The clerk of the bankruptcy court mails to the debtor, the debtor's attorney, the trustee, all creditors, indenture trustees, and the U.S. trustee: 1. notice of the filing of the Chapter 7 bankruptcy case 2. an explanation of the automatic stay EXHIBIT 5–1 Flow Chart for Chapter 7 (Continued) fre_chqxd 3/15/06 PM Page File Size: KB. A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy . EXHIBIT 6–1 Flow Chart for Chapter 13 The Filing of the Chapter 13 Petition The debtor files with the bankruptcy court clerk’s office: 1. Filing fee and administrative fee 2. Voluntary petition, including Exhibit B, if the debtor is an individual whose debts are primarily consumer debts.
Bank debit cards are probably the best thing that ever happened to people like you and me after filing bankruptcy. We all know what these are. They are cards that look like a Visa or MasterCard but when we use them, the amount is deducted from our checking account.
Debit cards take the place of writing a check. The main problem people have with using their debit cards is they forget to record the transaction in their check books, which is standard when writing a check. To solve this problem, simply take the receipt the cashier gives you and slip it inside your checkbook to record when you get home.
Or, if your bank has an online banking service, review your bank account statement at least once every week and keep your checkbook balanced. Another problem using debit cards is that some banks charge a fee.
But check with your bank for the specifics. For example; I have a debit card through my credit union. This small verse is very powerful. It suggests you not to owe any man this includes credit card companies because God knew it would be living life similar to a jail sentence. Instead, He commands us to love each other, which is one of the main secrets to a happy and fulfilled life of joy, peace and contentment. I urge you to think about this and I hope you have a wonderful life.
We forget to pay or fall behind on payments on credit cards, mortgages, cars, medical bills, or other situations involving bills. Then, we get a letter or telephone call. For some these calls can become a terror attack by their creditors. The creditors are calling at all hours at home and work. They are calling the neighbors, the family and employers.
They are obnoxious, condescending and downright rude when you do talk to them. Despite the laws governing their actions many creditors and collection companies feel that an individual will not have the time, money or emotional strength to pursue them in court. Therefore, they get away with the outrageous and, sometimes, illegal acts. If your case is still open 11 U.
Section prohibits this contact without permission of the Bankruptcy Court. If your case is discharged then creditors and their collection companies are permanently enjoined from contacting you unless they have received special permission from the Bankruptcy Court, or your debt is one that is excepted from your discharge. They will not look at your account to see if the bill is correct, at least not in the initial stages of collection.
The collectors or agents accept what the computer tells them. The collection letters that you receive are usually computer generated and often do not have a signature on them. The collectors often threaten to report you to the credit reporting agencies and ruin your credit or threaten to sue you for the amount they claim you owe.
Most of the calls come from outside the United States. They just want their pound of flesh. The phone calls arrive at inconvenient times and places. The collectors often call at work and embarrass you in front of your co-workers. Often the collector has an obnoxious attitude and manner, acting like you are somehow a criminal.
If you feel you do not owe the money, or the amount the bill collector is claiming is incorrect, you should write a letter to both the collection company and the original creditor stating you do not agree you owe the money, or stating the amount owed is incorrect.
You should also ask for a record of your payments. If the bill collectors report the debt to a credit reporting agency, you should write to the credit reporting agency and tell them the bill is in dispute.
Whenever you write to a bill collector or to the reporting agency, you should sign the letter, date it, and keep a copy for your own file. Remember, just calling the bill collector to say you do not owe the money may not leave a permanent record of the call. Like most bureaucracies, if it is not in writing, it does not exist. Section When you write your letter, do not forget to date it, sign it, and keep a copy. If you send this letter, it will not only stop letters to you, but will also stop telephone calls to you.
Telephone calls from bill collectors are one of the most annoying, draining, embarrassing and demoralizing experiences anyone can encounter. The bill collectors count on these bullying tactics to work because you pay them.
Perhaps you pay them with funds that should be used to pay your mortgage, car or food for your family. Many of their actions are illegal and they know it. They assume you do not know your rights and will not report them to the proper authorities. T he collectors or agents cannot communicate with third parties such as your neighbor, your friend, or your great aunt Matilda.
They cannot contact you at work if they know notice must be in writing that your employer prohibits it. They cannot threaten you with criminal prosecution or call you on the phone repeatedly with the intention of harassing you. They cannot use or threaten violence. They cannot use obscene or profane language.
They cannot claim that you will be imprisoned or your property seized, unless they are the lender on that property. Also, the collectors cannot pretend to be someone else just to get in touch with you. They cannot threaten to take any action that cannot legally be taken or that they do not intend to take; they cannot take a post dated check and then deposit it before the date on the check.
The credit agency can also be reported to the State of Arizona, which regulates credit collection agencies located within Arizona. This law does not apply to the original creditor. If you do not wish to speak with him, inform him that he is trespassing and call the police. If a repo agent comes to your house, your car is parked on private property not in the street and you do not want him to take your vehicle, you should tell him you refuse to give him permission for repossession and he must leave immediately because he is trespassing.
If the repo agent or agents refuse to leave, call the police. If you live on any of the Indian Reservations, you do not have to turn your car or mobile home over to a repossession agent. On the Reservation, repossessions can only be done voluntarily in other words, if the car owner gives the repossession agent permission to take the car, then the car is given on a voluntary repossession.
If you do not give permission for the agent to take the car, the agent must go to the tribal court, sue the owner of the car for repossession, and get an order from the tribal court for repossession of the vehicle. If the collection company is taking illegal actions then get as much proof as possible — log all calls, record all discussions if you state permits it , put them on speaker phone and have a third party witness the discussion. Include copies of your written notes and demands.
Make sure you send a copy of the complaint s to the offending company and the original creditor. But their behavior must be truly offensive, not just annoying. You could bring an action in small claims court, or hire a lawyer. But, you must have proof of their actions in order for any court to find in your favor. In order to have this proof you need to keep a diary of all calls, the time and date, what was said and whether or not you told them to stop calling.
If the collection agency does not have your address, you may not want to give it to them. In that case, simply fill in information such as your name and account number so that the collection agency can identify who you are. If you want verification of the debt, but do not want the collection agency to have your address, you may give the address of a post office box or family member.
This letter is intended to notify you the cease all communication with me, any member of my family, relatives, neighbors or employers pursuant to 15 U. You may notify me in writing of your intention to terminate collection or of your intention to pursue specific remedies. This written notice to cease communication shall not be construed as an admission with respect to the above mentioned account.
NOTE: it is very important that you keep of copy of this communication for your records. If you wish, you may want to write a few lines explaining your situation at the bottom of the page. If you are living on Social Security and have no other income, you may want to put that in your note.
Also, you may want to state that you want to pay the bills you owe, but simply cannot afford to pay them at this time. You are not required to give any reason why you cannot or will not pay the alleged debt, but it could be to your benefit.
For example, the collection agent may decide to focus collection efforts on others who have a greater ability to pay. Send the original to the collection agency; a copy to the creditor; and a copy to this address may be outdated so check the FTC website :. Send these letters certified mail, return receipt requested. Keep the third copy of the letter, the Certified Mail receipts, and the green cards which you should receive back in the mail for your records.
The collection agency should then stop contacting you except to provide information about their basis for claiming that you owe a debt. This week, yet another Washington debate over who deserves a break on their debts drew to a close.
On Thursday, the Senate voted against allowing judges to adjust the terms of the mortgages of people filing for personal bankruptcy. Skip to the next paragraph and scratch the surface of the opposition in these sorts of debates, and it tends to ooze moral righteousness. In ancient times, when interest accrued and compounded, it was common for the indebted to simply work it off. Often, this took the rest of their lives. Many of the teachings that grew up around debt forgiveness aimed to avoid that sort of outcome.
Those who spend a little more than they earn are controlled by their circumstances. They are in bondage. This will be a familiar idea to people who have considered the idea of paying only the minimum amount on a large credit card debt , only to realize that if they do that, the debt may actually outlive them. Scripture suggests that the redistribution of property is also a reasonable thing to do. In the Old Testament, for instance, Chapter 15 of the book of Deuteronomy calls for the forgiveness of debts once every seven years.
Religious leaders were aware, however, of the chilling effect that could have on lending particularly in the sixth year. He added that later on, the Talmud introduced the idea of a Prosbul. This was a sort of workaround court that was not covered by the religious law. The Prosbul could administer debts during or right before the seventh year. The power is there. The real question is, do you use it and when?
Another idea popular with rabbis and early Christians, he said, was the notion that doing good deeds turned God into a debtor. I think being able to dismiss debts or forgive them is something that is seen as a generous and gracious act.
This is because of some of the tenets of Islamic law, claim to foreclose on homeowners less frequently than regular creditors, according to Mahmoud Amin El-Gamal , an expert on Islamic finance and an economics professor at Rice University. He added, however, that any leniency was probably priced into the financing in the first place, making it a bit more expensive.
The Koran, meanwhile, offers one of the more useful ideas on debt. But during that granting of time, he added, the creditor is not allowed to charge interest. If lenders and senators are unwilling to allow judges to permanently alter the terms of a mortgage loan, perhaps they would agree to allow qualified borrowers who have lost their jobs or fallen ill to take a two- to six-month break from making payments. During this time, the lenders would stop the interest clock from ticking, not levy any fees and not tack on missed payments to the end of the loan.
Then, once the borrowers were back on their feet, they could start regular payments again. Or, if this proves unpalatable or too expensive, how about selling an insurance policy that would pay for a six-month period of payments?
That could satisfy both God and the gods of capitalism. Perhaps if the Democrats want to enact bankruptcy reform, they ought to bring an imam to address their opponents. Judges ought to be more learned than witty, more reverent than plausible, and more advised than confident. Supreme Court U. Supreme Court — Legal Information Institute.
Trustee Program. Filling in information is easy. Knowing the consequences of that information is not. Courts PDF Forms. Bankruptcy Laws come from the United States Bankruptcy Code, with references to other federal and state laws, and rules. The Code is divided into chapters: 1, 3, 5, 7, 9, 11, 12 and Liens secured against property, such as a house or car, survive the liquidation. If the debtor wants to keep the secured property they must pay at least the value.
The non-exempt assets, if any, are sold liquidated by the trustee and those funds used to repay creditors. Most unsecured debts such as credit cards are discharged by the bankruptcy proceeding. Common exceptions to discharge include child support, alimony, income taxes less than 3 years old and property taxes, most student loans and fines and restitution imposed by a court for any crimes committed by the debtor.
The law also requires that the debtor list all assets in their schedules. Failure to do so can result in a criminal referral to the Department of Justice for prosecution. The secured creditor may seek a court order allowing them to repossess the secured collateral house or car. Fully secured creditors are not entitled to participate in any distribution of liquidated assets that the bankruptcy trustee might make.
Frequently Asked Questions about a Chapter 7. These documents are reviewed by the Chapter 13 Trustee and other creditors. In addition to the documents the Debtors also file a Plan of Reorganization.
This is called debt adjustment. The intention is that over the next 3 to 5 years the Debtors will pay all the disposable income income minus allowed expenses- some trustee have expense guidelines and Census Bureau and IRS Data to their creditors by way of the Bankruptcy Trustee. At the end of their Plan period their remaining debts will be discharged, unless they are non-dischargeable.
A successful Chapter 13 case always requires an experienced bankruptcy lawyer familiar with the prevailing judicial attitudes in the district and the myriad of unwritten local rules. Frequently Asked Questions about Chapter Liquidation for Business — Chapter 7 The business is liquidated in a chapter 7. When a troubled business is badly in debt and unable to pay its creditors, it may file for bankruptcy in a federal court under Chapter 7.
Normally, this would mean that the business ceases operations unless continued by the Chapter 7 Trustee. The Trustee generally sells all the assets and distributes the proceeds to the creditors.
It is possible that all or a portion of the company is sold intact to other companies during the liquidation. Once all assets of the corporate or partnership debtor have been fully administered, the case is closed. The debts of the corporation or partnership theoretically continue to exist until the expiration of the applicable statutory period.
In return, the debtor must agree to pay debts in strict accordance with a Reorganization Plan approved by the bankruptcy court. During this repayment period, creditors are unable to pursue debts beyond the provisions of the reorganization plan.
This gives the debtor the chance to restructure affairs in the effort to meet financial obligations. This allows the debtor to keep property and pay the fair market value rather than the entire amount of the secured debt. There are some exceptions. The debtor can surrender property to the lender or landlord. If the debtor fails to comply with the reorganization plan, the bankruptcy court may order liquidation. A debtor who successfully completes the reorganization plan is entitled to a discharge of remaining debts.
In keeping with the general preference for bankruptcy rehabilitation rather than liquidation, the goal of this policy is to reward the conscientious debtor who works to help creditors by resolving his or her debts. Diane L. Drain, bankruptcy attorney, retired law professor, mentor and community spokesperson. Please understand that it is very important for you to obtain legal advice regarding your particular situation. The caller does not understand that bankruptcy is not simple — it is like open heart surgery.
If the surgeon is good then the surgery will go as planned, but if there are complications or the surgeon does do a good job the consequences can result in the unnecessary loss of thousands of dollars. Talk to an experienced bankruptcy attorney not their paralegal and determine if they know the answers to your questions and if their personality fits your needs.
By the way — bankruptcy is a Constitutional right. Educating yourself about your options, including bankruptcy, is a very smart choice. History affords us many instances of the ruin of states, by the prosecution of measures ill suited to the temper and genius of their people. The ordaining of laws in favor of one part of the nation, to the prejudice and oppression of another, is certainly the most erroneous and mistaken policy.
There are hundreds of other questions throughout this website. Take you time to review each, or call for your free telephone conference. Bad Faith Bankruptcy. Please Note: This area is intended for the exclusive use of attorneys.
Take a look at g and h. Please Note: The information contained in this web site, article or link may be outdated, incorrect or not applicable; it is your obligation to confirm the accuracy. Federal Trade Commission very easy to read list of questions and answers such as: how can you be contacted, can they contact someone else, what is harassment, what is prohibited, how can you tell if they violated the law and where can you report violations?
The law prohibits creditors from using abusive or deceptive tactics to collect a debt. Click here for steps to your free bankruptcy consultation. Your Bankruptcy Discharge. The following is for a chapter 7 case. Remember that the discharge only deals with the creditors listed in your bankruptcy. Receiving the discharge is not the end of your responsibility to the trustee.
Just because a discharge has been entered does not mean your debts are all gone. The difference in these types of credit cards is that you are charged high fees for everything. What is a sign of danger: getting cash advances on other credit cards to pay the minimum balance on others. Here is a clip from an article on what the author learned from wealthy people: One of the things I learned from all the wealthy people I talked with was to stop using credit cards.
Learning How to Pay Bills. Bank Debit Cards. Food for Thought. At one time all of us have been contacted by a bill collector. If you have filed bankruptcy it is contempt of a federal restraining order called the automatic stay for the creditor or his collection company to contact you. Perhaps the most annoying tactic, used by bill collectors, is constant telephone calls demanding money. You have legal rights which protect you against all of the above practices.
Disputing a bill If the bill collectors report the debt to a credit reporting agency, you should write to the credit reporting agency and tell them the bill is in dispute. Collection Practices Act , forbids bill collectors from calling you at inconvenient times, such as before a. Debt collectors cannot use any false, deceptive, misleading, representation of any means in connection with the collection of your debt.
The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts.
Much of the bankruptcy process is administrative, however, and is conducted away from the courthouse. In cases under chapters 7, 12, or 13, and sometimes in chapter 11 cases, this administrative process is carried out by a trustee who is appointed to oversee the case.
A debtor's involvement with the bankruptcy judge is usually very limited. A typical chapter 7 debtor will not appear in court and will not see the bankruptcy judge unless an objection is raised in the case. A chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing. Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors, which is usually held at the offices of the U.
This meeting is informally called a " meeting" because section of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.
A fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial "fresh start" from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a decision:. Local Loan Co. Hunt , U. This goal is accomplished through the bankruptcy discharge, which releases debtors from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts.
This publication describes the bankruptcy discharge in a question and answer format, discussing the timing of the discharge, the scope of the discharge what debts are discharged and what debts are not discharged , objections to discharge, and revocation of the discharge.
It also describes what a debtor can do if a creditor attempts to collect a discharged debt after the bankruptcy case is concluded. Six basic types of bankruptcy cases are provided for under the Bankruptcy Code, each of which is discussed in this publication.
The cases are traditionally given the names of the chapters that describe them. Chapter 7 , entitled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor's assets.
These cases are called "no-asset cases. In most chapter 7 cases, if the debtor is an individual, he or she receives a discharge that releases him or her from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed. Amendments to the Bankruptcy Code enacted in to the Bankruptcy Abuse Prevention and Consumer Protection Act of require the application of a "means test" to determine whether individual consumer debtors qualify for relief under chapter 7.
If such a debtor's income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief. Chapter 9 , entitled Adjustment of Debts of a Municipality, provides essentially for reorganization, much like a reorganization under chapter Only a "municipality" may file under chapter 9, which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.
Chapter 11 , entitled Reorganization, ordinarily is used by commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization.
The chapter 11 debtor usually has the exclusive right to file a plan of reorganization for the first days after it files the case and must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan. The court ultimately approves confirms or disapproves the plan of reorganization. Under the confirmed plan, the debtor can reduce its debts by repaying a portion of its obligations and discharging others.
The debtor can also terminate burdensome contracts and leases, recover assets, and rescale its operations in order to return to profitability. Under chapter 11, the debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.