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6151 Lakeside Dr.,  Suite 2100
Reno, NV  89511

Reno Bankruptcy Attorney

Stephen R. Harris, Esq.

“Providing Financial Protection for 46 Years”

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CHAPTER 7 – CONSUMER BANKRUPTCY

CHAPTER 7 – CONSUMER BANKRUPTCY

If I File for Chapter 7, What do I need to do in order to proceed?

Chapter 7 allows you to consider carefully whether bankruptcy is the right choice for you, and then gather the paperwork we talk about later in these FAQs. In order to be eligible to file bankruptcy, you must receive credit counseling within the 180 days prior to filing. Specifically, the law requires you to receive, from an approved agency, a briefing outlining the opportunities for credit counseling and help with a budget analysis. You may do this alone or in a group, and in person, on the phone, or even on the Internet.

If, due to an emergency, you are unable to obtain credit counseling services from an approved agency during a 5-day period, the court may excuse the requirement temporarily but you still must fulfill it within 30 days (or in some instances 45 days) after filing. If you use a bankruptcy attorney, he/she will most likely be able to help you complete this requirement.

You can find a list of approved non-profit budget and credit counseling agencies at the office of the United States Trustee or Bankruptcy Administrator, at the bankruptcy court Clerk’s office, or online at the links provided under Resources.

What documents do I need in order to file a Chapter 7 case?

Your lawyer will prepare the forms that you must file in a chapter 7 case. To prepare those forms, your lawyer will need certain information from you. The information you should take with you to your lawyer is listed below.

Information to Take With You When Consulting a Bankruptcy Attorney

A copy of every bill or letter you have received from a collection agency; A copy of any lawsuit or pleading you have received in a case in which you are involved; Two pay stubs representing an average pay period (include pay stubs for your spouse, even if he/she is not filing bankruptcy with you); Deeds to real estate in which you have any (even a partial) interest (including real estate you are purchasing or that you already own);

The original or memorandum title for any cars, trucks, trailers, boats, motorcycles, mobile or motor homes you own or are purchasing, or other documents showing the value of your assets; Appraisals of your home, jewelry, etc., if you have them; Any policies of life insurance you have on your life, and/or the life of your spouse or children (where possible, you should contact the agent who sold you the policy and find out if the policy has any “cash surrender value.” If your policy has “cash surrender value”, please provide your attorney with that value); and Income Tax Returns filed in the previous two years. You need to file these forms, all of which should be prepared by an attorney:

If you have property that secures a debt, such as a car or home, a Statement of Intention stating whether you plan to keep or give up the property; a certificate from the approved non-profit budget and credit counseling agency that describes the services provided to you and a copy of the debt repayment plan, if any, developed by that agency; a record of any interest that you have in an individual retirement account; and an analysis of the means test.

The bankruptcy petition; a list of creditors; a list of assets and liabilities; a list of current income and current expenditures; a statement of your financial affairs; a certificate from the attorney or bankruptcy petition preparer (if there is one) indicating that you received a notice describing the different bankruptcy chapters and the services available from the credit counseling agencies as well as a statement specifying that anyone who knowingly or fraudulently conceals assets or makes a false statement under oath is subject to fine, imprisonment or both (if no one assisted you, then you must file a certificate that such notice was received from the court and read by you);

Copies of all pay stubs received by you within 60 days before filing; a statement of your monthly net income itemized to show how it is calculated; and a statement disclosing a reasonably anticipated increase in income or expenditures over the following 12 months. If you fail to file all information noted above within 45 days of filing the petition, the court will dismiss your case. If your case is dismissed, you will lose the benefit of the automatic stay and your creditors can resume their collection efforts.

You will also have to file the following documents with the court. Again, your lawyer will help you with these.

What will happen in my Chapter 7 case after I file all of these documents?

Chapter 7 cases are pretty simple for the most part. In most cases, you will attend one creditors’ meeting and just wait for your discharge notice to come in the mail.

The bankruptcy Trustee runs the creditors’ meeting, which is also called a 341 meeting (named after the section of the bankruptcy law that requires the meeting), and will question you under oath about all the information contained in your bankruptcy documents.

If you and your spouse file a Joint Petition, you must both attend the creditors’ meeting and answer questions. It is important to cooperate with the trustee and to provide any records or documents requested.

In a simple case, the meeting will usually last just five minutes or so. While all creditors may attend, very few actually do. Be sure to bring a form of identification to the meeting, as well as proof of your Social Security number (usually your Social Security card). The trustee may ask you to provide additional documentation during the meeting and give you a few days to produce it.

The discharge notice will arrive in the mail about 60 days after you attend the creditors’ meeting. This piece of paper is proof that most of your debts have been discharged. You should keep it in a safe place.

I know there is a lot of information here so my advice is to call our office at (775) 786-7600 or (775) 690-2190 anytime to set up a complimentary and confidential consultation with me at your earliest convenience. You can also visit our new business Facebook Page for more information.

CHAPTER 7 – BUSINESS BANKRUPTCY

CHAPTER 7 – BUSINESS BANKRUPTCY

Helping Businesses Out of a Difficult Situation

Chapter 7 refers to the provision of the United States Bankruptcy Code that permits a business in financial distress to liquidate or sell its assets for the benefit of its creditors. When a business files a Chapter 7 petition it immediately ceases operations and a trustee is appointed to take control of its assets, sell those assets and distribute the proceeds to creditors. At the same time, creditors are automatically enjoined from starting or continuing any efforts to collect debts that are owed them.

The decision to file a Chapter 7 petition is usually the most difficult and painful decision a business ever has to make. This is particularly true for businesses with perhaps a single owner or a few owners who have invested years of their time, energy and resources in the business. However, it is often the only viable solution.

In the United Statesbankruptcy is governed by federal law, commonly referred to as the “Bankruptcy Code” (“Code”). The United States Constitution (Article 1, Section 8, Clause 4) authorizes Congress to enact “uniform Laws on the subject of Bankruptcies throughout the United States”. Congress has exercised this authority several times since 1801, including through adoption of the Bankruptcy Reform Act of 1978, as amended, codified in Title 11 of the United States Code and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).

Some laws relevant to bankruptcy are found in other parts of the United States Code. For example, bankruptcy crimes are found in Title 18 of the United States Code (Crimes). Tax implications of bankruptcy are found in Title 26 of the United States Code (Internal Revenue Code), and the creation and jurisdiction of bankruptcy courts are found in Title 28 of the United States Code (Judiciary and Judicial procedure).

Bankruptcy cases are filed in United States Bankruptcy Court (units[1] of the United States District Courts), and federal law governs procedure in bankruptcy cases. However, state laws are often applied to determine how bankruptcy affects the property rights of debtors. For example, laws governing the validity of liens or rules protecting certain property from creditors (known as exemptions), may derive from state law or federal law. Because state law plays a major role in many bankruptcy cases, it is often unwise to generalize some bankruptcy issues across state lines.

When Should I File Chapter 7 Petition?

Chapter 7 liquidation is generally a last resort after all other efforts have failed. If there is a way to resolve your debt problems and avoid bankruptcy by negotiating modifications of existing obligations, I will help you do that. However, if your business does not have sufficient prospects to continue operating, filing a Chapter 7 petition wiIl enable your business to shut down in an orderly manner and ensure that creditors are treated fairly and equitably.

Am I Responsible for the Debts of My Business?

A Chapter 7 petition relieves a corporation or a limited liability company of its debt obligations but it does not necessarily protect a sole proprietor or partner in a partnership from creditor claims for collection of the debts of the business. Even in the case of corporations, the principals of the business may have continuing liability for personal guarantees for payment of certain debts required by a creditor as a condition to providing goods or services or providing financing. In some instances, shareholders and owners may also be liable for the unpaid tax obligations of the business. If you are personally responsible for business debts, I can provide advice on how best to minimize those obligations.

For more information or to schedule a consultation with our Law Firm, call 775-690-9120.

Bankruptcy is an invaluable tool for financially troubled companies and their creditors. Unfortunately, it is too often a costly, time-consuming and uncertain process. It doesn’t have to be. I am committed to finding a way to make that process as efficient and successful as possible for our clients. I am passionate about practicing law in a way that is designed to produce the best possible results for our clients.

Bankruptcy can pave the way for a more secure retirement for debt-ridden older adults. It is natural to have many questions about the decision to file, especially when it involves factors like your social security income and retirement accounts. Call the Harris Law office today at 775-786-7600 for a free consultation, also visit our new Facebook Page for more information.

CREDIT CARD DEBT; EIGHT (8) NEGATIVE CONSEQUENCES OF TOO MUCH DEBT

CREDIT CARD DEBT; EIGHT (8) NEGATIVE CONSEQUENCES OF TOO MUCH DEBT

More than eight billion credit card offers are mailed to consumers each year. Most of us get several offers for new credit cards every week. In addition, credit cards are advertised everywhere. We see advertisements on television, the Internet, at sporting events, in restaurants, and increasingly on college campuses and even in high schools. In the past, you rarely got new credit card offers if you had credit problems.

Lenders reviewed credit reports and chose not to offer credit to consumers they considered bad risks. More recently, lenders buy huge mailing lists and offer credit to everyone on the list without an individual evaluation of their credit history.

They offer credit cards to anyone with an adequate credit score, whether or not you can afford the credit or are already over-extended. Credit card offers can be very enticing. Nearly every offer promises some special benefit with a new card. In some cases, the offer is for a low rate. In others, no annual fee is promised. Still others advertise free goods or services, low minimum payments, frequent flyer miles, cash back, special member privileges, and contributions to schools or favorite charities.

The Downside to Taking On Too Much Credit

  1. Avoid accepting too many offers. There is rarely a good reason to carry more than one or two cards. You should be very selective about choosing cards that are best for you. Having too much credit can lead to bad decisions and unmanageable debts. Opening too many new credit card accounts can also lower your credit score.
  2. Look carefully at the interest rate. You should always know the interest rate on your cards and should try to keep the rate as low as possible. It is often hard to do this, because the terms are so confusing and sometimes misleading. Credit card lenders usually have several interest rates for a credit card. They also constantly change their rates.
  3. Beware of subprime credit cards. Instead of turning you down because of bad credit, some lenders will offer you subprime credit cards. These cards generally come with very high interest rates, other expensive fees, and low credit limits
  4. Fees, fees, fees. Other terms of credit may be just as important as interest rates. Credit card companies now impose a number of different fees—late payment fees, fees for exceeding a credit limit, annual fees, membership fees, cash advance fees, balance transfer fees, even fees for buying lottery tickets with a card—and keep raising these fees every year. These fees significantly increase the cost of a credit card, so that a card that appears cheaper with a low APR could end up being much more expensive.
  5. Look for the grace period. Most credit cards offer a “grace period” or “free ride period,” the amount of time in which you can pay off purchases without incurring finance charges (cash advances usually do not have a grace period). Without a grace period, finance charges begin accruing immediately, and a low rate may actually be higher than it looks.

Avoiding Credit Card Problems

Do not use credit cards to finance an un-affordable lifestyle. If you are constantly using your card without the ability to pay the resulting bill in full each month, consider whether you are using your cards to make an unreasonable budget plan work. No one can live forever by borrowing without a plan to pay off the resulting debts. If you get into financial trouble, do not make it worse by using credit cards to make ends meet.

Finance charges and other fees will add to your debt burden. However, using a credit card in a period of financial difficulty is preferable to taking out a home equity loan and putting your home on the line.

Do not get hooked on minimum payments. If you pay only the minimum, chances are that you will not be paying down your debt, or that you will be paying it off very slowly. For example, a $1,000 balance with an 18% annual percentage rate will take nearly 20 years to pay off if you make a minimum payment of 2% of the monthly balance. Also, lenders reserve the right to increase the minimum payment at their option. This means that you can budget for a $50 minimum payment only to find out that the new minimum payment of $100 applies.

Do not run up the balance in reliance on a temporary “teaser” interest rate. Money borrowed during a temporary rate period of 6% is likely to be paid back at a much higher permanent rate of 15% or more. If you can afford to do so consistently with your budget plan, make your credit card payments on time. Avoid late payment charges and penalty rates if you can do so without endangering your ability to keep up with higher priority debts.

Many lenders will waive a late payment charge or default rates of interest one time only. It is worth calling to ask for a waiver if you make a late payment accidentally or with a good excuse. Avoid the special services, programs, and goods which credit card lenders offer to bill to their cards.

Most of the special services such as credit card fraud protection plans, credit record protection, travel clubs, life insurance, and other similar offers are a bad deal or are overpriced. Beware of unsolicited increases by a credit card lender to your credit card limit. Some lenders increase your credit limit even when you have not asked for more credit. Do not assume that this means that the lender thinks you can afford more credit. Lenders generally increase the limit for consumers that they think will carry a bigger balance and pay more interest.

Avoid cashed check loans. Another credit offer to avoid takes the form of a check mailed to your home, usually by your credit card lender. When you cash the check, you not only accept high interest rate credit, but also get stuck with a big balance on a new account right from the start.

Bankruptcy can pave the way for a more secure retirement for debt-ridden older adults. It is natural to have many questions about the decision to file, especially when it involves factors like your social security income and retirement accounts. Call the Harris Law office today at 775-786-7600 for a free consultation, also visit our new Facebook Page for more information.

A Fresh Financial Beginning: Four (4) Debts to Eliminate

A Fresh Financial Beginning: Four (4) Debts to Eliminate

Financial Beginning in General

A new Financial Beginning through Chapter 7 Bankruptcy in Nevada Chapter 7 bankruptcy, also known as “fresh start” bankruptcy, provides debt relief for honest people who are being crushed by overwhelming debt. Many people, from white-collar professionals to blue-collar auto workers, find themselves unable to keep up with credit card, medical or other debts after experiencing job loss, illness, divorce or other circumstances beyond their control.

If this is your situation, Chapter 7 bankruptcy can be an effective method of discharging most of your debt, giving you the fresh start you need. In addition, you will be able to keep your house, car and retirement savings in most cases.

In a Chapter 7 bankruptcy you can realize a new financial beginning. You can wipe out your debts and get a “Fresh Start”. Chapter 7 bankruptcy is a liquidation where the trustee collects all of your assets and sells any assets which are not exempt. (see Nevada Exemptions) The trustee sells the assets and pays you, the debtor, any amount exempted. The net proceeds of the liquidation are then distributed to your creditors with a commission taken by the trustee overseeing the distribution.

Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged. (see Nevada Non-Dischargeable Debts) In most Chapter 7 bankruptcy cases, the debtor has large credit card debts and other unsecured bills and very few assets. In the vast majority of cases a Chapter 7  bankruptcy is able to completely eliminate all of these debts.

You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts. To do so, you must sign a voluntary “Reaffirmation Agreement”. If you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt (or wipe-out) that debt again for eight years. You will still owe that debt and you must continue to pay it just as you were obligated to continue to pay it before you filed bankruptcy.

In order to reaffirm the debt, you must also bring it current. In other words, if you are three or four months behind, then you must pay the back payments which are due in order to reaffirm it. You can selectively reaffirm your debts – you can state that you wish to keep the house and the furniture, but that you want the car and the jewelry to go back to the respective Creditors.

For a new financial beginning, reaffirmation agreements can be set aside during the earlier of 60 days after the agreement is filed with the Court, or upon the Court’s issuance of an Order of Discharge.

When you work with us, we will begin by taking inventory of your financial situation and determine if you meet the income, asset and other eligibility requirements to qualify for Chapter 7 bankruptcy. We will take the time to explain the pros and cons of this option, as well as answer your questions about the legal process. If filing for Chapter 7 makes legal and practical sense for you, we will prepare your petition and financial schedules and proceed to file them with the bankruptcy court.

To obtain a fresh financial beginning at this point, an automatic stay will go into effect. This is a powerful debtor protection that requires creditor collection activity to cease, stopping calls, letters, home foreclosure actions and repossessions including stopping Any further communications from your creditors will have to go through our office instead. Chapter 7 bankruptcy is effective in eliminating many kinds of debt, including:

  • Credit Card Debts
  • Medical Debts
  • Lawsuits and Judgments
  • Pursuit of deficiencies after mortgage foreclosures or trustee sale

About 40 days after we file, we will attend a hearing with you called the “first meeting of creditors.” This is a court hearing where the chapter 7 bankruptcy trustee will review your petition and schedules and ask questions. Creditors, while invited, usually do not attend these meetings. This hearing is informal and nothing to worry about – Mr. Harris will be at your side. After this meeting, creditors have the opportunity to object to discharge of your debt and the trustee has the final opportunity to ask any more questions.

Approximately 90 days after the creditors’ meeting, the bankruptcy court will issue an order discharging your debts. Following the discharge, the administrative portion of your case continues for a year or more; however, your involvement as a debtor is largely over during that phase.

For over 45 years, Harris Law has successfully filed over 5,000 cases for people just like you. We understand and navigate the details of the Chapter 7 bankruptcy process. If Chapter 7 is not available to you because you exceed income or asset limits Chapter 13 or Chapter 11 may offer an effective debt relief solution. Call the Harris Law office today at 775-786-7600 for a free consultation, also visit our new Facebook Page for more information.

Chapter 7 and Chapter 13 Bankruptcies – Know the Negative and Positive Results of Both.

Chapter 7 and Chapter 13 Bankruptcies – Know the Negative and Positive Results of Both.

Chapter 7 Chapter 13 what property do I keep? Only exempt property, which usually means necessities. A Trustee appointed by the court will sell the rest of your property to pay people you owe (your Creditors). All of your property. You pay your debts out of future income. How much time does it take? Two to three months to three to five years. During this time, you will be paying people you owe a portion of what you owe them. How much does it cost? $299 to file the papers (the Petition) with the court.

You should hire a lawyer, and you will also have to pay that lawyer’s fees, which will depend on the lawyer. What happens to my credit report? Stays on your credit report for 10 years. Stays on your credit report for 7 years. What happens to my retirement account or pension if I file for bankruptcy? You will be allowed to keep it. Chapter 7: A Brief Overview Chapter 7 bankruptcy is liquidation. That means that a bankruptcy trustee will sell (“liquidate”) certain property that you own at the time you file the bankruptcy case.

The trustee uses the proceeds of the sale to pay creditors. In most cases, you will not have any assets that the trustee can sell because of state and federal laws that may allow you to keep necessities. These laws are called “Exemption Laws” and the property that the trustee may sell is known as “non-exempt” property. If all of your property is Exempt, the trustee will not sell any of your property.

About 90 days after you file chapter 7, most of your debts will be discharged, if yours is the typical case. This means you are no longer liable to pay the debt. Some debts are not discharged, however, and you still must pay them. Examples include past-due child support payments, some taxes and student loans. Debts for which you have pledged Collateral (such as cars, homes and household goods) also do not go away entirely in a bankruptcy.

Filing for bankruptcy allows you to discharge only the debts you list at the time of the bankruptcy case (your “pre-petition” debts). You must pay debts you incur after the filing the bankruptcy case as usual. You may keep the money that you earn after filing a chapter 7 bankruptcy cases, as well as most other property that you obtain after the filing.

Chapter 13: A Brief Overview Chapter 13 is very different. If you file under chapter 13, you may keep your property and you agree to pay your debts over time from your income, pursuant to a court-approved plan. The amount that you will repay to creditors under the plan will vary based on your particular circumstances.

The payments you make to creditors under the plan must total at least as much as creditors would have received if you filed a case under chapter 7. The payments are made to a trustee, who distributes the payments to the creditors.

The plan usually lasts until the end of a three- to five-year period. Your lawyer can tell you whether you will have to pay over three or five years. You receive a discharge at the completion of the plan.

Possible Alternatives to Chapter 7 or 13 Bankruptcy

Yes, there are many alternatives to filing bankruptcy, but there are always negatives and positives in trying to find an alternative solution to your financial problems and issues. Below is a list of pursuing possible alternatives and whether you need to consider the consequences of using these alternatives versus the bankruptcy filing.

  1. Restructuring your home mortgage loan(s).
  2. Taking out a home equity loan to pay debts such as credit card liabilities.
  3. Using funds from retirement accounts or borrowing against pension plans to lower your outstanding debts.
  4. Obtaining loans from relatives or friends.
  5. Taking a second or third job to increase your income.
  6. Renegotiation with creditors to reduce or extend the term on debts.
  7. Sell assets to pay down or fully pay debts.
  8. Do nothing and deal with the consequences of debt collectors and poor future credit ratings.

Because bankruptcy law is so complex, you would be well served to consult with an experienced bankruptcy lawyer to help you understand the consequences of taking any of these alternative routes. If you decide not to file for bankruptcy, an experienced bankruptcy attorney like myself will help you understand the consequences of various kinds of debt that you may have. Give us a call for a free consultation at 775-786-7600 and feel free to visit our Facebook Page for even more information.