card companies constantly monitor their customer’s credit reports.  They could also cancel the card, even if it has a zero balance, due to the risk they feel they may take by allowing the card to be open.  Many credit card companies allow you to keep your credit card open after filing for bankruptcy if it had a zero balance at the time of filing.

Cards that have a balance, but current payment history:

If you owe a credit card money, even if you are not behind on payments, the company will usually close the account you have with them, and any additional accounts.  If you wish to keep the card, you can contact the company to learn what their policy is regarding bankruptcy; however, without any sort of written agreement to repay what you owe the creditor, they will most likely close your account.  Additionally, it is generally not recommended that you agree to pay unsecured debts (such as a credit card) post filing for bankruptcy.  The point of filing for bankruptcy is to get a fresh start post filing, and agreeing to take on old debt afterwards is not to your benefit.

Cards that have a balance and do not have a current payment history:

If you owe a creditor money are not current with your monthly payments to them, when you file for bankruptcy they will close your account.  If you also happen to bank with the same company, they can freeze or close your bank account as well.  If the company freezes your account at the time of filing, they can access the funds in your account to offset the amount you owe them, so it is very important to inform your attorney about these sorts of situations prior to filing for bankruptcy.

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy | Comments Off on What Happens to my Credit Cards when I file for Bankruptcy?

Discharge of Debt

Posted on May 24, 2013 by

An individual can receive a discharge of debt they owe by filing for Chapter 7 or Chapter 13 bankruptcy.  A “Discharge of Debt” releases an individual’s personal liability for many types of unsecured debts, meaning they will no longer owe for debts they previously had.  It also prevents creditors from making any collection efforts toward the debtor, including phone calls, letters, and various threats.  Types of unsecured debts that can be discharged include credit card debt, medical bills, personal loans, payday loans, and vehicle or mortgage deficiencies (from property that has already been repossessed or foreclosed).  There are types of unsecured debts, though, that cannot be discharged through filing for bankruptcy.  These types of debts include certain tax liabilities, student loans, domestic support obligations (child support, alimony), financial responsibility for any injuries caused while driving under the influence of drugs and/or alcohol, and certain debts owed to governmental agencies.  Additionally, if a creditor has received a judicial lien on your property, the lien will also not automatically be discharged by the bankruptcy.  If a debt is not discharged, the individual is still responsible for the debt that is owed post filing.

Discharge of debt varies slightly between chapter 7 and Chapter 13 bankruptcy filings. In a chapter 7, creditors are given notice of the proceedings and are given a certain amount of time to object to the discharge of their debt.  If no objections are received by the court, the debt is typically discharged automatically.  The court also has certain requirements and regulations for discharge and may dismiss a case if the requirements are not met in a timely manner.  Some of the requirements of the court are that the individual provide tax documents and complete a course on financial management. The court may also dismiss a case without discharge for any type of fraud, concealment, or failure to account for assets.

In a Chapter 13 Bankruptcy discharge of debt occurs when the reorganization plan is paid in full.  In Chapter 13 filings, creditors are given the opportunity to object at the Chapter 13 plan confirmation hearing.  Creditors may not object to the discharge of debts upon the completion of payments under the plan.It is important to note that in Chapter 7 proceedings the court may revoke a discharge under limited circumstances.  The grounds for a revocation closely resemble the grounds of the court to dismiss the case without discharge, including fraud or concealment.  In a Chapter 13 filing the court may revoke either confirmation or the discharge of the plan due to fraud.

After your debt is discharged creditors are not legally allowed to attempt to collect money from an individual for a discharged debt.  Should a creditor attempt to collect discharged debt, a motion can be filed with the court to reopen the case to address the creditor.  The court may file sanctions against creditors for violating a discharge order.

Though a creditor may not attempt to collect a discharged debt, you may opt to voluntarily pay the amount that was discharged.  It is imperative to note that this may only be done after a final order has been issued and the bankruptcy is complete.  This most often occurs when the relationship between the parties is of personal importance to the individual, for example, if debts to family or friends were discharged.

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Collection Harassment, Discharge of Debt, Judgement Liens, Medical Bills and Bankruptcy | Comments Off on Discharge of Debt

Options for Secured Property in Bankruptcy

Posted on May 2, 2013 by

When filing for bankruptcy, there are several options to consider regarding secured property.  Secured property is any property that you have placed as collateral for a loan; typical examples of this type of property would be cars and houses, but this could also include things like financing furniture or household goods, like electronics.  With this type of property, a debtor has a few different options through a bankruptcy; he or she can choose to surrender the property, reaffirm the debt, or to redeem the collateral.  Each of these options have advantages and disadvantages depending on the debtor’s specific situation.   Here, we will focus on the basics of each option.

One of the options for secured debt through a bankruptcy is to surrender the collateral.  In order to keep a secured debt, such as a house or car, you have to pay the loan balance in some way.  However, if you are unable to pay for the property anymore, and you want to start over fresh, you can surrender the property through the bankruptcy.  When you surrender the property, you are no longer liable for the loan balance on the property.  While you will no longer have the property to use, it is a good option for those who are in over their heads with payments, or those who are behind on payments.  Surrendering the property gives you a chance to walk away from the loan free and clear.

Another option for secured debts is to reaffirm the debt.  This is a popular option for individuals who are current on their secured loan payments and want to keep their property post-filing.  Reaffirming the debt basically means that you are agreeing to abide by the original terms of your loan, and continue making payments on the loan balance as if the bankruptcy never happened.  This option not only allows you to keep your property, but it also can help you build your credit post-filing.  However, while this can be a good option for those who wish to keep property, it is imperative to be sure you are able to continue making payments on the loan on time and through the entire life of the loan before signing a reaffirmation agreement.  If you default on a reaffirmed debt, you will be liable for the loan balance.

A final option debtors have concerning secured debts is redeeming the property.  Redemption means that a debtor will make a one time, lump sum payment to the creditor in the amount of the secured portion of the debt.  The secured portion of the debt is determined by evaluating the fair market value of the property, since that is the only portion that is secured.  When a loan is worth more than the fair market value of the collateral, a creditor is under-secured and can only recover for the secured amount. This means if you owe the creditor $15,000 on a car that is only worth $10,000, if you stopped paying the loan and they repossessed your car, they wouldn’t be able to sell the collateral for the full loan balance.   However, when redeeming the property, you can discharge the unsecure portion of the loan through the bankruptcy.  You can determine what the unsecured portion is by subtracting the fair market value from the loan value.  So, if your loan balance is $15,000, you would subtract the fair market value of $10,000, and the balance left over from that is the amount that would be able to be discharged through the bankruptcy.  Then, to redeem the property, you would have to make a payment of $10,000 to the creditor to redeem the property.

As mentioned previously, each of the options has certain advantages and disadvantages, and the best option for a specific debtor will depend on his or her particular situation.  The advantage of surrendering property is that you can walk away from a potentially large loan balance (such as a mortgage) free and clear; however the disadvantage is that you have to give the property up to the creditor.  Reaffirming property will allow you to keep secured property, continue making payments on it, and rebuild your credit; however, if you default on the loan at any point before the loan is paid in full, you will be liable for paying the deficiency. The advantage to redeeming property is that a debtor can keep then keep the property, will own the property free and clear of encumbrances, and will not have any ongoing payments on the collateral.  Of course, this option does require a debtor to make a lump sum payment, which may not be possible for all debtors.

If you still have questions on how you should treat your secured debt, contact your St. Louis Bankruptcy Attorney today to discuss the available options.

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Discharge of Debt, Reaffirmation Agreements, Redeeming Property, Secured Property, Surrendering Property | Comments Off on Options for Secured Property in Bankruptcy

What if I do not know who my Creditors are?

Posted on May 2, 2013 by

When preparing to file for bankruptcy, your St. Louis Bankruptcy attorney will stress to you the importance of listing all of your creditors on your bankruptcy petition.  This step in the bankruptcy process is extremely important, because listing the creditors on your petition is how they receive notice of your bankruptcy, and know to stop contacting you, or even harassing you, for collection.  However, often, debtors are faced with the issue that they do not know who all of their creditors are.  This is something that is very common, especially with a creditor’s ability to sell your debt to a different company or send it to collections and write it off.  So, what do you do if you do not know who all of your creditors are? Below are a few steps that you can take:

1. Run your credit reports, or have your attorney run it for you.  This option works best when you pull from all three credit bureaus (Equifax, TransUnion, Experian).  While there is sometimes a fee to do this option, it ensures that most, if not all, of your creditors will be listed on your petition.  Sometimes very new bills, or medical bills, will not show up on your credit report (many hospitals do not report to credit bureaus), so it is important to check your credit report to make sure everyone is listed.

2.  Hold onto bills, letters, etc, that you receive in the mail.   This is a good option if you know you have medical bills or other creditors that are not appearing on your credit report.

3.  Write down creditor information from Collections calls.  If you are receiving phone calls from various creditors who are stating that you owe them money, make sure to write down their names, and collect as much information from them as you can.

When collecting information from your creditors, you will want to make sure to receive their name, their address, your account number, the amount you owe them, the date the debt was incurred, and what the debt was from (credit card, medical bill, collections, etc).

If your case is filed, and you find more creditors after then, you do not have to pay those creditors.  If your bankruptcy case is still open, you may have to pay a fee to the court to amend your bankruptcy petition and add the creditor to your bankruptcy, but the creditor would still be discharged through the bankruptcy (assuming the debt is eligible to be discharged).

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Uncategorized | Comments Off on What if I do not know who my Creditors are?

Will Bankruptcy Protect you from an Eviction?

Posted on May 2, 2013 by

Debtors who are facing an eviction could receive protection from the eviction process by filing for bankruptcy; however, this protection is dependent on how far in the eviction process your landlord is when the bankruptcy is filed.  Whether an eviction judgment has been obtained by the landlord makes all the difference in whether a bankruptcy filing will hold off the proceedings.  If you are behind on rent payments when you file for bankruptcy, it is likely that your landlord may have already filed an action in state court against you to evict you.   If the landlord already has a judgment for possession of the apartment (or property) when you file for bankruptcy, the automatic stay protection you would normally receive by filing for bankruptcy will not help you. The landlord is entitled to proceed with the eviction just as if the bankruptcy was never filed.   However, if you file for bankruptcy BEFORE the court issues a judgment for possession, the automatic stay provided by the bankruptcy will prohibit the landlord from trying to evict you for being behind on rent payments prior to filing.

The only way that the landlord would be able to evict you post filing for bankruptcy would be to file a motion for relief from automatic stay with the bankruptcy court.  The landlord can ask the court to lift the automatic stay to begin or continue eviction on any grounds. Although the automatic stay is automatically applied by filing for bankruptcy, unless the landlord already has a judgment, the Judge can also lift the automatic stay upon landlord’s request. Given that the tenancy in the property is not something that is part of the bankruptcy estate that the trustee can sell to pay your creditors, bankruptcy courts generally lean toward allowing landlords to exercise their property rights to protect their property regardless of the tenant’s debt problems.

An exemption to everything listed above is if the landlord is seeking an eviction because you endangered the property or engaged in illegal use of controlled substances on the property. In this situation, the landlord can evict you regardless of the status of the bankruptcy.  This is the case even after the bankruptcy filing date if the eviction is based on property endangerment or drug use.   Additionally, if you do not stay current on post-petition rent payments, the landlord is free to seek eviction on the post-filing rent payments.  This is why it is also important to stay current on your rent payments after you file for bankruptcy. Anything you owe that is incurred after you file for bankruptcy cannot be added to your bankruptcy.

It is important to note that if you are current on rent payments and you file Chapter 7 or Chapter 13, the bankruptcy should have no effect on your lease and tenancy. Although your landlord may not be comfortable with the idea that you filed for bankruptcy, they likely will not even find out about it. If you are current on your rent payments, you do not have to list the landlord as a creditor who would be entitled to notice of the proceedings.  They would not receive notice of your bankruptcy along with other creditors.

If you are facing an eviction, or have questions regarding bankruptcy, contact a St. Louis Bankruptcy attorney today!

Posted in Automatic Stay, Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy | Comments Off on Will Bankruptcy Protect you from an Eviction?

How Can I Keep My Tax Refund or Insurance Proceeds in a Chapter 13 Bankruptcy?

Posted on April 12, 2013 by

A Chapter 13 Bankruptcy typically lasts for a period of three to five years, and as we all know, a lot can change in that amount of time.  Over the course of three to five years, an individual may have major life changes, such as having children, getting married, needing to purchase a new vehicle, or maybe even needing to repair an old vehicle.  Typically for events such as these, individuals look to use their tax refunds to help pay for major expenses; however, in a chapter 13 bankruptcy, the Chapter 13 trustee requires you to turn over any lump sum of money to the bankruptcy estate.  The general rule is that if a debtor becomes entitled to any sum of money it must be turned over to the bankruptcy trustee to be distributed to creditors.  Common sources of money that need to be disclosed, and possibly turned over, include money or property from an inheritance, tax refunds, insurance proceeds, and so on.  As a rule of thumb, if you receive any money you should inform your attorney, so he or she can contact your trustee and disclose this information.   Typically, you are only allowed to keep a certain amount of your tax refund when you are in a chapter 13. The amount depends on when your case was filed and what the local rules were at the time.  To find out how much of your refund you are allowed to keep without a motion to retain, contact your St. Louis Bankruptcy attorney to find out.

If you want to keep the money that you receive from one of the above listed sources, your attorney can help you by filing a motion with the court to retain the proceeds.  This will have to be submitted to the court and it is generally set on negative notice.  This means that your attorney will submit your motion to retain and if no one objects to the motion within 21 days you will be able to keep the money received.  Any number of people may object, including the trustee and/or one of your creditors.

If you would like to retain your tax refund and/or insurance proceeds, your attorney will need a number of things to prepare your motion to retain.  If you are attempting to keep insurance proceeds from a car accident, for example, your attorney will need to know how much money you will be receiving for the property.  If the property is not a total loss and just needs repairs, your attorney will need to know the estimated cost of repairs.  It is best if you can provide your attorney with a written estimate from a qualified individual so your attorney can file this with the motion.  If the property is a total lose (i.e. a vehicle that you are not keeping) your attorney will need to know how you intend to spend the money received.  Perhaps you need to replace your vehicle.  Again, it is best to provide written figures for how you will spend the money.  If you would like to purchase a new car with a loan, your attorney will also need to submit a motion to incur debt.  It is important to note that if you receive insurance proceeds for property, i.e. a vehicle, and there is a total loss, any existing loan balance has to be paid off before any funds would be released to you if your motion to retain is successful.

Similar to the process for retaining insurance proceeds, if a debtor in a Chapter 13 bankruptcy is wanting to keep all or most of their tax refund, a motion to retain will have to be submitted with the court.  Your attorney will need copies of your recently filed Income Tax Return in order to determine the full refund amount you are expecting to receive.  He or she will then also need written estimates from qualified individuals for the things you wish to keep your refund for.

Once your motion to retain is prepared and filed with the court, please keep in mind that this process will take time.  The motion will be submitted and it will be at least 21 days before a decision is made. From there your attorney will have to submit an order and the judge will need to sign the motion. Once this happens, your attorney will contact you to let you know the result of the motion (if it was granted or denied, and what that means).

If you choose not to inform your attorney regarding a motion to retain, and spend your insurance proceed or tax refund, it could result in the dismissal of your case.  Your attorney can attempt to file a motion to ratify in an attempt to get late approval of your spending the proceeds; however, there is no guarantee that this will be approved with the court.  If your motion to ratify is not granted, you will then be responsible for paying back the trustee the amount you spent.  Because of this, it is very important to contact your St. Louis Bankruptcy attorney before spending any lump sum of money.

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Settlements and claims, Taxes, Uncategorized | Comments Off on How Can I Keep My Tax Refund or Insurance Proceeds in a Chapter 13 Bankruptcy?

Why do I have to Complete Pre-Filing and Pre-Discharge Courses?

Posted on April 11, 2013 by

Before your bankruptcy petition can be filed with the United States Bankruptcy Court, you must complete something called a “Credit Counseling Certificate”.  A Credit Counseling Certificate is a course that a debtor can complete either online, over the phone, or through the mail, and it typically takes about 30-45 minutes depending on where you are getting the certificate from, and which way you are completing it.  The agency you receive your credit counseling certificate from must be approved by the U.S. Trustee; if you are unsure of which agencies are approved, your attorney can assist you with finding an approved course.  Costs for credit counseling certificates range from $10.95-$50.00, and typically require payment in the form of a debit card or pre-paid card.  The courses offered online are typically much cheaper that the courses offered over the phone.  The online courses can also be done at any time, whereas the courses offered over the phone are scheduled, and may not be as convenient for you.  The purpose of a credit counseling course was designed to give debtors an idea of whether or not they need to file for bankruptcy, or whether a payment plan with creditors would be feasible to help get you bank on your feet.  However, even if it is obvious that a repayment plan will not work for your situation, a credit counseling course is still required.  Typically, a repayment plan will not work for individuals who have very high debt and low income, or for individuals who are facing balances on debts with very high interest rates and penalties.  While a credit counseling course may suggest that you could benefit from a repayment plan, you do not need to follow the counseling’s recommendation.  The requirement is only that you complete the course, not that you follow the suggestion of the course.

Once your case has been filed with the court, you are then required to take an approved financial management course.  You must complete this course and have it filed with the court prior to receiving your discharge.  Like the Certificate of Credit Counseling, the Financial Management course must be completed within 45 days after the date on which the meeting of creditors was scheduled.  If you do not complete this course within that time frame, the court may close your case without a discharge.  This means that you would have to pay attorney fees and court costs to reopen your case so that they certificate can be filed, and you can receive your discharge.

Please contact a St. Louis Bankruptcy attorney today if you would like to know more information about the bankruptcy process!

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Discharge of Debt | Comments Off on Why do I have to Complete Pre-Filing and Pre-Discharge Courses?

Do you have to List Every Creditor you Have on Your Bankruptcy Petition?

Posted on April 11, 2013 by

When preparing to file for bankruptcy, people often wonder which creditors they are supposed to list on their petitions, and which ones they should leave out.  This confusion often comes from individuals assuming that if a debt cannot be discharged it does not need to be listed; they often think, “why bother listing it?”  However, when listing creditors for your bankruptcy petition, you almost always want to list every single creditor you have, regardless of if it will be able to be discharged through the bankruptcy or not.  The only exception to this rule would be if you do not owe the creditor anything anymore, or have a zero balance with them.  (*If you have several accounts with zero balances on them that appear on your credit report, you may want to consider closing these accounts out.  It will help to prevent any fees, clean up your credit, and be a good first step toward rebuilding your credit).

Making sure to list every creditor you have on your bankruptcy petition is a very important step in the bankruptcy process.  When listing these creditors, it is imperative that you provide the creditor’s name and correct mailing address.  This will ensure that your creditor receives notice of your bankruptcy filing.  When a creditor receives notice of your bankruptcy, they must stop contacting you immediately. This will provide you, as the debtor, much needed relief from harassing collection efforts.  In addition to the creditor’s name and address, it is also important to list your account number with them, the date you incurred the debt, and the amount you owe them as well.  This will assist your creditor with making sure they are not contacting you regarding your specific account, and can help your attorney assist with ensuring this as well.

If you happen to miss one of your creditors, and file your petition without including them, this will only be an issue if you are in a Chapter 7 case that has an asset that is going to be disbursed.  If this happens, you can include the creditor for an additional charge. Typically, you would have to pay just a court cost charge; however, this is something to discuss with your attorney.  If you are a “No Asset Chapter 7”, meaning you do not have any assets that are going to be disbursed to your creditors, and you do not include the creditor, the debt will still be discharged.  (*NOTE: this is true in the Eastern District of Missouri; it may be different in another district. Check with your local bankruptcy attorney to verify the local rules in your district).

If you have questions about which of your creditors should be listed, contact your local St. Louis Bankruptcy Attorney today!

Posted in Automatic Stay, Bankruptcy filing, Bankruptcy General, Chapter 7 Bankruptcy, Collection Harassment, Discharge of Debt | Comments Off on Do you have to List Every Creditor you Have on Your Bankruptcy Petition?

Transferring Property Prior to Filing

Posted on March 29, 2013 by

Certain types of activities that you do prior to filing can render you ineligible to file bankruptcy for a period of time.  If you sell or gift any type of property the 2 years before filing for bankruptcy, it is very heavily scrutinized in bankruptcy.  The reason these transfers are so scrutinized is due the amount of people who have attempted to cheat the bankruptcy system in the past.  Essentially, the issue with transferring property that arose (and is still an issue) was that many people are tempted to “gift” a large asset to a friend immediately before filing to avoid it from being taken by the trustee through the bankruptcy to sell it for the benefit of the creditors.   These transactions usually take the form of a person selling a house or a car for a very small amount, such as $5.00, knowing that once the bankruptcy is over,  the family member or friend will simply give the property back.  Any transfer or sale of property for substantially less than what the property is worth are often considered fraudulent by the bankruptcy court, and can lead to the dismissal of your case.  Even if you transferred the property in good faith, perhaps at a time when finances were in order, the trustee can still order that the person to whom you transferred the property give it back to sell to benefit creditors.  While this may seem unfair, it is still something that the trustee has the power to do, as set forth by the bankruptcy code.

After meeting with an attorney and finding out about this portion of the bankruptcy code, you may be tempted to undo the transfer by taking the property back; however, the trustee can see title transfers by a simple, routine check.  If the trustee sees that you are trying to right this wrong, they can still assume that you are being deceitful.  If you have transferred property in the 2 years leading up to filing, it is a good option to wait until the full 2 year period is up before you file a case.   This way, if you are asking if you have transferred property in the past two years (which is required by the “statement of financial affairs”), you can honestly answer “No”.  If you decide that you do not want to wait to file until the 2 year period is up, it is essential that you discuss with your attorney the consequences of this decision.

If you have questions about property that you have transferred and how it could affect your bankruptcy, please contact a St. Louis Bankruptcy Attorney today!

Posted in Bankruptcy filing, Bankruptcy General, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Protected Assets, Uncategorized | Comments Off on Transferring Property Prior to Filing