102 thing you need to know_34

102 thing you need to know_34

102 Things YouNeed to KnowBefore You FileBankruptcyWritten and Published byVictoria Ring, Bankruptcy ParalegalColumbus, Ohio USAemail: bankruptcy@columbus.rr.comwebsite: http://www.victoriaring.com/bankruptcy/ An Important Message to the Readers:This free ebook provides information and general advice about the law from the knowledge andviewpoint of a bankruptcy paralegal. However, laws and procedures change frequently, andthey can be interpreted differently by different people. For specific advice geared to your par-ticular financial situation, consult an expert. No book, software, or other published material is asubstitute for personalized advice from a knowledgeable attorney licensed to practice law inyour state.Copyright © January 2001 by Victoria Ring. ALL RIGHTS RESERVED. No part of this publica-tion may be reproduced, stored in a retrieval system, or transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording or otherwise for sale or profit, withoutprior written permission of Victoria Ring. Printing of this publication from the internet downloadversion is permitted for private viewing only. TABLE OF CONTENTSPageBankruptcy To Go Kit . aOverview aFree Forms Included bPaid Services . bGuidelines 1How Filing Bankruptcy Can Help You 1Terms You Need to Know Concerning Bankruptcy 2Chapter 7 Bankruptcy 3Steps That Occur in Filing a Chapter 7 Bankruptcy . 4Chapter 13 Bankruptcy 5Steps That Occur in Filing a Chapter 13 Bankruptcy . 5Changes in Payments During a Chapter 13 Bankruptcy 7Chapter 11 Bankruptcy 7Rules that Apply to All Forms of Bankruptcy 7Debts That Cannot be Discharged . 8The First Steps to Filing a Bankruptcy Petition 8How Your Credit Will be Effected by Bankruptcy . 10Other General Questions and Answers 10Websites to Help you Learn More About Bankruptcy . 13Information-Gathering Forms for the preparation of Your Bankruptcy Petition 14General Information . 1Debt Sheet 2Income History 3Monthly Budget . 4Asset Checklist 5Duty to Disclose All Assets 13Duty to Disclose All Creditors 14Agreement . 15Additional Documents Needed to File Petition 16 Bankruptcy To Go KitThis file that you recently downloadedfrom the internet is a complete ebookdedicated to helping the following typesof people:(a) Consumers -- people who areinterested in learning more aboutbankruptcy and/or interested in filingtheir own bankruptcy and saving $100’sof dollars in attorney fees.(b) Paralegals -- legal professionalswith an attorney/boss who is consider-ing offering bankruptcy services toclients.(c) Attorneys -- legal professionalswho do not normally offer bankruptcyservices to clients, but are interested instarting. The forms included in this“Bankruptcy To Go Kit” can be printedand used in the office as master forms.OverviewThank you for downloading this freebook from the website located at http://www.victoriaring.com/bankruptcy/book01.doc. This book is written by aVictoria Ring, a bankruptcy paralegal,who is well aware of the confusion andmultitude of questions that surround thesubject of bankruptcy. Her experienceof working with 100’s of clients filingbankruptcy in the Columbus, Ohio areahas awarded her the ability to knowwhat consumers really think and wantto know about this subject as well as allthe steps they need to take in order tofile.For instance, Matt down the street comesby one day to tell you how he filed bank-ruptcy last week and purchased a new carthis week. However, your brotherMarshall filed bankruptcy last year and hiscredit has been ruined ever since.Marshall can’t even get a check-cashingcard at his bank. What happened? Whatdid Matt do that Marshall didn’t? Will thesame thing happen to you?And what about when Debbie filed bank-ruptcy because her husband died and thehousehold income was reduced? Whenshe filed bankruptcy they came and tookher home away! Of course there is no wayyou would want that to happen to you.You don’t want to lose your home, car andfurniture just because you decide to filebankruptcy.Stories like these are certainly not unique.All of these same fears surround almosteveryone when they are thinking aboutfiling bankruptcy for the first time. Fear ofthe unknown is a natural reaction forhuman beings. However, this is preciselythe reason why this book was written. It iswritten to take the fear out of filing bank-ruptcy, but most importantly, it will educateyou so you can make a more informeddecision about whether filing bankruptcy isin your best interest or not.Filing bankruptcy is not necessarily foreverybody, as you will soon see; and afterreading this ebook, you will be in a betterposition to make an educated decisionabout your present financial condition. Ifyou decide to go ahead with the processof filing bankruptcy, at least you will knowwhat to expect after reading this ebook.102 Things You Need to KnowBefore Filing Bankruptcy Free Forms IncludedBeginning on Page 14 of this ebook, avariety of forms are provided for you toprint out, fill out and mail in at yourconvenience if you decide you want tofile your own bankruptcy. Or, if you arean attorney, you can print out theforms, remove my name from themand use them for your own office.I personally designed these forms forthe two bankruptcy attorney’s that Iwas employed with. At the time I hiredat the law firm, they were still using old1960’s style forms. Because thebankruptcy laws had changed sodramatically, when we did intakeinterviews with clients, we had to writeadditional information on the side,bottom and back of the old 1960’sforms to have enough information toprepare the bankruptcy petition.After several months of using theseold, outdated forms I figured out thebest way to update them. I sat downone day and re-designed the forms toinclude virtually every piece of informa-tion needed for the paralegal to pre-pare a well-presented bankruptcypetition to the Bankruptcy Court.However, the forms were not perfectthe first time out. We had to put themthrough actual office use and work the“bugs out” before they were perfect.So be assured, the forms included inthis Bankruptcy-To-Go Ebook Packagehave been previously tested by a lawfirm that does nothing but specialize infiling bankruptcy petitions.Paid ServicesIf, after reading this ebook, you shouldcontemplate filing bankruptcy, print outthe forms and start filling them out.Even if you decide not to file bank-ruptcy right now, you will have pertinentand important information gathered to helpyou access your financial situation. Also, ifyou should hire an attorney to file yourbankruptcy petition, the forms will alreadybe ready to hand to the attorney. He/Shewill greatly appreciate your preparednessand it will be quicker to process yourbankruptcy petition.However, if you want to save $100’s inattorney fees, I can personally prepare youa Chapter 7 or Chapter 13 bankruptcy andsubmit it as a “non-attorney preparer.” (Itis legal in all 50 states to file your ownbankruptcy with or without an attorney.) Iwill prepare your petition for $89.95 andsend it back to you through the mail. Youthen take the papers and file them in court,attend your 5-10 minute 341 Hearing inabout 6 weeks and confirmation hearingwhich takes 2-3 minutes. It’s a simpleprocess, which I will walk you through ifyou decide to us my services.But . let’s read on to discover those 102things you need to know before filingbankruptcy. That’s why you downloadedthis ebook for in the first place, right?My best to you,Victoria RingVictoria RingBankruptcy Paralegal GuidelinesIf you are considering filing for bank-ruptcy, you are not alone. Many peoplehave and will continue to file for bank-ruptcy based upon the times withcorporate layoffs, downsizing andcontinuing business failures. Althoughnot inclusive, the general guidelinesbelow will help you determine if youshould consider filing bankruptcy.1. You should file for bankruptcywhen you cannot reasonably pay yourbills.2. If your income does not suffi-ciently pay off or pay down your bills,it’s time to consider bankruptcy.3. If your monthly debt is 1.5 timesyour monthly income. For example, ifyou have a monthly net income of$2,800 but your monthly expenses areabout $4,200, it’s time to think aboutbankruptcy.4. If you cannot budget yourself outof the debt within four years, it’s time toseriously consider bankruptcy.5. If you are more than two monthslate on your bills, bankruptcy may be aconsideration.6. If your loan or mortgage has been“called” or accelerated, it’s time toseriously consider bankruptcy.7. If you get a foreclosure noticefrom the bank or a lender; it’s time toseriously consider bankruptcy.8. If you have withdrawn from yoursavings account for two months; bank-ruptcy may be a consideration.9. If you are depressed about yourfinancial situation, it may be time to con-sider bankruptcy.10. If you have a severe financial set-back such as the loss of a job, majorsurgery without medical insurance, etc., it’stime to seriously consider bankruptcy.Generally, people filing for bankruptcy aredealing with the following situations:• Loss of their job or their primarymeans of support;• Been laid off from their job;• Been demoted or given a significantpay cut;• Experienced major family problemsleading to divorce, child custody or separa-tion;• Excessive major credit card prob-lems;• Catastrophic medical-doctor billsfrom an uninsured major surgery or illnesssuch as terminal cancer;• Desperate financial situations withlittle hope.How Filing Bankruptcy Can Help You11. Filing bankruptcy is as simple astaking a set of papers down to the Bank-ruptcy court, standing in line at the Clerk ofCourt, paying a filing fee and having thepapers date/time stamped and handedback to you. (The court keeps the origi-nal.) A Judge will also be assigned at thistime. This simple process takes about 10“102 Things You Need to Know Before You File Bankruptcy”Page 1 minutes to complete. This set ofpapers that you filed with the court iscalled a “bankruptcy petition.” Themoment the Clerk of Court stampsyour bankruptcy petition, the followinggood things can happen to you:12. Anybody you owe cannot contactyou in any way (once they receivenotice in the mail from the court.)13. Any wage garnishments takenout of your check will cease to belawful. If the garnishment is taken outof your check after you file bankruptcyyou may be entitled to a refund.14. Any foreclosure action on yourhome or other real property is stopped.15. Any Sheriff’s sales are stoppedimmediately.16. Any taxes you owe that arecurrently being collected on by thegovernment are put on hold (while yourdebts are being reorganized.)17. Anybody coming to repossess yourauto, boat, furniture, appliances, or any-thing else are stopped immediately andcannot remove anything without theBankruptcy Court’s permission.Terms You Need to KnowConcerning Bankruptcy18.Creditor — This is the person orcompany you owe money to becausethey extended credit to you.19. Debtor — This is YOU. You owedebts, so you are a debtor.20.Secured Debt — This is a debt youowe for an item that could be taken awayfrom you if you don’t pay the bill. Forinstance, if you don’t make your housepayment, the creditor (or bank) you owecan repossess your house.21. Unsecured Debt — This is a debtyou owe for something that cannot betaken from you. For instance, anything youcharge on a credit card is an “unsecureddebt.” If you don’t pay the MasterCard billthis month, they cannot come and takewhatever you bought with the credit card.All they can do is harass you on the tele-phone until you pay the bill, turn the billover to a collection agency, or attempt toget a judgement against you (dependingon the amount you owe them.)22.Asset — This is something you ownthat has resale value. Your car, TV set,computer, stocks, bonds, bank accounts,piggy bank, clothes, bed, etc. are all thingsthat have some type of value that could beturned into cash. These types of thingsare your assets.23. Discharge — This is what happenswhen your debts are erased and you havecompleted your bankruptcy.24. Exemption — There are exemptionallowances allowed by the BankruptcyCourt to protect the assets you own thatyou need to keep in order to live a normallife. For instance, you need a house to livein, a car to drive, transportation to maintainthe car, clothes to wear, medicine refills,personal care items, etc. The law allowsyou to keep these types of items by allow-ing you exemptions on them. Whenanything you own is totally exempt from“102 Things You Need to Know Before You File Bankruptcy”Page 2 the bankruptcy, no one can take itaway from you.25.Automatic Stay — The momenta bankruptcy is filed, all creditor activityto collect debts, obtain judgments, orobtain property of a debtor to satisfy adebt is completed stopped. This is theprotection provided to you as a con-sumer under the Bankruptcy law in theUnited States.26. Relief From Stay — This is acourt order, requested by a creditor,who asks the court to lift the AutomaticStay that was immediately put in placewhen the debtor filed the bankruptcypetition. If a creditor is granted a Relieffrom Stay, the debtor will receive noticefrom the court of its existence and thebankruptcy attorney can prepare aMotion on the debtor’s behalf to re-quest the court to remove the Relieffrom Stay. (Of course, there must be alawful reason to do so.)27. Reaffirmation Agreement —This is what you file with the court ifyou decide to pay a creditor outsideyour bankruptcy. For example, youmay want to reaffirm with Bob’s AutoSales when you file your Chapter 7bankruptcy petition, because you wantto keep making payments on your carsince you need it to get back and forthfrom work.28. Trustee — This is a real “live”person that works for the BankruptcyCourt who normally oversees the entireprocess from beginning to end con-cerning your bankruptcy.29.Conversion — This is when youstart out by filing one chapter of bank-ruptcy and decide later to file anotherchapter. For example, you originally file aChapter 7 but decide to convert to aChapter 13.30.Dismissal — Among other things,your bankruptcy case can be dismissed atany time if you fail to comply to any rules,don’t turn over asset monies that arerequested by the Trustee or if you convertfrom one Chapter of bankruptcy to an-other. Your case is “discharged” if youcompletely pay off your Chapter 13 orwhen your Chapter 7 is legally finished.Chapter 7 Bankruptcy31. In order to be eligible to file a Chap-ter 7 bankruptcy, you must be able to meetthese guidelines:• You must reside or have a domi-cile, a place of business, or property in theUnited States.• You must not have received abankruptcy discharge within the last six (6)years or have had a bankruptcy casedismissed within the last 180 days.32. People who file a Chapter 7 bank-ruptcy do so in order to discharge theirdebts and get a “fresh start” in life. Thereare no income requirements to file aChapter 7 and people who file this type ofbankruptcy are those who can no longerafford to repay all their debts due to illness,unemployment, marital problems, unex-pected medical expenses, over-extendedcredit or other large expenses. However,not all debts can be discharged. For“102 Things You Need to Know Before You File Bankruptcy”Page 3 example, alimony, student loans, childsupport and taxes that are less than 3years old are non-dischargable andmust be repaid in full.33. Most consumers file a Chapter 7bankruptcy and then reaffirm on thedebts they want to continue paying. Forinstance, you can file a Chapter 7 andreaffirm on your house. This couldpossibly erase your other debts andyou would continue making your housepayments like you normally do now,outside the bankruptcy.(Note: There is pending legislationcurrently being debated in WashingtonD.C. to change this law, making itharder for people to file a Chapter 7and forcing them to file a Chapter 13,but the law has not been enacted as ofthe date this ebook is written.)Steps That Occur in Filing aChapter 7 Bankruptcy34. In order to be eligible to file aChapter 13 bankruptcy, you must beable to meet these guidelines:• Have a steady source of in-come so that you can make regularpayments to the Trustee.• The total amount of your debtscannot exceed $750,000.00 andunsecured debts cannot be more than$250,000.00.35. When your bankruptcy petition isprepared and signed by you, it is filedwith the Bankruptcy Court. You areassigned a case number and a Trusteeor “interim” Trustee. An interimTrustee is the person who is responsiblefor overseeing your bankruptcy until theMeeting of Creditors, at which time you willbe appointed a new Trustee or the interimTrustee will be assigned to your case.36. If you plan to reaffirm on a debt(which means you want to continue payingthe bill on your own after the bankruptcy isover), your attorney or paralegal needs tosubmit a Reaffirmation Agreement to thecreditor, obtain their signature and file thiswith the court. However, you can still paythe bill on your own without filing a Reaffir-mation Agreement; but it is best to file oneif the creditor you owe can repossesssomething you want to keep (i.e., car,house, TV, computer, tools, etc.).37. The Trustee will send a notice to allthe creditors (people/companies you owemoney to.) This notice is normally sent 5days after you file your petition.38. The court will normally send you anotice informing you that you are eligible tofile bankruptcy. You don’t have to doanything with this notice but keep it in yourpersonal file.39. The Trustee will then send all yourcreditors, including you, a notice informingyou of the hearing date when you shouldappear in court. This hearing is oftenreferred to as the “Meeting of Creditors.”40. At your Meeting of Creditors NOjudge will be present. The Trustee will askyou some of the same questions youanswered when you first filled out thepaperwork for the attorney or paralegal;who originally prepared your bankruptcypetition.“102 Things You Need to Know Before You File Bankruptcy”Page 4 41. In actual practice, creditors rarelyappear at these hearings; however, arepresentative from one of the compa-nies you owe, or a person you owe,may show up at this meeting. Theynormally only appear to ask where thesecure item is and if it is insured.42. If your bankruptcy case is a “noasset” Chapter 7 bankruptcy, themeeting will normally only last 5-10minutes.43. If your bankruptcy case is a “noasset” Chapter 7 bankruptcy; younormally will not have to appear incourt again. Essentially, you will re-ceive a discharge through the mail andall your allowed debts are forgiven.Chapter 13 Bankruptcy44. People who file a Chapter 13bankruptcy do so in order to keepproperty in which a creditor has a lien— like a house or car, or if paymentsare behind and the creditor is about toforeclose or repossess the property.The filing of a Chapter 13 will stop theforeclosure sale and allow the person 3to 5 years to repay some, but not all oftheir debts. Rather than wiping out alltheir debts in a Chapter 7 proceeding,Chapter 13 allows a person to reorga-nize and pay a certain percentage oftheir debts over a period of 3 to 5years. The unpaid balance is dis-charged after the payment plan iscompleted. Payments are made fromeach paycheck to the Chapter 13Trustee, normally through employerwage deduction.45. A Chapter 13 is NOT a bill consolida-tion loan, although many people look at itthat way. Although it is a similar concept, abill consolidation loan is money actuallyloaned to you to repay other creditors. In aChapter 13, no money is loaned to youbecause you make your monthly paymentsto the Trustee, who disburses the moneyamong your creditors.46. Your priority claims are paid first in aChapter 13. Priority claims include debtsfor things like taxes, child support, etc.47. The amount you owe unsecuredcreditors, like medical bills, credit cards,etc. can normally be paid back as low as5¢ on the dollar. (This figure is not writtenin stone. It is subject to change dependingon your individual State laws, type of debtit is, as well as the income and budget ofthe debtor.)48. You are normally allowed to keepyour home, car and everything else youown when you file a Chapter 13 as long asyou make regular payments to the Chapter13 Trustee.Steps That Occur in Filing aChapter 13 Bankruptcy49. When your bankruptcy petition isprepared and signed by you, it is filed withthe Bankruptcy Court. You are assigned acase number and a Trustee. Normally,there is only one Chapter 13 Trustee whomakes decisions on all Chapter 13’s filedin his/her jurisdiction. In a Chapter 7, theremay be more than one Trustee, called an“interim” as well as a “trustee.”“102 Things You Need to Know Before You File Bankruptcy”Page 5 [...]... idea All you have to do is contact your attorney and ask them to file a Motion to Modify the Chapter 13 Plan You will need to go to the office and supply the attorney with new, updated income and budget information, which explains why you cannot make your normal Chapter 13 payment, but it is well worth the 2 hours of time 63 If you need to go into debt and purchase something on credit while you are... notice to all the creditors (people/companies you owe money to. ) This notice is normally sent 5 days after you file your petition 53 The court will normally send you a notice informing you that you are eligible to file bankruptcy You don’t have to do anything with this notice but keep it in your personal file 54 The Trustee will then send all your creditors, including you, a notice informing you of... payments, your case could be dismissed and you will have to start all over again 60 Finally, a Confirmation Hearing is scheduled but you normally do not appear in court Your attorney normally appears on your behalf to simply confirm that you are approved to be in the Chapter 13 plan  102 Things You Need to Know Before You File Bankruptcy” Page 7 Changes in Payments During a Chapter 13 Bankruptcy 61 Nothing... 102 Things You Need to Know Before You File Bankruptcy” Page 6 50 Your attorney or paralegal will also file a Chapter 13 Plan with your bankruptcy petition that details the amount of your monthly payments and the length of time you are going to be in the Chapter 13 Plan 51 This amount you pay each month to the Trustee is determined by the amount of money you currently make and how much money you need. .. After your bankruptcy is over and the creditors have been satisfied, any lien you have is not automatically removed from your property The attorney will need to be hired to remove the lien 68 Never make the mistake of running up debts on all your charge cards and then filing bankruptcy You can be held responsible for any charges you made within the last ninety (90) days  102 Things You Need to Know... and deed if you own or are purchasing a home or other real property (i.e., land, apartment complex, etc.); • Copies of your car, boat, motorcycle, mobile home or other titles to motor vehicles; • Copies of your tax returns; • Copies of any court proceedings filed against you; 72 When you have put together your file, you will have most of the information 102 Things You Need to Know Before You File Bankruptcy”... returned to a seller? o Yes o No What property did you turn over to a received? When and where did this take place? Has any of your property been assigned for the benefit of your creditors? o Yes o No Which creditor did you make an assignment to? When did you make the assignment to this creditor? What property did you assign to the creditor? Is any of your property in receivership or other legal custody?... noted on his or her credit report  102 Things You Need to Know Before You File Bankruptcy” Page 11 Therefore, if the debts you owe are also owed by your spouse, or cosigned by your spouse, it would be to your benefit to file a bankruptcy together as a married couple If most of the debts are in your name only, you may consider filing a bankruptcy as the only debtor 85 What if I am unmarried but living... Instead, you have the opportunity to take charge of your financial situation and get some relief, which is legally offered to you by the United States Bankruptcy Court  102 Things You Need to Know Before You File Bankruptcy” Page 14 IMPORTANT PLEASE READ!! The following 16 pages contain the forms you need to fill out in order to have a bankruptcy petition preparer obtain all the information necessary to. .. petition will be rejected or you may lose something you own  102 Things You Need to Know Before You File Bankruptcy” Page 10 How Your Credit Will Be Effected by Bankruptcy 80 If you are behind in paying your bills, your credit is already effected Filing a bankruptcy may actually be your first step in repairing a bad credit situation When a creditor finds a bankruptcy on your credit report, it shows . information 102 Things You Need to Know Before You File Bankruptcy”Page 8 needed to file a bankruptcy petition.However, the attorney, or whoever youhire to prepare. own. 102 Things You Need to Know Before You File Bankruptcy”Page 9 102 Things You Need to Know Before You File Bankruptcy”Page 10How Your Credit Will Be