April 22, 2018

Basic Principles of the CT Child Support Guidelines

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“The Connecticut Child Support Guidelines are based on the Income Shares Model. The Income Shares Model presumes that the child should receive the same proportion of parental income as he or she would have received if the parents lived together. Underlying the income shares model, therefore, is the policy that the parents should bear any additional expenses resulting from the maintenance of two separate households instead of one, since it is not the child’s decision that the parents divorce, separate, or otherwise live separately.

The Income Shares Model has proven to be the most widely accepted, particularly due to its consideration of the income of both parents. Thirty eight states follow the Income Shares Model. Four states and the District of Columbia have shifted over to the Income Shares Model since Connecticut last revised its guidelines in 2005. The other models used by states are “Percentage of Obligor Income” (ten states) and “Melson Formula” (three states). The Income Shares Model reflects presently available data on the average costs of raising children in households across a wide range of incomes and family sizes. Because household spending on behalf of children is intertwined with spending on behalf of adults for most expenditure categories, it is difficult to determine the exact proportion allocated to children in individual cases, even with exhaustive financial affidavits. However, a number of authoritative economic studies based on national data provide reliable estimates of the average amount of household expenditures on children in intact households. These studies have found that the proportion of household spending devoted to children is systematically and consistently related to the level of household income and to the number of children.

In general, the economic studies have found that spending on children declines as a proportion of family income as that income increases. This spending pattern exists because families at higher income levels do not have to devote most or all of their incomes to perceived necessities. Rather, they can allocate some proportion of income to savings and other non-consumption expenditures, as well as discretionary adult goods. This principle was reflected in past guidelines, since 1994, and is continued in these guidelines. Again, following the pattern of prior guidelines declining percentages at all levels of combined net weekly income begin outside the darker shaded area of the schedule. However, the commission had no economic data that supports a conclusion that this pattern continues when parents’ net weekly income exceeds $4,000. This commission therefore decided to not extend either the range of the schedule or the application of the concept of declining percentages beyond its current $4,000 upper limit.

Economic studies also demonstrate that a diminishing portion of family income is spent on each additional child. This apparently results from two factors. The first is economy of scale. That is, as more children are added to a family, sharing of household items is increased, and fewer of those items must be purchased. The second is a reallocation of expenditures. That is, as additional children are added, each family member’s share of expenditures decreases to provide for the needs of the additional members.

Based on this economic evidence, adjusted for Connecticut’s relatively high income distribution (as explained later in this preamble), the guidelines allow for the calculation of current support based on each parent’s share of the amount estimated to be spent on a child if the parents and child live in an intact household. The amount calculated for the custodial parent is retained by the custodial parent and presumed spent on the child. The amount calculated for the noncustodial parent establishes the level of current support to be ordered by the court. These two amounts together constitute the current support obligation of both parents for the support of the child. Intact households are used for the estimates because the guidelines aim to provide children the same support they would receive if the parents lived together. More than this, however, support amounts would be set unduly low if based on spending patterns of single-parent families, as they generally experience a high incidence of poverty and lower incomes than intact families.”

Source: The Connecticut Child Support Guidelines

For more information, please contact us here.

Administration and Operation of the [Connecticut] Courts

The Chief Justice of the Supreme Court is the head of the Judicial Branch. Its administrative director is called the Chief Court Administrator.

Judicial Functions
The judicial functions of the Branch are concerned with the just disposition of cases at the trial and appellate levels. All judges have the independent, decision-making power to preside over matters in their courtrooms and to determine the outcome of each case before them.

Administrative Operations
The Chief Court Administrator is responsible for the administrative operations of the Judicial Branch. In order to provide the diverse services necessary to effectively carry out the Judicial Branch’s mission, the following administrative divisions have been created: Administrative Services Division | Court Support Services Division | External Affairs Division | Information Technology | Superior Court Operations

 

Administrative Services Division – Provides a wide array of centrally conducted, statewide services for the benefit of all divisions within the Judicial Branch, such as data processing, financial services, personnel matters and facilities management.

Court Support Services Division

  • Office of Adult Probation – Conducts presentence investigations ordered by the Superior Court and supervises probationers in all cases except juvenile matters.
  • Office of Alternative Sanctions – Creates and sustains a full range of alternatives to incarceration for both pre- and post-conviction adult and juvenile populations.
  • Bail Commission – Interviews and investigates individuals accused of crimes to assist the Superior Court in determining terms and conditions of pretrial release.
  • Family Services Division – Assists the Superior Court in the resolution of problems and the adjudication of cases involving family relationships, family support, child protection and juvenile delinquency. Among the services provided by the Family Division are: mediation of domestic disputes, evaluation of child custody and visitation conflicts, juvenile probation services, divorce counseling, residential placement, restitution and community services.
  • Division of Juvenile Detention Services – Provides pretrial secure detention and programming services to juveniles accused of delinquent acts.

External Affairs DivisionCoordinates a variety of legislative, educational and informational activities designed to inform and educate the public and private sectors about the mission, activities and goals of the Judicial Branch.

Information Technology Division –
The Information Technology (IT) Division consists of:

  • The Commission on Official Legal Publications (COLP) – COLP prints and distributes all Judicial publications including such things as the Connecticut Law Journal, Connecticut Reports, the Connecticut Practice Book and official court forms.
  • Judicial Information Systems (JIS) – JIS is responsible for Applications Development and Support, Network and Systems Support, Architecture & Standards as well as Service & Delivery Support.

Superior Court Operations – The Superior Court Operations Division includes the following:

  • Administration – Provides support services and guidance to all segments of the Division by directing the administrative, strategic planning, staff training and business activities, and provides for court transcript services, interpreter services, and the preservation and disposition of seized property; and, the maintenance, retrieval and destruction of records.
  • Court Operations – Ensures that the Superior Court Clerk’s offices process all matters in accordance with Statutory, Practice Book and Judicial Branch policy provisions in an efficient and professional manner through the provision of technical assistance and support services including the Centralized Infractions Bureau and Jury Administration.
  • Judge Support Services – Ensures the prompt delivery of services and programs to Superior Court judges and Family Support Magistrates pertaining to law libraries, legal research, judicial performance evaluations, continuing education and support for technology; and manages grants program.
  • Legal Services – Determines legal issues and provides support services in the areas of attorney ethics, discipline and bar admission.
  • Support Enforcement Division – Enforces, reviews and adjusts family support orders in accordance with federal and state regulation, rules and statutes.
  • Office of Victim Services – Advocates for victims of crime, arranges services, provides assistance and financial compensation.

(Reposted from the Connecticut Judicial Branch Website)

New Bankruptcy Form, Rules Take Effect

Individuals filing for bankruptcy under Chapter 13 must use a new form that presents their payment plan in a more uniform and transparent manner, and creditors will have less time to submit a proof of claim, under new bankruptcy rules and form amendments that took effect Dec. 1.

By creating greater uniformity of where specific types of information must be entered, the new national Chapter 13 plan form will make it easier for creditors, lawyers and judges to ensure that all elements of a bankruptcy agreement reached under Chapter 13 comply with federal laws. Chapter 13, sometimes known as the wage earner’s plan, enables qualified individual filers to reschedule and make debt payments, allowing them to keep their homes and other property.

Bankruptcy courts previously had relied on local versions of Chapter 13 plans, which varied from district to district, in resolving Chapter 13 cases. They now must either use a new national Bankruptcy Form 113, or create a locally adapted form that contains key elements of the national form. In recent months, courts have been updating electronic filing systems and notifying local bankruptcy lawyers and filers of the pending changes.

The deadline for creditors to file a proof of claim was revised in an amendment to Federal Rules of Bankruptcy Procedure 3002.

The new deadline will affect bankruptcies filed under Chapter 7, in which debtors liquidate assets; Chapter 12, which enables family farmers and fishermen to restructure their finances; and Chapter 13. Previously creditors had 90 days after an initial meeting of creditors was held. Now, a proof of claim must be submitted within 70 days of the filing of a bankruptcy petition.

Federal rules amendments typically follow a three-year process, which includes multiple layers of review and extensive public comment.

In April, the Supreme Court transmitted the new rules regarding bankruptcy, as well as amendments to Appellate and Civil Rules of Procedure, and Rules of Evidence, to Congress. The new rules took effect Dec. 1 when Congress did not act to prevent their implementation.

Find a full list of the new rules and form amendments and the Current Rules of Practice and Procedure. Find additional information about the bankruptcy process.

(Re-posted from http://www.uscourts.gov/news/2017/12/01/new-bankruptcy-form-rules-take-effect)

Process – Bankruptcy Basics

Article I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies.” Under this grant of authority, Congress enacted the “Bankruptcy Code” in 1978. The Bankruptcy Code, which is codified as title 11 of the United States Code, has been amended several times since its enactment. It is the uniform federal law that governs all bankruptcy cases.

The procedural aspects of the bankruptcy process are governed by the Federal Rules of Bankruptcy Procedure (often called the “Bankruptcy Rules”) and local rules of each bankruptcy court. The Bankruptcy Rules contain a set of official forms for use in bankruptcy cases. The Bankruptcy Code and Bankruptcy Rules (and local rules) set forth the formal legal procedures for dealing with the debt problems of individuals and businesses.

There is a bankruptcy court for each judicial district in the country. Each state has one or more districts. There are 90 bankruptcy districts across the country. The bankruptcy courts generally have their own clerk’s offices.

The court official with decision-making power over federal bankruptcy cases is the United States bankruptcy judge, a judicial officer of the United States district court. The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts. Much of the bankruptcy process is administrative, however, and is conducted away from the courthouse. In cases under chapters 7, 12, or 13, and sometimes in chapter 11 cases, this administrative process is carried out by a trustee who is appointed to oversee the case.

A debtor’s involvement with the bankruptcy judge is usually very limited. A typical chapter 7 debtor will not appear in court and will not see the bankruptcy judge unless an objection is raised in the case. A chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing. Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors, which is usually held at the offices of the U.S. trustee. This meeting is informally called a “341 meeting” because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.

A fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision:

[I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.

Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This goal is accomplished through the bankruptcy discharge, which releases debtors from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts. This publication describes the bankruptcy discharge in a question and answer format, discussing the timing of the discharge, the scope of the discharge (what debts are discharged and what debts are not discharged), objections to discharge, and revocation of the discharge. It also describes what a debtor can do if a creditor attempts to collect a discharged debt after the bankruptcy case is concluded.

Six basic types of bankruptcy cases are provided for under the Bankruptcy Code, each of which is discussed in this publication. The cases are traditionally given the names of the chapters that describe them.

Chapter 7, entitled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor’s assets. These cases are called “no-asset cases.” A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, if the debtor is an individual, he or she receives a discharge that releases him or her from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed. Amendments to the Bankruptcy Code enacted in to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 require the application of a “means test” to determine whether individual consumer debtors qualify for relief under chapter 7. If such a debtor’s income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief.

Chapter 9, entitled Adjustment of Debts of a Municipality, provides essentially for reorganization, much like a reorganization under chapter 11. Only a “municipality” may file under chapter 9, which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.

Chapter 11, entitled Reorganization, ordinarily is used by commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization. The chapter 11 debtor usually has the exclusive right to file a plan of reorganization for the first 120 days after it files the case and must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan. The court ultimately approves (confirms) or disapproves the plan of reorganization. Under the confirmed plan, the debtor can reduce its debts by repaying a portion of its obligations and discharging others. The debtor can also terminate burdensome contracts and leases, recover assets, and rescale its operations in order to return to profitability. Under chapter 11, the debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.

Chapter 12, entitled Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income, provides debt relief to family farmers and fishermen with regular income. The process under chapter 12 is very similar to that of chapter 13, under which the debtor proposes a plan to repay debts over a period of time – no more than three years unless the court approves a longer period, not exceeding five years. There is also a trustee in every chapter 12 case whose duties are very similar to those of a chapter 13 trustee. The chapter 12 trustee’s disbursement of payments to creditors under a confirmed plan parallels the procedure under chapter 13. Chapter 12 allows a family farmer or fisherman to continue to operate the business while the plan is being carried out.

Chapter 13, entitled Adjustment of Debts of an Individual With Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a “plan” to repay creditors over time – usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief under the means test. At a confirmation hearing, the court either approves or disapproves the debtor’s repayment plan, depending on whether it meets the Bankruptcy Code’s requirements for confirmation. Chapter 13 is very different from chapter 7 since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor’s anticipated income over the life of the plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The discharge is also somewhat broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.

The purpose of Chapter 15, entitled Ancillary and Other Cross-Border Cases, is to provide an effective mechanism for dealing with cases of cross-border insolvency. This publication discusses the applicability of Chapter 15 where a debtor or its property is subject to the laws of the United States and one or more foreign countries.

In addition to the basic types of bankruptcy cases, Bankruptcy Basics provides an overview of the Servicemembers’ Civil Relief Act, which, among other things, provides protection to members of the military against the entry of default judgments and gives the court the ability to stay proceedings against military debtors.

This publication also contains a description of liquidation proceedings under the Securities Investor Protection Act (“SIPA”). Although the Bankruptcy Code provides for a stockbroker liquidation proceeding, it is far more likely that a failing brokerage firm will find itself involved in a SIPA proceeding. The purpose of SIPA is to return to investors securities and cash left with failed brokerages. Since being established by Congress in 1970, the Securities Investor Protection Corporation has protected investors who deposit stocks and bonds with brokerage firms by ensuring that every customer’s property is protected, up to $500,000 per customer.

The bankruptcy process is complex and relies on legal concepts like the “automatic stay,” “discharge,” “exemptions,” and “assume.” Therefore, the final chapter of this publication is a glossary of Bankruptcy Terminology which explains, in layman’s terms, most of the legal concepts that apply in cases filed under the Bankruptcy Code.

Reprinted from http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/process-bankruptcy-basics

CONTEMPLATING A BANKRUPTCY AFTER DIVORCE

Oftentimes Bankruptcy and Divorce go hand-in-hand.  If you are in the process of getting divorced, it would be wise to consult a consumer attorney to analyze your financial circumstances, ensuring all of your obligations will be accounted for in the Divorce Decree/Separation Agreement, and to determine if you can handle paying them once you go back to a single income after the divorce.  Bankruptcy may be a safe option once you are divorced if you find you cannot afford living on a single income.

If you will be taking the bulk of the debt once you separate and do not have the income to support it, you may consider filing for bankruptcy and starting over all together once the divorce is finalized.  Here are some topics that often arise from divorce when contemplating a bankruptcy or may lead you to file for bankruptcy after your divorce:

  1. Who will take the marital home and pay its related expenses?

If you are getting a divorce and taking over possession of the marital home, along with taking over the related expenses, especially the mortgage(s) on the home, be sure to have your Divorce Decree state the terms of this transfer accurately.

Also, making a budget before the divorce is final will help you determine if you will be able to afford to stay in the home.

If it is determined that you can, in fact, afford to live in the home after the divorce, then make sure the proper documents are recorded on the Land Records after the transfer.  This will give you a paper trial you may need to provide in your bankruptcy case later on.

  1. Will you be responsible for credit cards in your ex-spouses name?

If so, make sure the Divorce Decree/Separation Agreement spells out all debt you will be taking responsibility for once the divorce is final, along with the last four digits of any account numbers.  Once the divorce is final, be sure to contact each company in writing and have the accounts switched into your name.  Wait at least six weeks and then review your credit report(s) to ensure accurate reporting, so as not to inadvertently leave off a debt you are responsible for on your Bankruptcy petition, among other things.

  1. Will you be ordered to pay alimony or child support?

Keep in mind, that these particular types of “debts” are allowable deductible expenses in your Bankruptcy case; this means that they are taken into consideration when qualifying for Bankruptcy.  Also, it is important to note that court-ordered Alimony and Child Support are what is known in the Bankruptcy realm as “priority debts” and cannot be discharged in most cases.  (Taxes and loans involving the government are also included in the priority category.)  It is vitally important to have all obligations in this category fully defined and explained in your Divorce Decree/Separation Agreement, as you will likely be fulfilling these obligations regardless of ever filing for Bankruptcy.

Filing for bankruptcy after a divorce is not the end of the world.  In fact, it may be the best thing that ever happened to you, and will help you to move on and start fresh.

My Gift to You and Yours!

 

Everyone over the age of 18, especially parents of young children, need a simple Will, Living Will and Power of Attorney (these documents together are formally called an “Estate Plan”).

Estate Planning can be given as a gift to others and/or it makes a great New Year’s Resolution for yourself.

As a mother, and an attorney, the importance of planning for the future is at the top of my list!

Therefore, my gift to you this holiday season is 25% off all estate planning packages for the month of January 2017.  Please feel free to share this with your friends and family.

The process of making an Estate Plan is as easy as 1-2-3: First we talk, then I create the documents and lastly, you come in to visit me and sign them.

To arrange a free consultation in person or over the phone, call our office at 203-713-8877.

Have a Safe and Happy Holiday!

With much love & gratitude,
Theresa Rose DeGray
Attorney at Law

PS: Stay tuned for lots of exciting announcements, information, seminars, videos, blogs and much more in 2017!

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Information on Probate Bonds

Taking on the role of the executor during the probating of a loved one’s Will can be a big job. As the executor, you are responsible for putting the deceased’s affairs in order and distributing property and assets to the rightful inheritors. In last week’s post, I talked about fiduciary duty – the requirement for being an executor that states that you will be fair and honest in your role as executor. Unfortunately, sometimes executors make mistakes or even purposefully tamper with the distribution of property and assets. For this reason, executors generally have to pay a probate bond in order to protect both creditors and heirs from accidental or purposeful negligence on the part of the executor.

We all know what a regular bail bond is. If someone is arrested for a crime, depending on the severity of this crime, they can post bail and be released from jail until their court date. A bond is paid when the accused gives money to the court as a condition of his or her return. For example, if bail is set at 10,000, the accused will have to give the court $10,000 in order to be released. If he or she does not return for trial, he or she forfeits the money given as the bond. The concept behind a probate bond is similar. In order to ensure that the executor does not take money that was supposed to be given to heirs or creditors for him or herself, a Judge will oftentimes order a probate bond to be paid by the executor as an act of good faith. If the executor is in charge of a $20,000 estate, he or she will have to pay a bond of $20,000. The executor will get this money back if and when the property and assets are distributed properly. If they are not, the heirs and creditors get to keep the probate bond.

Problems with Probate Bonds

While protecting the creditors and heirs and ensuring that they get what they are entitled to is a good thing, sometimes obtaining money for a probate bond can be difficult. An executor raising money for a probate bond will in many cases have to essentially take out a loan to pay for the bond. This is tricky because the executor can be denied the loan, the loan can take a long time to obtain, and the executor oftentimes has to add more money to the bond if years go by and the estate is not settled. This can put a lot of pressure on the executor.

Waiving the Probate Bond

Because there are so many potential problems with probate bonds, many attorneys will waive the bond requirement when they draft Wills. Another way that the bond can be waived is if all of the heirs agree to have this done. For example, if “Ben”, the executor of his mother’s Will is an heir to the Will along with his two brothers, all three brothers can agree to trust that Ben will fulfill his duties as executor and they can waive the probate bond.

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In theory, probate bonds are useful, as they protect the interests of the heirs and creditors while a Will is probated. However, in practice, the money for probate bonds can be difficult to raise, and if the executor is a loved one, the bond is oftentimes unnecessary. For more information about probate bonds, contact me here.

Introduction to the Probate Process

The death of a loved one can be an incredibly devastating and traumatic time for close family and friends. Unfortunately, the mourning process is oftentimes complicated by things like planning the wake, planning the funeral, choosing a coffin, making sure the burial plot is in order, writing the obituary, etc. Once all of the wake and funeral arrangements are made, there is still the issue of distributing property and assets based on the Will left behind. While this might seem an unpleasant and overwhelming task, it is important to “probate” the Will. This article will cover the basics of that process.

Probating a Will basically means executing the deceased’s wishes in the Will. If the deceased owned property, it will be distributed based on the Will that he or she left behind. Probating the Will essentially means passing property titles onto heirs and determining how the assets will be divided among family members.

To probate a Will, an executor is determined. This person is in charge of managing the distribution of property based on the deceased’s Will. Basically, the executor just has to follow the instructions left by the deceased and make sure that his or her interests are honestly represented and carried out.courts

Probate can be a long and expensive process depending on what the deceased (referred to as the decedent) left behind. If a Will was left behind, transferring the ownership of property can be slow and costly. It is much easier and quicker to do if the decedent has a living trust.

The following things can be accomplished in probate:

  • The decedent’s property is identified and an inventory is made of it
  • An appraisal is made on the property
  • Taxes and creditors are paid with the decedent’s assets
  • Retirement accounts and life insurance are given to the joint owner or heirs

Probate must occur in the county where the decedent has property, not necessarily where he or she was at the time of his or her death. In order to probate a Will, a probate petition must be filed with the court. Roughly a month to a month and a half after this petition is filed, there will be a legal hearing to determine how the property will be divided.

As mentioned above, probating a Will is generally a long and slow process that can become expensive. If you want to avoid probate, you should use a living trust. Using a living trust is the most common way to avoid probate.

If there is no living trust or if you want to probate the deceased’s Will, it can be a confusing and tedious process. This is where a probate lawyer comes in. I can help you through this process and make it as painless as possible. For more information, you can contact me for a free consultation. I will answer any questions that you have at no cost to you!

FORECLOSURE DEFENSE & BANKRUPTCY SEMINAR | JUNE 8, 2016 | STAMFORD, CT

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Chapter 7 Bankruptcy Series Part Five: Preparing, Signing and Filing a Bankruptcy Petition

In this blog we will explore a very important step in your Chapter 7 Bankruptcy process: Your Chapter 7 Bankruptcy Petition Signing and Filing.

Once you have met with me for your free initial consultation, retained me to file your Chapter 7 Bankruptcy Petition and delivered to me all of the required documents, I will then prepare your Chapter 7 Bankruptcy Petition and schedule a convenient time for you to come in to our office to sign your Petition.

Your Bankruptcy Petition signing is a very serious step in your Bankruptcy Process and you will be required to carefully read your petition.  This appointment will take approximately one hour in which I will go over each and every page with you and answer any questions you may have.  Ultimately, you will be asked to sign several pages of the Petition under oath, swearing that the information provided is true and accurate to the best of your ability, and I will then electronically file your Petition with the Bankruptcy Court.

This blog is intended to give you preview of the many parts of a typical Chapter 7 Bankruptcy Petition. Please keep in mind that your Petition may differ according to your specific financial circumstances and that it is vitally important to always disclose all of your income, assets, debts (liabilities).  Not fully disclosing all of your information could lead could be deemed Bankruptcy Fraud which is a crime.

The first part of your Chapter 7 Bankruptcy Petition consists mainly of identification and general information.  It will list your name, address, and the last four digits of your social security number.  It will give a rough estimate (or a “range”) of how many creditors, assets and liabilities you have.  It will also include your signature (as the “Debtor”) and mine (as your “Attorney”), affirming that the information provided is true and accurate under the penalties of perjury.  Please note that your Bankruptcy Petition is a public document and due to that fact your Social Security Number will always be redacted to the last four digits for anti-identity theft purposes.

The next several pages in your packet will be your Means Test, the assessment used to determine if you qualify for a Chapter 7 Bankruptcy filing.  For more information on your Means Test please consult me, and/or my previous Blog in this Chapter 7 Series.

Your Means Test will be followed by Exhibit D which is your statement to the Court that you successfully completed your Credit Counseling requirement.  Credit Counseling is a mandatory course taken usually on the telephone or internet, which takes about one hour, analyzes your financial circumstances and helps you create a budget.  For more information on the Credit Counseling requirement please consult me, and/or my previous Blog in this Chapter 7 Series.

The next part of your Chapter 7 Bankruptcy Petition will be a Summary of the Schedules to follow.  This is a snap-shot view of your income, assets and liabilities as more fully reported on each individual schedule (described in detail below) and a Statistical Summary of Certain Liabilities (in layman’s terms that mean you “debt-to-income ratio”).

The Summary will be followed by a series of Schedules as follows:

  • Schedule A – Real Property: This Schedule will list any Real Estate that may be in your name according to the Land Records with a brief description and its location, along with the nature of your interest in the property (e.g. whether you own it solely or jointly), its current value and the amount of any liens (e.g. mortgages) against the property.  This list may also include time shares, if any.
  • Schedule B – Personal Property: This Schedule will list all of your personal belongings, such as cash, contents of bank accounts and safe deposit boxes, security deposits with public utilities or landlords, clothes, jewelry, antiques, collectibles, firearms, sports equipment, household goods and furnishings, stocks, bonds, retirement accounts, patents, copyrights, or other intellectual property, future interests in any estates or life insurance policies, legal claims against other persons or entities, vehicles and any other personal property not already listed.
  • Schedule C – Property Claimed as Exempt: This Schedule will list all of your property that is exempt (or, in other words, immune) from being liquidated by your Chapter 7 Trustees in order to pay back your creditors.  It will also list the specific law that provides for each exemption.  A typical exemption is that for the equity in your car, or home (usually referred to as a “homestead exemption”).  Depending on your specific set of financial circumstances, I will determine if it is in your best interests to utilize the State or Federal exemption scheme in order to maximize the protection of your assets under the law.  (Check back to the Consumer Legal Services, LLC Blog site in the future for an extended explanation of the exemption system!)
  • Schedule D – Creditors Holding Secured Claims: This Schedule will list any creditors you have holding a security interest in any of your property.  Common examples of such interests are mortgages for homes and and car loans for cars.
  • Schedule E – Creditors Holding Unsecured Priority Claims: This Schedule will list any of your creditors that are holding unsecured (for which they do not have a lien) priority claims.  These types of claims arise when you have child support obligations, government student loans or tax debt.  These types of debts are considered “priority” and take precedence over your other debts.  They are usually not discharged in Bankruptcy and you will continue to pay them while your Chapter 7 case is pending.  Some exceptions apply, especially with regard to taxes. (Check back to the Consumer Legal Services, LLC Blog in the future for an extended explanation of taxes in bankruptcy!)
  • Schedule F – Creditors Holding Unsecured Non-Priority Claims: This Schedule will list all of your unsecured debt, such as credit cards, personal loans and medical debt.  Unless otherwise determined by the Bankruptcy Court, all of the debts listed on this Schedule will be discharged.  There will be an ancillary document related to this Schedule called the Verification of the Creditor Matrix.  This verification will include a list of your creditors in a matrix format for easy uploading to the Bankruptcy Court.
  • Schedule G – Executory Contracts and Unexpired Leases: This Schedule will list all unperformed contracts and leases that you may be subject to.  The example I often give for an executory (or unperformed) contract is for snow plowing when it has not yet snowed and/or you have not yet paid the plowman.  A lease, for example, for an apartment or a car is an executory contract to the extent that it has not expired.
  • Schedule H – Codebtors: This Schedule will list any persons you have become liable with on a debt, other than a spouse in a joint petition.  Examples often include parents you have co-signed a loan for a child.
  • Schedule I – Current Income of Individual Debtor(s): This Schedule will list all current income you are receiving at the time of the signing of the petition.  If you are married, your spouse’s income must be included whether or not your spouse is filing Bankruptcy.
  • Schedule J – Current Expenditures of Individual Debtor: This Schedule will list all of your expenses that you will continue paying regardless of ever having filed for Bankruptcy, such as your mortgage, utilities, transportation and food expenses.

At the end of all of the Schedules there will be a “Declaration Concerning Debtor’s Schedules” which you will sign under oath stating that all of the foregoing information contained in the various schedules is true and accurate to the best of your ability.

Next there will be a document called “Statement of Financial Affairs.”  This statement will include information about such things as any pending lawsuits you are involved in, how much you paid for debt counseling and information related to any businesses you may own or have owned, among other pertinent information.

That statement will be followed by a Disclosure of Compensation of Attorney for Debtor.  On this document I will list the amount of money you have paid for my services.

The final document in your Chapter 7 Bankruptcy Petition will be your Form B21, otherwise known as your “Statement of Social Security Number.”  This statement is the only non-public part of your Bankruptcy Petition and will only be seen by, you, me and the Bankruptcy Court.  It is not a public document and therefore, your entire Social Security Number will be protected against identity theft.  This is quite possibility the most important document you will read and sign at the time of filing.  In fact, I will require that you re-read this document several times, and even show me your Social Security Card to confirm the accuracy of your Social Security Number.  If your social security number is wrong on this form, your debts will not be discharged…but someone else’s may be!  So always triple check…and then check again!

After you have read and signed all of the documents you will be given a copy of your entire Petition.  After you go home, I will then electronically file your Petition.  During the e-filing process a Case Number, a Chapter 7 Trustee, and a date for your 341 Meeting will be randomly generated and assigned to your Chapter 7 Bankruptcy Case.  I will deliver this information to you by phone or email, and a Notice will be delivered to you directly on the mail by the Bankruptcy Court including this and other pertinent information about your Chapter 7 Bankruptcy Case.

Stay tuned for our next blog entry in this Chapter 7 Series which will explain just who and what the Chapter 7 Trustee is and why the Trustee plays such a vital role in your Chapter 7 Bankruptcy!

For more information or to find out if you qualify for Bankruptcy, please call our office at 203-713-8877.

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This firm is a debt relief agency. We help people file for bankruptcy relief amongst other things, under the Bankruptcy Code.