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Reno, NV  89511

Reno Bankruptcy Attorney

Stephen R. Harris, Esq.

“Providing Financial Protection for 46 Years”

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Three (3) Adjustment of Debts – Essential for a Family, Farmer or Fisherman

Three (3) Adjustment of Debts – Essential for a Family, Farmer or Fisherman

Chapter 12 filing is for the single purpose of protecting family, farms, or fisherman with regular annual income.  A Chapter 12 filing not only allows for a stay of action against a co-debtor, but allows the adjustment of the debts, more than likely a large lien secured by the farms/family farm house, in such a way to allow the family farmer or the fisherman to retain the property.

Adjustment of Bankruptcy Fees

Chapter 7 bankruptcy costs you $335 in court filing fees, assuming it does not involve any kind of repayment plan. All attorneys’ fees must be paid before filing in these cases.

Attorney Fees are Public Record

That’s right — your attorney has to disclose his or her fees and any adjustment made thereupon and they’re available to the public. You can research any bankruptcy law firm’s fees on the federal PACER website. PACER costs $0.10 per page viewed and you can search either by bankruptcy district to get a general sense of the fees in your area of by specific law firm to get an idea of what a particular attorney will charge. Local rules may require additional disclosure, but at a minimum attorneys must list their fees on the Statement of Financial Affairs, which requires a list of:

… all payments made or property transferred by or on behalf of the debtor to any persons, including attorneys fees, for consultation concerning debt consolidation, relief under the bankruptcy law, or preparation of a petition in bankruptcy within one year immediately preceding the commencement of this case.

Average Cost of Chapter 7 Bankruptcy in Major Cities

So, let’s take a look at some PACER info on the actual bill for an attorney. We took a look at a random sample of Chapter 7 cases in a few major metro areas to get a sense of the bankruptcy attorney fees in each area. In Los Angeles, the tab ranged from $1,500 to $2,000. In Dallas, it was $774 to $1,820. In Miami, attorneys charged anywhere from $1,000 to $2,000, and in New York City, the bill was in the range of $1,000 to $2,200.

There’s a lot of adjustment and variation depending on the complexity of the case. In addition, many debtors qualify for free or discounted legal help, leading to even more variation.

One bankruptcy attorney in Los Angeles warns consumers to be on the lookout for competent, board-certified attorneys to handle their case. A bankruptcy is delicate, and you want someone with plenty of experience to represent you. A difference on the front end of a few hundred dollars could actually cost thousands in the long run, including refiling fees.

Chapter 13 filing fees are $274. These are cases in which you repay all or part of your debts over a period of time.

And finally, Chapter 11 cases have a filing fee of $1,717.

Generally, attorneys may charge in the range of $500-$1500 for simple Chapter 7 cases.  It is quite common for Chapter 13 cases to have fees of $2000-$4000 for the initial retainer before the filing and the balance paid out over a period of time or through the trustee’s disbursements. As the debtor make his monthly payment to the trustee, the trustee pays out the allowed administration fees including the attorney, taxes, and others in line with their priority.

Chapter 11 attorneys are generally chosen for their experience and record of success and are not confined usually by the attorney’s rates.

Your actual legal fees that an attorney would charge will depend on how much time is needed to resolve your case. Before 2005 and the new BAPCPA bankruptcy law, the “Bankruptcy Reform and Consumer Protection Act,” many attorneys quoted a flat fee and additional fees for, particularly complicated cases. Unfortunately, under BAPCPA, all cases are now complicated, and most attorney’s fees depend on the amount of time involved.

There are certain ways to have an adjustment to raise attorney fees in order to pay an attorney, in the most common way is to borrow against non-exempt assets, especially in a case of Chapter 11 filing.  Typically, in Chapter 13 bankruptcy or Chapter 7 filings, at least early on in the year, the Debtor may have access to tax refund money, which allows for payment of some or all those monies to the attorney to fund the bankruptcy filing.

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.

Bankruptcy: The Main 3 Types of Chapter Filings

Bankruptcy: The Main 3 Types of Chapter Filings

Why are there different kinds of bankruptcy? The United States Bankruptcy Code is broken up into several chapters, and each chapter was created to adapt to the circumstances of specific kinds of entities and individuals.  The bankruptcy chapters  that concern us here are for individuals and various kinds of business entities.

Chapter 7 – Straight Bankruptcy and Return of Exempt Properties Only

Chapter 7 individual bankruptcies allow the person filing for bankruptcy to keep all their exempt assets (assets so designated from being taken by creditors or the bankruptcy trustee) and discharges all their debts. For the bankruptcy trustee, the goal of Chapter 7 is to liquidate all of the nonexempt assets belonging to the bankruptcy estate.  Specifically, the bankruptcy trustee is appointed to gather all the nonexempt assets and sell those assets and distribute them pro rata to the creditors.

Chapter 7 filings can also include corporations and limited liability companies, general limited  partnerships and similar corporate businesses . The primary goal of the Chapter 7 is to discharge all of your outstanding debt that is eligible.  There are a number of rules of the bankruptcy law that limit your ability to do this and we will discuss some of those limitations in later chapters.

The chief reason many people file bankruptcy is to stay a foreclosure action on their home or investment property. The bankruptcy forestalls action and gives the debtor time to work out solutions to the impending foreclosure.  Another chief reason is to stay a lawsuit and  to remove it into the bankruptcy court.

Chapter 13 – Reorganizations for Individuals Only With Limited Claim Amounts

Chapter 13 filing is for individuals only, but there are strict eligibility requirements. You cannot have more than $383,175 in general unsecured creditor claims, or you cannot have more than $1,149,525 in secured claims. If you have more debts in either of these categories, you’re not eligible for a Chapter 13 filing.  

The primary goal of Chapter 13 is to keep significant nonexempt assets from being taken. For example, in Nevada, real estate prices in some cases fell as much as 50%. If you had relinquished these real estate assets in a bankruptcy near the bottom of their valuations, you would not have been able to reap the benefits of the significant rebound in the last 36 months. The assets would be gone and you would not have regained their value for sale at a later date.

Chapter 13 allows you to make partial payments to your creditors for 3 to 5 years, and it is aimed at discharging all of your remaining unpaid debts at the end of the repayment period. Chapter 13, in many instances, will allow you to retain some or all of your nonexempt assets, so long as you pay for the value of those nonexempt assets in your Chapter 13 repayment plan. Chapter 13 cases also allow for modification of secured debts, including lien stripping and lien strip downs under certain circumstances.

Chapter 13 is a filing that also allows protection from creditors’ collection actions pursuant to section 362 of the Bankruptcy Code, including a stay of any foreclosures pending at the time of the bankruptcy filing, until further orders of the bankruptcy court.

Means Testing

Since the rewriting of the Bankruptcy Code in October 2005, known as Bankruptcy Abuse Prevention and Consume Protection Act (BAPCPA), there have been significant changes in the Bankruptcy Code, making it harder for individuals to discharge their debt if they exceed certain income limitations. The 2005 bankruptcy law set up a requirement for “means testing”. It specified income limitations that dictated whether or not an individual must “means test” in a Chapter 7 or Chapter 13 filing.

The essential idea for means testing is that a formula determines whether you really can afford to pay some money to your creditors. If your “means test” indicates that you have surplus disposable income, your only option is to pay a portion of your debts in a three to five-year Chapter 13 plan. In Chapter 7, your debts are simply discharged by turning over any nonexempt property. If you failed to means test by earning too much to qualify for a Chapter 7, your Chapter 7 case can be dismissed by the court or alternatively, you may elect to convert to Chapter 13.

In the event of a single individual filing for bankruptcy, the limit of the dollar amount limitations on means testing is currently $42,988, which means that you will have to complete the means test analysis if you have annual gross income in excess of this amount.

For a family of two, the limitation is $56,160; for family size of three people, the limitation is $56,160; and for family of four people, the means testing amount is $62,636.

Social Security benefits are not counted for the purposes of the means test. Other income that is not counted toward the means test is payments to victims of war crimes or victims of terrorism. Just about everything else is considered income, whether it’s taxable or not, including wages, salary, fees, commissions, bonuses, retirement income, tax refund, income from business dealings, sale of assets, net rental income, your share of partnership income, inheritances, support payments, awards, prizes, gifts, insurance payments and services.

There is one major exception to the means test. That is, if more than 50% of your debt is for business debt, the petitioner does not have to comply with the means test. For example, I had an airline pilot who worked for a major airline, and he made in the neighborhood of $285,000 a year, and his annual expenses after taxes, were only about $80,000 to $100,000.

Therefore, he had about $4,000 to $6,000 a month in surplus income to pay creditors.  Since more than 50% of his debt was business-related, he did not have to comply with the means test requirements, which means he had $4,000 to $6,000 surplus income per month with which he did not have to pay his creditors.

Median Test

The first thing that you need to know is that the odds are you probably won’t have to take the means test at all, provided you pass the “median test”. The median test says if your income for the six months preceding bankruptcy is less than the median income for your state, then you’re home free. The basic theory behind the median test is that a debtor earning more than the median income should not be able to simply walk away from  his or her debts in Chapter 7, if they can pay a significant amount under a Chapter 13 repayment plan for three to five years. 

If you earn less than the median income, you don’t have to worry about the means test.  Again, the number one goal of means testing  is to force debtors to repay a portion of the outstanding debt by forcing them into a Chapter 13 bankruptcy, which requires some repayment over 3 to 5 years. 

Allowed Expenses

After you calculate your income for purposes of means testing, you just need to figure out what expenses are allowed by the court. There are certain IRS national and local standards that set forth standard expenses to determine how much expense is allowable. The allowable expenses are the amount you get to keep before making repayments of your surplus to your creditors.

Passing the Means Test by Showing Special Circumstances

Special circumstances include health insurance, disability insurance, health savings accounts, expense necessary to protect your family from domestic violence, home energy cost in  excess of IRS standards, expense for food and clothing for children above IRS standards, etc. If you have any of these, you might be exempt from the means test requirement.

Ways Around the Means Test

You might avoid the means test because of serious medical condition, call to the armed forces or special consideration for losing a high paying job.

Chapter 11 – Reorganizations for Individuals and Entities

Chapter 11 filings allow for individuals and business entities to file for reorganization, therefore allowing the petitioner to repay their general unsecured debts and their priority unsecured debts (such as taxes), over a period of time, such as five years.

Chapter 11 filings are usually for business debtors, either individuals or business entities, with business entities such as corporations, limited liability companies, partnerships etc. Chapter 11 filings are extremely complicated and time-consuming, but may be the way to go if you have substantial assets and you still want to exercise control them and survive financially.

Good example of Chapter 11 bankruptcy was General Motors, in 2008. They wanted to continue in business but needed time to reorganize their business to solve their businesses problems that lead to the downfall.  They were able to reorganize their business under the Bankruptcy Code and now are profitable organizations, employing thousands of direct employees and many more thousands of suppliers. Another example would be Enron.  Its objective was different.   Enron desired  to totally liquidate the company and its assets.

Of course, your company is probably not a massive multi-billion dollar enterprise, but you could still use the bankruptcy law to regain your financial balance, solve your creditor problems and continue in business. You can successfully use Chapter 11 bankruptcies as a strategic business tool.

Chapter 11 filings are a specialty unto their own. Most attorneys who concentrate on consumer bankruptcies have little experience in Chapter 11 cases. It is wise to seek out an attorney who has extensive experience in Chapter 11 business reorganization cases.

Experienced Chapter 11 attorneys need to be  well versed in the “cram down” provisions of the Bankruptcy Code, also called  a “forced acceptance,” which  is found in 11 U.S.C. §1129(b).  Not only are “cram down” situations involved, but an attorney must know the bankruptcy law and the bankruptcy judge to approach to contested confirmation hearing, in order to pursue reasonable loan extensions and adjustments in the interest rate.  Without knowing the relevant case law, the facts and the bankruptcy previously confirmed cases, it is impossible for an inexperience bankruptcy attorney to attempt a Chapter 11 and navigate a Chapter 11 case through the “Rocky Shoals” of Bankruptcy Law. 

In summary, the course of action involving cram down or a forced acceptance under certain terms and conditions are set forth in section 1129(a)(b) of the Bankruptcy Code. The provisions of the Bankruptcy Code governing Chapter 11 filings also allow for repayment of tax debt over a five year period commencing on the date of the assessment of the tax.  

Further, the bankruptcy court has the authority under section 507 to determine the validity, extent and amount of tax claims. In the instance of an individual filing Chapter 11 relief, a partial discharge of debt is allowed if the individual debtor contributes their disposable income over a five-year plan.

This may seem like a lot of information but it is designed to protect you. Give us a call at (775) 786-7600 or (775) 690-9120 for a free and confidential consultation to discuss your financial situation, alternatives to bankruptcy and the many details of filing for bankruptcy whether it be chapter 7, chapter 11 or chapter 13.

8 Alternatives to Filing for Bankruptcy?

8 Alternatives to Filing for 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 or not you need to consider the consequences of using these alternatives versus the bankruptcy filing.

Alternatives to 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 will help you understand the consequences of various kinds of debt that you may have.

Car Loans

In the event of default, the lender can repossess your vehicle and sell it to cover your outstanding car loan. Many times the sale proceeds are not enough to cover the debt, so you lose the car but still have the remaining deficiency balance that you owe. You may return the vehicle to the lender, but it will still negatively affect your credit. You may decide to try to sell the car yourself because you believe you can get more money for it in order to pay off the outstanding loan.  Selling your own car generally results in more money for the car than to allow repossession by the lender.

Home Loans

A mortgage lender cannot simply throw you out of your home when you make a late payment. The lender must first go through the foreclosure process to legally reclaim the home. In almost all cases, it will take a minimum of three to four months, and usually much more time than that to foreclose. You can live in the home until the foreclosure is completed. In many cases, you can negotiate with the lender some kind of alternative or modification to the original loan.

Alimony and Child Support

Because these support obligations are not usually dischargeable in bankruptcy, you need to thoroughly examine the effects that bankruptcy will or will not have on your financial future. This is an extremely sticky area that will vary widely, depending on children, custody, your income, previous obligations made under a divorce settlement, and possibly many other factors.

Taxes

Have you filed all the appropriate tax returns with all the appropriate taxing authorities? If not, it is extremely important to file those tax returns and to find out what your tax obligations are, possible penalties, and interest that you owe, before filing for bankruptcy. Some taxes may be dischargeable or reduced through offers in compromise and other forms of negotiation with the tax collector.  More importantly, most net operating losses (“NOL”) disappear after filing for bankruptcy to the extent of discharged indebtedness resulting from bankruptcy.

Student Loans

This is another case where past obligations will not just disappear with the passage of time.

Fines, Fraud and Restitution

Many obligations that are predicated on fraud or arise from fines and restitution orders, generally do not go away in the bankruptcy, and are best to be negotiated with the appropriate litigants or governmental agencies. 

Passage of Time

Most debts will eventually expire under a statute of limitations. In many cases, after six years, you may no longer have to pay the debt if the creditor does not sue you within that time period. Unfortunately, if you are sued and a creditor wins, i.e. obtains a judgment against you, some judgments can last as long as 20 years. The real problem here is to figure out when the statute of limitations starts on each kind of debt. Can you deal with debt collectors for years in the future?

This may seem like a lot of information but it is designed to protect you. Give us a call at (775) 786-7600 or (775) 690-9120 for a free and confidential consultation to discuss your financial situation, alternatives to bankruptcy and the many details of filing for bankruptcy whether it be chapter 7, chapter 11 or chapter 13.

The Eight (8) Building Blocks & Benefits of Bankruptcy

The Eight (8) Building Blocks & Benefits of Bankruptcy

Benefits of bankruptcy may seem like an oxymoron and I know it’s an unusual way to start a blog about bankruptcy strategies with detailing its benefits, but today, filing bankruptcy is an acceptable way to address one’s financial challenges and is an accepted business tool when used strategically.  Bankruptcy is no fun, but it is a perfectly legitimate business tool sanctioned by the bankruptcy laws of the United States of America, and it was created to give people a fresh start.

Rather than having endless debt hanging over your head for the rest your life or for many distant years to come, bankruptcy laws are designed to give you or your business a way to start over, and in some ways it can also benefit creditors.  Filing bankruptcy is not the end of the world.

Let’s do a quick review of when filing bankruptcy will help immediately, and also discuss those areas in which it generally does not help.

Benefits of Bankruptcy:

  1. Stay real property foreclosures.
  2. Stay personal property sales and automobile repossessions.
  3. Stay and prevent garnishment of wages after you file.
  4. Bring IRS enforcement actions to stop.
  5. Stay some landlord evictions.
  6. Stay almost every kind of civil lawsuit.
  7. Prevent your driver’s license from being pulled for unpaid judgments or fines.
  8. Depending on the type of bankruptcy filing, you might discharge many old debts and or greatly reduce many other debts, including some IRS obligations that are more than three years old from the date of filing the tax return.

Sometimes bankruptcy can be used to pay all or some of your debts over time. If some of the debts do get discharged, you usually have more money to pay off those remaining debts or other liabilities that cannot be wiped out or discharged in bankruptcy, such as student loans or fresh IRS tax liabilities.

Although bankruptcy will help you with the items listed above, there are number of debts that will not be discharged, or wiped away. They include:

  • Alimony and child support.
  • Student loans.
  • Debts arising from fraud and misrepresentation.
  • Financial repayments imposed on you by a criminal conviction.
  • Tax debts arising during the last three years from the date of filing the tax return.
  • Damages as a result of personal injury while you were illegally driving under the influence of drugs or alcohol.
  • For fraud or defalcation cases while acting in  a fiduciary capacity, embezzlement, or larceny
  • For willful and malicious injury by the debtor to another entity or to the property to another entity
  • To a spouse, former spouse, or child of the debtor, that is incurred by the debtor in the course of the Divorce  or separation  or in connection with a separation agreement, divorce decree or other order of the court of record or a determination made in accordance with the State or territorial laws  by a government unit

  Although filing bankruptcy will give you time to reorganize and regroup your finances and as discussed there are some benefits of bankruptcy, it usually will not prevent or stay:

  • Contempt of court hearings.
  • Criminal prosecutions.
  • Actions to collect back child support or alimony, unless you file Chapter 13 plan proposed to pay these obligations over the life of your Chapter 13 repayment plan.
  • Certain governmental regulatory actions.

What You Will Lose in a Bankruptcy Filing:

You can use the benefits of bankruptcy to get a fresh start, but that fresh start may come with some baggage, such as the following:

  • Some people or employers may discriminate against you for filing bankruptcy, even though technically they aren’t supposed to.
  • Relationships with your parents, your spouse and others may be strained.
  • Sometimes because of actions that you have taken immediately prior to filing bankruptcy, friends and relatives and business associates may be forced to repay the bankruptcy trustee money that you have given them as repayment of debts within one (1) year of filing the bankruptcy for insiders, and ninety (90) days of filing the bankruptcy for non-insiders.  Many times this can be avoided by careful timing of the bankruptcy filing.
  • Needless to say, bankruptcy does affect your credit rating. Many bankruptcy filers can start to reestablish credit immediately, but normal timing for credit rehabilitation takes at least three (3) years. Usually you will pay higher interest rates on newly established credit.
  • Since bankruptcy is a legal proceeding, it is public record. Public records are easily searchable and therefore it makes you susceptible to easy investigation.  All of the bankruptcy pleadings associated with your bankruptcy case are on electronic PACER – available for all to see.
  • You may lose some of your assets, primarily those assets that are deemed non-exempt. In most bankruptcies, because of the exemptions included in the bankruptcy law, you probably will not give up any of your belongings or retirement savings.

The benefits of 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.

Basic Bankruptcy Procedures: In 8 Steps.

Basic Bankruptcy Procedures: In 8 Steps.

1. If I decide to file for bankruptcy, what do I have to do before I file?

Today, you simply need 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.

2. What documents do I need to file in 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:

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.

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.

3. What will happen in my chapter 7 case after I file all 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.

4. Are there additional documents and other requirements in a chapter 13 case?  What is required in the chapter 13 plan?

If you are filing a chapter 13 case, rather than a chapter 7, in addition to the documents mentioned above, you must file a plan that describes how much you will pay your creditors and over what time period. Your plan must provide that you pay creditors at least what they could have received in chapter 7 liquidation case, which basically means creditors must receive payments equal to the value of your non-exempt assets. Your lawyer will prepare your plan.

In addition, the plan must provide that you contribute all your “disposable income” to the plan. Disposable income is the income above what is necessary for the support of you and your family. However, in many cases the means test formula determines that amount. The means test is a very complicated test, but essentially requires that you average your income over the past six months (from any source including regular gifts from family members), then deduct a series of allowed expenses, and see what is left to pay creditors. You will need an attorney to complete this analysis.

The chapter 13 plan lasts until the earlier of you pay your debts in full or the end of a three- to five-year period. If your income is below your state’’s median income, the maximum plan period without court approval is three years. If your income is not below your state’s median income, creditors may be able to insist that the debtor pay a five-year plan.

Within 30 days of filing your petition, you must begin making payments under your plan. You make the payments to a trustee, who distributes the payments to the creditors.

Like in a chapter 7 case, after filing the bankruptcy petition, you must attend a creditors’ meeting (also known as a 341 meeting, named after the section of the bankruptcy law that requires the meeting). The chapter 13 trustee will conduct the meeting and will question you under oath about the paperwork you filed in your case. This creditors’ meeting will last longer than a meeting in a chapter 7 case. The trustee will likely question you about your income and your expenses, and may also require additional documentation at the meeting.

After the meeting of creditors, you, the chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on your chapter 13 plan. If there are no problems, the court will approve (“confirm”) your plan.

After completing payments under the plan and completing any financial counseling required, you will receive a discharge of any debts not paid under the plan.

5. Must I produce tax returns before and after my bankruptcy?

Yes. You must provide the trustee and/or any creditor with copies of any federal tax return that you filed for the year prior to filing. If you do not comply with this request, the court may dismiss your bankruptcy case.

You must also file copies of any federal tax returns filed during the case with the bankruptcy court.

Any taxing authority may request dismissal of a bankruptcy case if you fail to file all required tax returns.

6. Do I have to list all creditors on the bankruptcy Schedules?

Yes. You must list all your debts, with the name and address of the creditors. This is so creditors receive notice of the bankruptcy and get their fair share of any money paid to creditors. You may think that you should omit a creditor because you want to continue to pay the debt. This would violate the law, and it is unnecessary because you can always choose to pay a debt voluntarily, even though the debt has been discharged and there is no legal obligation to make payment. However, creditors are prohibited from taking any action to collect discharged debts.

7. What should I do if I discover that I forgot to list a creditor in the bankruptcy Schedules?

You should notify your attorney and provide him or her with all the information necessary to complete the schedule (the amount of the debt, the type and value of any collateral, and the name and address of the creditor). This is very important, because if you do not list a debt on your schedules, that debt might not be discharged. That means you will be required to pay the debt in full after bankruptcy.

If an omitted creditor demands payment of the debt, you should inform the creditor of the bankruptcy, as discussed below.

8. What should I do if a creditor demands payment of a debt after I file my case?

Most efforts by a creditor to collect a pre-petition debt (one that you owe as of the filing of your case) or to repossess your property without the permission of the bankruptcy court are violations of the automatic stay. If a creditor repossesses any property, such as your car, after you file for bankruptcy, the creditor must return the property to you.

The court may punish a creditor who knowingly violates the automatic stay and the creditor is liable to the debtor for harm caused. If you did not list a debt on the schedules filed with the court, the creditor may not be on notice of the bankruptcy. Therefore, you should inform the creditor of your bankruptcy and request that the creditor stop the collection efforts.

If you are represented by an attorney, you should give the creditor your attorney’s name and telephone number. If you are not represented by an attorney, you should give the creditor additional information about the case, the date of filing, the court in which the case was filed and the case number. If improper collection action continues, you should consult with an attorney, notify the trustee or seek protection from the court.