GRAND RAPIDS BANKRUPTCY ATTORNEY–CHAPTER 7 BANKRUPTCY Q&A
The Grand Rapids Bankruptcy Attorneys at Krupp Law Offices P.C. can answer your questions when you are facing financial problems and have questions about your chapter 7 bankruptcy options in the Grand Rapids area, it is important to have the representation of a good bankruptcy attorney. Krupp Law Offices P.C. has been providing quality bankruptcy representation for over 85 years. If you are facing financial problems, call the bankruptcy attorneys at Krupp Law Offices P.C. for a free phone consultation. During your phone consultation, our attorneys will provide you with free immediate answers to your questions and a schedule a free initial appointment with one of our bankruptcy attorneys.
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BANKRUPTCY - CHAPTER 7 COMMON QUESTIONS AND ANSWERS
1. WHAT IS THE CHAPTER 7 BANKRUPTCY PROCESS?
Chapter 7 Bankruptcy is started by the filing of a Chapter 7 bankruptcy petition. The petition contains basic financial information about you including a list of your assets, a list of your debts, a budget and other basic information. The bankruptcy petition is then signed and filed with the US Bankruptcy Court.
The Court will mail notices to all of your creditors informing them that you have filed bankruptcy.
Approximately 30 days after you file your case, a 341 meeting will be scheduled. This is a meeting with the Bankruptcy Trustee who reviews your schedules. The 341 meeting is not adversarial. There is no judge present. Typically, the only people who are present at your 341 meeting are the Trustee, your attorney, yourself, and possibly creditors. Creditors do not usually attend these meetings. Your case will be scheduled for a particular hour (i.e. 10:00 am), but they typically only take about 10 minutes.
Approximately ninety (90) days after your 341 meeting, you will receive a notice of discharge in the mail. At this point, your case will be over. During this ninety (90) day period usually nothing will take place.
2. WHAT IS A 341 MEETING? WHAT WILL I NEED TO BRING?
341 meeting is a meeting with the Trustee to review your schedules. The 341 meeting is held at the Trustee's offices and not the courthouse. A judge will not be present.
Typically, the Trustee will want you to provide him with copies of the last six months of pay stubs, titles to cars, boats, or recreational vehicles, proof of insurance for any vehicles, copies of tax returns for the last 2 years, copies of deeds for real property and copy of your filed mortgage (a filed mortgage can be obtained from the Register of Deeds from the county in which you reside. Additionally, you will need to bring your driver's license and social security card to verify your identity. In the event that the Trustee needs additional information, you will provide it to him at a later date.
3. WHAT PROPERTY CAN I KEEP?
Under the bankruptcy code, certain property is exempt. This means a debtor may keep this property and still go through bankruptcy. This property is kept by the debtor and the creditors cannot take the property. Specifically, the bankruptcy code exempts:
- Equity in the debtor’s primary residence up to $21,625.00 per person. "d(1) exemption"
- Equity in a motor vehicle up to $3,450.00 "d(2) exemption"
- Household goods up to a value of $11,525.00. "d(3) exemption"
- Jewelry up to $1,450. "d(4) exemption"
- Exemptions for tools up to $2,025, "d(6) exemption"
- Life insurance values up to $11,525.
- Miscellaneous exemption in any property the debtor wishes up to $1450.00. In addition, up to $11,525.00 of unused exemption in a debtor's primary residence can be used as a general exemption. As a result, an individual who does not own a residence may exempt up to $11,525.00 in any property they wish in addition to the general $1450.00 exemption."d(5) exemption"
- Typically all retirement accounts.
- All of the above exemptions are doubled for a married couple
4. CAN I KEEP SECURED PROPERTY? (i.e. my home & car)
There are basically two different options when deciding how to proceed with a secured loan.
Option # 1 is to reaffirm the property (keep property and payments).
Option # 2 is to reject the property. (Give back property and no payments)
A reaffirmation agreement is a contract between you and the creditor which provides for repayment of the debt owed and the amount of the payment. If the reaffirmation agreement is accurate, sign it and return it to your attorney for entry with the Court.
A third option allows you to redeem the property at fair market value. This requires full payment of the fair market value at the time of the redemption.
5. HOW DO I PAY FOR A LAWYER?
6. WHAT SHOULD I DO IF A CREDITOR CONTACTS ME?
Upon filing a case, our office will provide you with the name of your judge and your case number. In the event that a creditor contacts you, provide them with that information. They should immediately stop contacting you. If a creditor contacts you by mail, then send them a copy of your 341 meeting notice along with the bill.
If problems continue, contact your attorney with the phone number and address of the creditor involved.
7. WHAT CREDITORS SHOULD BE LISTED, WHAT IF I FORGET A CREDITOR?
Under the bankruptcy code, you must make your best efforts to determine your creditors. All of your creditors should be listed. If you are unable to determine all of your creditors, we strongly suggest that you obtain a credit report from either TRW or Merchant Service Bureau (616-940-7100) Additionally, you may be able to obtain your credit report on the Internet at www.annualcreditreport.com.
In the event that you forget a creditor we can add a creditor until your case is discharged. There is a fee of $100.00 for each additional amendment to your creditor list. After your case is discharged you may add a creditor provided that they were unknown at the time of your filing. At that point, they will be treated as discharged. This is done by filing a motion to reopen your bankruptcy case which can be done at any time for an additional fee. You should contact your attorney immediately upon the discovery of an additional creditor.
8. CAN I PAY MY DEBTS AT A LATER DATE IF I WANT TO?
By filing bankruptcy, you prevent the creditor from pursuing you for the debt. It does not prevent you from paying the debt back at a later date when or if you are financially able to do so. (i.e. wining the lottery).
9. HOW LONG WILL IT TAKE TO COMPLETE MY BANKRUPTCY?
It takes approximately 90 days from the time of filing the bankruptcy to the time you will receive a Notice of Discharge in the mail. Occasionally, the courts are behind on their paper work and they may not issue a discharge for an additional 8-12 weeks. The discharge is a photocopied notice from the court.
10. HOW WILL I KNOW MY DEBTS ARE DISCHARGED?
All the debts that you listed in your bankruptcy schedule will be discharged when you receive your Notice of Discharge in the mail. Certain debts may be non-dischargeable such as student loans and taxes. If you have questions on which debts are able to be discharged, speak with your attorney.
11. WILL I GO TO COURT OR SEE A JUDGE?
Typically you will neither go to Court nor see a Judge as part of your Chapter 7 Bankruptcy.
12. CAN MY DISCHARGE BE DENIED BY THE COURT?
Cases that are filed in bad faith or are incurred by fraud or misrepresentation. (i.e. lying on a credit application) can be denied a discharge. This is extremely unlikely and almost never happens.
13. CAN I GET CREDIT IN THE FUTURE?
Bankruptcy will be placed on your credit history after you file. When a creditor decides to extend you credit, they typically consider your current income, current expenditures, and your credit history. If you have filed bankruptcy, the creditor might require additional money down or a higher interest rate to compensate for the higher risk that you pose for non-payment. A Chapter 7 Bankruptcy will remain on your credit history for ten years. It will not prevent you from getting credit in the future, but may make it more difficult to obtain. Typically your credit is back to a normal level in about 24 months.
14. WHAT IS A CHAPTER 7 DISCHARGE?
Chapter 7 discharge is a court order releasing the debtor from debts and ordering the creditors not to attempt to collect the debt from the debtor. Once a debtor receives a discharge, the debts are no longer collectible.
15. WHAT DEBTS ARE NONDISCHARGEABLE UNDER CHAPTER 7?
Generally, all debts are dischargeable under Chapter 7 except debts as follows:
- Most tax debts.
- Debts that were incurred because of the debtor's fraud or providing a false financial statement (i.e. stating your income was $200,000 on a credit application when in fact you only earned $50,000). In addition, cash advances and debts for the purchase of luxury goods and services that were incurred 60 days prior to filing are presumably nondischargeable. Both of these require the creditor file a complaint of nondischargeability stating a basis for the nondischargeable nature of the debt.
- Debts not listed in the debtor's chapter 7 petition unless the creditor knew of the case in time to file the claim.
- Debts for fraud, embezzlement, larceny, if the creditor files a complaint of nondischargeability.
- Debts for alimony or child support and certain other divorce related debts included in a property settlement.
- Debts related to a divorce settlement require the nondebtor spouse to file a complaint of nondischargeability.
- Debts for intentional or malicious injury to a person or property. This also requires the filing of a complaint of nondischargeability.
- Fines or penalties.
- Debts for educational benefits and student loans that became due within 7 years unless the courts find hardship (student loans).
- Debts for personal injury or death caused by the debtor's operation of a motor vehicle while intoxicated.
- Debts that were or could have been listed in the previous bankruptcy case of the debtor in which the debtor did not receive a discharge.
16. WHAT PERSONS ARE NOT ELIGIBLE FOR A CHAPTER 7 DISCHARGE?
The following persons are not eligible for a chapter 7 discharge:
- A person who has received a chapter 7 discharge within the last 8 years (from the date of receiving the discharge until the date of filing).
- A person who has been granted a discharge in a chapter 13 case filed within the last 6 years unless 70% or more against secured claims were paid off in the chapter 13 cases.
- A person, who conceals, transfers or destroys property with the intent to defraud creditors or the trustee in a chapter 7 case.
- A person, who conceals, destroys or falsifies records of his or her financial condition of business transactions.
- A person who makes false statements or claims in a chapter 7 petition or who withholds records or information from the trustee.
- A person who refuses to answer questions or obey orders of the bankruptcy court either in his or her bankruptcy court case or in the bankruptcy case of a relative, business associate, or corporation in which he or she is associated.
17. WHAT PERSONS ARE ELIGIBLE TO FILE UNDER CHAPTER 7?
Any person who resides in the United States may file chapter 7 bankruptcy
18. WHO SHOULD NOT FILE A CHAPTER 7 BANKRUPTCY?
A person who is not eligible to receive a discharge should not file a chapter 7 bankruptcy. A person who has substantial debts that are nondischargeable under chapter 7 should not file a chapter 7 (i.e. taxes and student loans).
19. HOW MUCH IS A CHAPTER 7 FILING FEE?
Chapter 7 filing fee is $309.
20. WHERE IS A CHAPTER 7 BANKRUPTCY CASE FILED?
A chapter 7 bankruptcy case should be filed in the district where the debtor resides or maintains a principle place of business for the greater portion of the last 180 days. The bankruptcy court is a division of the United States District Court.
21. MAY A SPOUSE FILE BANKRUPTCY WITHOUT THE OTHER SPOUSE FILING CHAPTER 7?
A married couple may file for bankruptcy together or either party may file separately. There is not a requirement that a married couple file bankruptcy together. Typically, if both parties have substantial debts or there are a number of joint debts, it is logical for both parties to file chapter 7 bankruptcy rather than filing separately.
22. HOW DOES THE FILING OF A CHAPTER 7 BANKRUPTCY AFFECT LAWSUITS AND COLLECTIONS ACTIONS AGAINST THE DEBTOR?
A chapter 7 completely stops all legal proceedings. Debts that are fully dischargeable and are unsecured are discharged and are unable to be collected. In the event that the creditor has a security interest in property owned by the debtor (i.e. a car or a home), then the creditor must receive a "Lift of Stay" in order to pursue the retrieval of their collateral or continue with foreclosure action.
23. IS MY NAME GOING TO BE PUBLISHED IF I FILE A CHAPTER 7 BANKRUPTCY?
When a person files chapter 7 bankruptcy, there is a public record indicating the filing. In some locations, there are specific newspapers which list all bankruptcy filings.
24. ARE EMPLOYERS NOTIFIED OF A CHAPTER 7 BANKRUPTCY FILING?
Employers are usually not notified of a chapter 7 case. In contrast, a chapter 13 case usually provides for a wage withholding order in which a portion of your wages is paid to your creditors. As such, a chapter 13 requires notification of your employer that you have filed bankruptcy. Chapter 7 bankruptcy does not require any payments into a plan. As such, your employer is typically not notified.
25. MAY AN EMPLOYER OR GOVERNMENTAL AGENCY DISCRIMINATE AGAINST A PERSON WHO FILES CHAPTER 7 BANKRUPTCY?
No. Employers and governmental agencies cannot discriminate against individuals who file chapter 7 bankruptcy.
26. WHAT HAPPENS AFTER MY 341 MEETING?
After the 341 meeting, there is typically a 60 day period in which creditors have an opportunity to file a claim of nondischargeability. For most debtors, nothing happens during the waiting period after the 341 meeting. In the event that debts will be reaffirmed, typically reaffirmations are processed during this 60 day period.
27. WHO IS A CHAPTER 7 TRUSTEE?
Chapter 7 trustee is a court appointed officer that is appointed to review your bankruptcy schedules including your exemptions. It is the trustee's duty to check your schedules for accuracy and distribute assets that are not exempt under the bankruptcy code.
28. WHAT OBLIGATIONS DO THE DEBTORS HAVE TO THE TRUSTEE?
Law requires that a debtor cooperate with the trustee in providing certain information and fully disclosing assets and liabilities. In the event that a person fails to cooperate with a chapter trustee, the chapter 7 trustee may request that the court dismiss a bankruptcy and deny a debtor a discharge for failing to cooperate.
29. HOW ARE SECURED CREDITORS TREATED IN A CHAPTER 7 CASE?
Secured creditors with valid security interests (i.e. a mortgage or a lien on a vehicle) have two options. They may reaffirm the debt with the debtor and allow them to maintain the property and the payments. Alternatively, the creditor can take the collateral back and extinguish the debt in full.
30. CAN A UTILITY COMPANY REFUSE TO PROVIDE SERVICE TO A DEBTOR WHO HAS FILED CHAPTER 7 BANKRUPTCY AND DISCHARGED A UTILITY BILL?
No, but they can require that a debtor provide a security deposit for future services.
31. HOW DOES A CHAPTER 7 DISCHARGE AFFECT THE LIABILITY OF COSIGNERS OR OTHER PARTIES LIABLE ON A DEBT?
A chapter 7 provides for a discharge of the debt associated with the individual who filed for bankruptcy. A chapter 7 discharge does not protect the enforceability of the debt against codebtors or other parties who may be liable on the specific debt.
32. WHAT IF I HAVE FURTHER QUESTIONS?
In the event that you have further questions, please contact our office and we will be more than happy to answer them for you.
If you are facing financial problems, a good bankruptcy attorney is not optional, it is a requirement! Our bankruptcy attorneys can answer your questions with straight talk. Having the right bankruptcy attorney on your side can relieve your stress during difficult financial times. Our bankruptcy attorneys have over 85 years of bankruptcy experience. We can provide you with excellent bankruptcy representation.
Krupp Law Offices P.C. is located in downtown Grand Rapids, Michigan and has the right bankruptcy attorney for you. We represent clients in all bankruptcy matters throughout West Michigan, including the cities of Grand Rapids, Holland, and Grand Haven, and the counties of Kent, Ottawa, Allegan, Barry, Newaygo, Montcalm, Muskegon, and Ionia.
Call for a free phone consultation. Our office can help.
161 Ottawa NW Suite 404
Grand Rapids MI 49503