Bankruptcy FAQ

SHOULD I FILE BANKRUPTCY?

Whether or not you should file bankruptcy depends on your particular circumstances. In your initial consultation with Krieger Law Group, we’ll look at your situation and provide you with options. We may be able to help you resolve your financial difficulties through other means, or we may recommend bankruptcy.

HOW LONG WILL MY BANKRUPTCY SHOW ON MY CREDIT REPORT?

The Fair Credit Reporting Act, 6 U.S.C. Section 605, is the law that controls credit reporting. The law states that credit reporting agencies may not report a bankruptcy case on a person’s credit report after ten years from the date the bankruptcy case is filed. Other negative account information is removed after seven years. The larger credit reporting agencies belong to an organization called the Associated Credit Bureaus. The policy of the Associated Credit Bureau is to remove Chapter 11 and Chapter 13 cases from the credit report after seven years to encourage consumers to file under these chapters. The Bankruptcy Court has no influence over these reporting policies.

WHAT IS THE DIFFERENCE BETWEEN CHAPTER 7, 11 & 13 CASES?

Chapter 7 – Liquidation: Chapter 7 of the U.S. Bankruptcy Code provides for an orderly court-supervised means of selling certain assets to pay your creditors. In a Chapter 7 case, a Trustee is appointed to take charge of your assets. Nevada bankruptcy exemptions allow you to keep some of your property. The Trustee sells the rest to pay your creditors. Unless someone objects, some or all of your debts will be discharged within four to six months after your bankruptcy petition is filed.

Chapter 11 – Reorganization: Chapter 11 of the U.S. Bankruptcy Code is available to individuals, businesses, and other entities, but is primarily intended to allow an ongoing business to restructure its debts. Successful reorganization is dependent on the business filing a reorganization plan and obtaining creditors’ acceptance and court approval of the plan.

Chapter 13 – Adjustment of Debts for an Individual with Regular Income: Chapter 13 of the U.S. Bankruptcy Code provides a court-supervised method for you to pay back creditors over a period of time of up to five years. You file a plan for repayment with the bankruptcy petition or within two weeks. Payments must begin within 30 days after the case has been filed. The payments are made to a Trustee, who pays your creditors after the plan has been approved by the court.

WHEN AM I UNDER BANKRUPTCY PROTECTION?

You are under bankruptcy protection from the moment your petition is filed and a case number is assigned. Once your petition is filed, there exists an automatic stay, or suspension, of virtually all litigation and other action by creditors against you or your property. In other words, once your petition has been filed, creditors cannot start or continue most legal actions, such as foreclosure of liens, garnishments, trials, or any action to repossess your property. Creditors can, however, ask the court to allow them to pursue or continue legal collection actions, but must show cause for doing so.

WILL FILING BANKRUPTCY STOP MY WAGES FROM BEING GARNISHED?

Yes. Once you file bankruptcy, you are under protection of the court from most creditors. Once you provide Krieger Law Group with contact information, we immediately notify the garnishing creditor and/or sheriff that you have filed a bankruptcy petition. This stops garnishments immediately.

WHAT IS A MEETING OF CREDITORS? DO I HAVE TO ATTEND?

The first meeting of creditors is required under Section 341 of the Bankruptcy Code and you are required to attend. Failure to attend this meeting may result in dismissal of your bankruptcy case. But it’s not cause to be nervous. Even though you will be under oath, the hearing is fairly informal and is conducted by a bankruptcy Trustee, who is usually an attorney or a Certified Public Accountant. The hearing takes place in an office-like room. There is no judge or jury, and often no creditors. Your Krieger Law Group bankruptcy attorney prepares prior to the Trustee interview and is with you at the hearing. The entire hearing generally lasts less than five minutes.

The purpose of the meeting is to enable the appointed Trustee to ask you, under oath, about the information filed with the court. The Trustee or a creditor may inquire about your financial status, conduct, and financial affairs, and any other relevant matters. If a creditor wishes to do an in-depth examination, they must request a Rule 2004 examination from the court.

WHAT IS A TRUSTEE?

A Trustee is a person who works with the court to administer bankruptcy cases. The Trustee does not represent you or any individual creditor and cannot give legal advice. Rather, the Trustee has independent rights and duties that are outlined in the Bankruptcy Code sections 323, 327, 341, 343, 345, 363, 364, 365, 704 (chapter 7 cases), and 1302 (chapter 13 cases). In a Chapter 7 case, the Trustee may take possession of your assets, sell them, and distribute the proceeds to creditors. In a Chapter 13 case, the Trustee administers your payment plan, collects the funds, and pays the creditors. The Trustee also oversees the first meeting of creditors.

ARE ALL OF MY DEBTS CANCELLED BY THE BANKRUPTCY COURT?

Certain debts are not discharged by the Bankruptcy Court. These include taxes, school loans, any debts resulting from fraud, spousal support, and child support payments. Other debts are canceled only if your petition is approved by the Bankruptcy Court. If you have questions about specific debts, please ask your Krieger Law Group bankruptcy attorney.

WILL ALL OF MY CREDITORS BE NOTIFIED OF MY DISCHARGE?

All creditors who were listed on your mailing matrix or who entered an appearance in your case will be notified. If you have omitted a credit, you must immediately advise our office. Under the BAPCPA, omitted creditors may not be subject to the discharge, so it is imperative you list all of you debts in your Bankruptcy. If our office must list additional creditors once your case has been filed you will incur additional fees. So make sure all your creditors are listed in your Bankruptcy prior to filing. Our firm will provide all clients with a three-source credit report. However, you must carefully review your credit report to ensure all your debts our listed.

WHEN WILL MY CASE BE CLOSED?

Since each case is unique, it is difficult to pinpoint the exact time that your case will be closed. Many Chapter 7 no-asset cases are closed within 90 days from filing. Chapter 7 asset cases require that the Trustee liquidate the assets, which can take several years. If the Chapter 7 Trustee intercepts your tax return, they will keep your case open to disburse funds. If you are entitled to any remaining funds, the Trustee provides those to you after disbursement. This may take several months.

Chapter 13 cases remain open as long as the plan payments are being made, generally for three or five years after the plan has been confirmed. Chapter 11 reorganization cases are more complicated and may remain open longer than three years, even if a plan has been confirmed.

HOW DO I GET A COPY OF MY DISCHARGE?

You receive a copy of your discharge in the mail after it is entered. However, if more than 90 days have passed and you have not received your discharge or you need another copy, please call the Bankruptcy Clerk’s Office at (702) 848-3855).

WILL I BE ABLE TO KEEP MY HOME OR CAR IF I FILE BANKRUPTCY?

As long as your equity in the property is fully exempt, you will not lose your home or car during your bankruptcy. You may still be able to keep your property even if your property is not fully exempt by filing a Chapter 13 bankruptcy instead of a Chapter 7 bankruptcy.

CAN I GET A CREDIT CARD AFTER FILING BANKRUPTCY?

Yes, there are many credit options available. You might be able to keep the credit card you already have if the credit card company approves. You can also obtain a secured credit card that is tied to your own bank account.

HOW DO I DEAL WITH COLLECTION AFTER I HAVE FILED?

Document all calls and letters and refer them to Krieger Law Group. Our office ensures that creditors and collectors are aware of the stay that is put in place once your bankruptcy is filed.

HOW DO I LIST MY OMITTED CREDITORS?

You must list all of your creditors in your bankruptcy. In order to list and schedule omitted creditors, provide the following information to Krieger Law Group for each omitted creditor: name of creditor, complete address, account number, amount owed, an explanation of how the debt was incurred, and an explanation of why you did not provide our office with this information prior to filing for bankruptcy

There is a charge to add each omitted creditor. You must provide the correct amount to our office with the creditor information. It is imperative that you provide the information and payment immediately, or the omitted debts may not be discharged. If you have any questions, please contact our office.

WHAT DO I DO IF I RECEIVE NOTICE THAT FORECLOSURE IS STILL CONTINUING OR RESCHEDULED?

Don’t worry. Your Chapter 13 bankruptcy was filed on time, so all actions taken by your mortgage company are stayed. This includes foreclosure actions. Often, speculators, such as investors, don’t realize that you filed for bankruptcy or don’t know how bankruptcy works. Also, creditors often re-list property foreclosures for a month or two in the future when you file for bankruptcy. This does not mean that you lost your home. As long as you remain current with your Chapter 13 Trustee payments and have resumed your mortgage payments starting the month after your bankruptcy is filed, then you are on the right track.

If you continue to stay current with your Chapter 13 and mortgage payments, then there will generally be no basis for a creditor to foreclose on your property post-petition. Also, before any foreclosure action can commence your mortgage company has to seek approval from the bankruptcy court to lift the stay, which is the invisible wall protecting your assets. You would have at least 20 days’ notice if a creditor wants to bring such a motion in the Bankruptcy Court.

Also, unless the Chapter 13 trustee (or a creditor in interest) brings a motion to dismiss your Chapter 13, you are afforded all of the protections under Chapter 13.

Typically, a case is only dismissed or the stay is only vacated if you are not making your monthly Trustee and mortgage payments. So, make your payments and you do not have to worry.

If a payment is returned, please let Krieger Law Group know immediately. Payments are sometimes returned from your mortgage company because the left hand doesn’t know what the right hand is doing.

For this reason, it is crucial that you maintain close track of all payments sent in the first six to twelve months of your Chapter 13. It’s best to send all payments via Certified Mail.

WHAT HAPPENS IF I GET BEHIND WITH PLAN PAYMENTS

Do your best to catch up. If you are only slightly behind with your payments, then it’s not the end of the world. Try and get on track next month.

You should send some money to the Trustee to demonstrate your good faith and commitment to your Chapter 13 payment plan. If, in the interim, your Trustee files a motion to dismiss your case for non-payment, then you must provide our office with as much as you can afford in order to catch up with your payments.

Generally, a modified plan may be submitted to the Chapter 13 Trustee to cure post-petition delinquencies. However, you must provide our office with payment to prepare your modified plan, as well as make an appointment to come into our office and review your new plan with us.

TO WHOM DO I SEND THE MORTGAGE/TRUSTEE PAYMENT?

Send your regular monthly payment to the usual address until you are advised otherwise. If a payment is returned, please let Krieger Law Group know immediately. Payments are sometimes returned from your mortgage company because the left hand doesn’t know what the right hand is doing.

For this reason, it is crucial that you maintain close track of all payments sent in the first six to twelve months of your Chapter 13. It’s best to send all payments via Certified Mail.

WHEN DO I BEGIN TO PAY THE MORTGAGE OR TRUSTEE

You must begin to make your Chapter 13 Trustee payments, mortgage payments, and any other secured payments outside of your bankruptcy (such as car payments) the month after you file for bankruptcy.

WHAT HAPPENS IF I MISSED A PAYMENT TO MORTGAGE/CAR/TRUSTEE?

Do your best to catch up. If you are only slightly behind with your payments, it’s not the end of the world. Try and get on track next month.

However, your mortgage company may file a motion for relief from the automatic stay. The stay is what protects you while you are in bankruptcy and prevents creditors from pursuing or continuing legal action without court permission.

If your mortgage company files a motion for relief from stay, then you will receive a copy of the motion. You must contact our office immediately and provide us with money to propose to your lender. These motions can often be resolved through an adequate protection order (APO). An APO is an agreement between you and your creditor that outlines certain promises. Usually, APOs allow you to spread your missed or late post-bankruptcy petition payments out over a period of four to six months. However, this is not guaranteed. Generally, your creditor is entitled to receive attorney fees and costs for bringing the motion, but these can usually be included in the APO payments.

However, creditors often make mistakes, so if you receive a motion, carefully review it and pull together all your proofs of payment to ensure you received credit for all payments made. Do this even if you know you are behind with your payments. Creditors often misapply payments.

If you fall behind with your Chapter 13 Trustee payments, you should make an effort to send some money to the trustee to demonstrate your good faith and commitment to your Chapter 13.

If, in the interim, your Trustee files a motion to dismiss your case for non-payment, then you must provide our office with as much as you can afford in order to catch up with your payments.

Generally, a modified plan may be submitted to the Chapter 13 Trustee to cure post-petition delinquencies. However, you must provide our office with payment to prepare your modified plan, as well as make an appointment to come into our office and review your new plan with us.

CAN I REFINANCE/SELL MY HOME/PURCHASE CARS?

Yes, but you must obtain court permission to do so. Please provide our office with a good faith estimate, also called a tentative settlement statement, for selling/refinancing your home, and we will prepare a motion on your behalf.

Our office will also need the name, address, and phone number of your real estate agent, buyer, and/or refinance agent. In some cases, you must also provide our office with an appraisal, but we will advise you if this is necessary.

WHAT HAPPENS TO MY TAX REFUND?

While you are in bankruptcy your tax refunds are the property of your estate and the Trustee is entitled to intercept your refund and distribute your refund to unsecured creditors. However, if you need your refund or have an unanticipated expense, then our office may be able to file a motion on your behalf permitting you to retain your refund. You are usually able to keep your refund, but this often requires you to provide an equal sum to be paid to your unsecured creditors while you are in Chapter 13.

HOW DO I OBTAIN A NEW 341 HEARING?

You must attend your meeting of creditors. However, if you truly cannot make the scheduled date, you must advise Krieger Law Group of the reason you cannot attend and provide proof. We will, in turn, provide this to the Trustee. There is no guarantee that the Trustee will provide you a continued date, but we will make the request. Please know that you must provide our office with payment prior to the continued hearing date for our additional appearance. Accordingly, it is in your best interest to attend the initial hearing unless there is a serious emergency.

WHAT DO I DO IF TRUSTEE FILED AN OPPOSITION/MOTION TO DISMISS?

The trustee files Oppositions to Confirmation and Requests to Dismiss Chapter 13 in almost every Chapter 13 case after the 341(a) meeting of creditors. You probably noticed at your hearing that the Trustee took notes. Those notes were the Opposition and Motion to Dismiss. Krieger Law Group resolves most or all of the issues prior to your confirmation hearing.

You do not need to attend your confirmation hearing unless we specifically call you and tell you to attend. However, you may notice some items on the Trustee’s Opposition to Confirmation relating to documents or items requested by the Trustee during your 341(a) hearing. These items must be provided to Krieger Law Group immediately, or you case may actually be dismissed. So, for example, if your tax returns have not been filed and the Trustee requests your tax returns, you must provide these to our office prior to your confirmation hearing. You should have already received a letter from Krieger Law Group indicating which documents the Trustee needs. Please review this letter and provide the requested documents.

WHAT DO I NEED TO BRING WITH ME TO THE 341?

Generally, you must provide the following documents to the Trustee; bring any that are still outstanding:

  • Last 4 years of tax returns
  • Proof of Social Security number and a current photo ID
  • Bank statements for each bank account for the last six months, including the filing date of your bankruptcy. If you bankruptcy case was filed on June 15, 2020, you would have to provide bank statements from December 15, 2019 through June 15, 2020 for each bank account you control
  • Proof of income for the six months prior to filing. This includes proof of Social Security payments, support payments, regular pay stubs, personal injury awards or any other source of income during the six months prior to filing. For example, you must provide all proof of the income received from January 1 through June 30 for a case filed in July. This is a requirement of the court. You must also provide Krieger Law Group with proof of your post-petition income.
  • Copies of automobile purchase contracts (if applicable) and divorce decrees (if you divorced within the last six years)
  • Evidence of any real estate owned (such as deeds or settlement statements).

CAN I CONVERT TO A CHAPTER 7 BANKRUPTCY?

It depends. Generally, to the extent you are paying down IRS Taxes or mortgage arrears, it’s not in your best interest to convert to a Chapter 7 until these obligations are paid through Chapter 13 – especially if you want to keep your home. However, once these items are paid down, it may be in your interest to convert to a Chapter 7. Krieger Law Firm’s bankruptcy attorneys can advise you about your options.

WHEN DO I GET MY DISCHARGE?

You are eligible to receive your Chapter 7 discharge 60 days from the date set for the creditors’ meeting, unless a creditor objects in a timely manner or the court orders otherwise. Typically, you can expect to receive a discharge within five working days after the 60 days has passed. If a notice of amendment to schedules is filed to add creditors, then the discharge will be delayed an additional 30 days from the date of filing the notice. Occasionally, the clerk takes more than 60 days to issue your discharge. Follow up with the clerk at (702) 848-3855 if you have not received your Chapter 7 discharge after 90 days passes from your 341(a) hearing. Please be aware that Krieger Law Group has no control over the Bankruptcy Court issuing discharge certificates.

In a Chapter 13, the clerk will enter a discharge after you have made all payments in accordance with your Chapter 13 plan. This generally takes a few months after your final Chapter 13 payment since the Trustee’s office performs accounting and final distribution tasks. Please understand that our office has no control over issuing your Chapter 13 discharge. However, if your plan is paid in full and you have not received your discharge after three months, please contact the clerk’s office at (702) 848-3855.

WHAT DO I NEED TO BRING TO MY NEXT APPOINTMENT

When you retained us. we provided you with a “TO BE BROUGHT BACK” list. You must provide our office with any listed documents (to the extent such items are applicable) at least two days prior to your next appointment. Failure to provide these items may result in rescheduling your next appointment and an incursion of additional fees. Accordingly, please ensure that you provide all requested documents.

DO I NEED TO CLOSE MY BANK ACCOUNT(S)?

No. But any funds remaining in your bank account on the filing date may be nonexempt property of your bankruptcy estate. In other words, the Trustee may seek to compel you to turnover any funds maintained in any of your bank accounts on your filing date, since cash items are generally not exempt. Accordingly, while we cannot advise you to incur new debt, you may consider ensuring your monthly rent, cell phone, and power/electric bills are made prior to your bankruptcy filing. Also, be aware that simply writing checks and mailing them to your creditors is generally insufficient to deplete your bank accounts. Until those drafts post to your account and the funds are withdrawn, you have money in your bank account that the Trustee wants. Instead, you may want to withdraw your funds and issue money orders for any bill payments. Keep track of all of these payments since the Trustee will likely request proof of how your bank account monies were disbursed – especially if a large sum is withdrawn close to your bankruptcy filing date.

Please keep in mind that you should not use bank account money to pay relatives, friends or creditors for preexisting debts or loans. The Trustee may seek to recover any monies paid to friends or relatives within two years of your bankruptcy filing. The Trustee accomplishes this by filing lawsuits against these people. You certainly don’t want to subject your friends or relatives to lawsuits, so it’s best not to make these transfers prior to filing your bankruptcy. However, if you have made such a transfer it must be disclosed to the bankruptcy court. We can still protect friends and relatives through Chapter 13 by repaying your creditors the amount that would have been recovered by the Chapter 7 Trustee.

WHAT IF I LOSE MY JOB OR MAKE A LOT MORE MONEY

Generally, if you lose your job or have a loss of income, then our office can propose a new Chapter 13 plan. Usually, if you miss one or two payments, then the Trustee will file a motion to dismiss your Chapter 13 case. However, if you advise our office of the circumstances and explain why you fell behind with your Trustee payments, then your modified plan may be confirmed. You will have to perform under your modified plan. Usually, this requires resuming monthly Trustee payments and providing a lump sum to catch up on arrears to show your good faith effort to remain in Chapter 13.

If your earnings increase significantly, the Trustee can petition the Court to dismiss your case or propose a modified plan. However, our firm’s position is that once the initial Chapter 13 is confirmed, all foreseeable issues are set in stone and your estate property, including future income, re-vests to you. Ultimately, you may be requested to make an additional distribution to unsecured creditors, but we can address that issue if it comes up. If something unforeseeable occurs, such as you winning the lottery, settling a large personal injury claim, or receiving a large inheritance, then your unsecured creditors are entitled to an additional distribution from these unforeseeable nonexempt proceeds. If this occurs, let our office know immediately so that we can discuss the best course of action for you.

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