Archive for the ‘Procedures in Bankruptcy’ Category

Why Is There So Much Paperwork Involved In A Bankruptcy Case

Sunday, January 10th, 2010

When you file for bankruptcy, you’re going to need to prepare and submit a lot of paperwork. It seems like overkill but, the law requires very detailed financial disclosure.

For example, the law requires that you file a petition to initiate your bankruptcy case, numerous schedules to show what you own, how much debt you have, the type of debt that you have, your monthly income and expenses, and excerpts of your financial history, all to enable the court and your creditors to determine if you qualify for the relief that you seek in your particular bankruptcy case.

A better way to understand this is to first explain the reasons why someone (or some business) might file for bankruptcy.

Some of the most common objectives for filing for bankruptcy are:

(A) to discharge overwhelming unsecured debts;

(B) to cure or bring current a mortgage arrearage to retain a residence or other real estate;

(C) to keep creditors at bay while proposing a personal or business plan of reorganization; or

(D) to pay back all or some part of the debt for which the creditors are seeking collection because of the existence of high income, equity in assets or non-dischargeable debts.

You must thoroughly and accurately fill out and file all the paperwork mentioned above so that the court and creditors can determine:

(A) if you have limited or no equity in assets so that you can discharge unsecured debts without having to pay anything back;

(B) whether you have enough net monthly income to be able to feasibly cure or bring a mortgage arrearage current while maintaining payment of other necessary monthly expenses;

(C) whether you filed the case in good faith to enable creditors to be kept at bay from its collection efforts; and

(D) where you are compelled to pay back something to creditors, how much you need to pay back based on your equity in assets and excess monthly income.

Please feel free call me at (570) 823-9400 at my office in Wilkes-Barre, Pennsylvania or write to me at davidharrisesq@epix.net, if you would like free information about all that I have discussed.

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How Much Do I Need to Owe to File for Bankruptcy

Saturday, December 26th, 2009

There is no specific sum that one needs to owe to file for bankruptcy.

Rather,  the need for filing will depend on the particular circumstances that a person confronts. For example, a surgeon with $40,000 of credit card debt may not need to file. An elderly person with medical needs, huge monthly utility bills and a particular sensitivity to collection calls having $8,000 of credit card debts may need to file.

Some of the many factors to consider before filing a bankruptcy petition are:

1.   Your ability to pay debts as they become due, based on current household income and expenses.

2.   Whether the amount that you owe can be paid back within a reasonable period of time without adversely impacting your lifestyle, measured by reasonable and necessary expenses.

3.   Whether there is an immediate need for you to stop creditor action, such as collection efforts, levies, garnishments, foreclosures, repossessions or telephone calls.

4.   Whether you are particularly sensitive to collection calls.

5.   Whether you have a need to cure a particular debt (e.g., a mortgage arrearage) through a court-ordered plan, without a particular concern for discharging debts.

6.   Whether you or a household family member has incurred a permanent job loss or decline in income.

7.   Whether you or household family member has incurred an illness or a family member upon whom you relied on for support has died.

8.   Whether you are engaged in a divorce proceeding.

9.   Whether you or household family member has a need to devote funds to a particular debt or debts, such a medical debts, tax debts, child support or student loans.

10.  The nature of the your debts (e.g., child support, student loans, taxes, credit cards, mortgage or business debts).

11.   Your personal view toward a bankruptcy filing.

If you wish to discuss the content of this post further, please feel free call me at (570) 823-9400 or write to me at davidharrisesq@epix.net.

Do I Have To Go To Court When I File For Bankruptcy

Wednesday, December 9th, 2009

In most cases you do not have to go to court when you file for bankruptcy.

You will, however, always have to appear for a meeting, known as a Section 341 or creditors meeting,  approximately 5 to 8 weeks following your bankruptcy filing, where the trustee appointed to your case and your creditors can ask you limited questions about your assets and finances.

In Pennsylvania, these meeting are ordinarily not held in a court. Also, so you know, credit card companies, banks and mortgage lenders usually do not appear at these meetings.

If the trustee or a creditor of yours seeks to challenge your right to obtain a discharge in your bankruptcy case (for any of a variety of reasons, including fraud) or if a creditor seeks to obtain relief from the protection that the bankruptcy law affords you (known as the automatic stay) to pursue a claim against you or your property in state court (such as initiating a foreclosure action), you may be required to appear in bankruptcy court to defend that action.

You may also be required to appear in bankruptcy court if you elect to sign a reaffirmation agreement in order to keep a vehicle that is secured by a loan. Your appearance is simply to convince the bankruptcy judge that you have to ability to maintain your vehicle payments.

If you have any questions about this post, please write to me at: davidharrisesq@epix.net or call me at my Wilkes-Barre, Pennsylvania office at (570) 823-9400.