August 18, 2019

Life After Chapter 13 Bankruptcy: A Serious Process for a Fresh Start

You have come a very long way, and I want to be the first person to CONGRATULATE you on completing all of your Chapter 13 Bankruptcy Plan Payments, and successfully receiving a Chapter 13 Bankruptcy Discharge!  I understand what an incredible accomplishment this is and admire your determination to clean up your debt and get a Fresh Start!

The day you receive your Chapter 13 Bankruptcy Discharge is the first Debt-Free day of the rest of your life.  I know, as awesome as that may sound, it may also seem a bit scary to think you will have no credit and not be able to fall back on credit cards in an emergency after the long years of being in the Chapter 13 Process, but it’s not forever and there is a healthy and productive way about living cash-only during and after the Chapter 13 Bankruptcy Process.

“Chapter 13 Bankruptcy is a process for people serious about getting a second chance at a financially healthy life.”

Through your Chapter 13 Bankruptcy Process you completed a Debtor Education/Personal Financial Management Course that taught you effective ways of rebuilding your credit.  One of those ways is by obtaining a secured credit card, which you can do almost immediately upon receiving your Discharge.  This is great for two reasons: (1) it will immediately help you rebuild your credit (as long as you pay at least the minimum payment on time each month) and (2) it will give you that safety net back of having a credit card (but it should be strictly for emergencies only).  The beauty of a getting a secured credit card  right after Bankruptcy is that you will only be allowed a very small limit (usually $200 at first), this will help you police your spending habits and force you to learn to live life cash-only.

After you start your new debt-free financial journey you will become confident that you can support yourself and have a healthy financial life without the crutch of credit cards and having the burden of the crushing debt that results from those credit cards.

The number one worry my clients have is that Bankruptcy is public information and it will be used against them.  Although Bankruptcy is public information, your filing is not printed in the newspaper or easily accessible to the community.

Your Bankruptcy filing will show up on your Credit Report and it will show up on a financial background search, however, filing for Bankruptcy is a constitutional right and you cannot be discriminated against solely on the basis of your Bankruptcy.

A few years after you are discharged from Bankruptcy you will able to obtain car loans and mortgages for real estate.  As time goes on, you will be given more favorable interest rates and your credit score will begin to grow.  In fact, some creditors even look favorably on people who have completed a Chapter 13 Repayment Plan, because they know you have the determination, perseverance and ability to make monthly payments on time.

The bottom line is that once you start over in Bankruptcy, learn healthy money management skills and begin to regain your credit, you can live a life of abundance with peace of mind and security.

I tell all of my clients: do not let the potential after-effects of Bankruptcy deter you from filing and getting your second chance at life.

For more information on the Chapter 13 Bankruptcy Process, please contactAttorney Theresa DeGray, at 203-713-8877.

Chapter 13 Discharge

Congratulations, you have successfully completed your Chapter 13 Bankruptcy case and received your Discharge! 

But…just what is a Discharge anyway!?!

 

The most frequently asked question I get from my clients is “WHAT IS A DISCHARGE?” So, in this Chapter 13 Series Blog installment I am going to fully explain what a Chapter 13 Bankruptcy Discharge is and what it means to you and your creditors going forward.

“The goal of Bankruptcy is to give you a ‘fresh start.’ The Supreme Court made this point about the purpose of the bankruptcy law in the 1934 decision of the case Local Loan Co. v. Hunt, 292 U.S. 234, 244, ‘it 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.’  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.”  –www.USCourts.gov

 

First let’s start with the definition: a Chapter 13 Bankruptcy Discharge is a court order stating that you completed your Plan payments, and are no longer responsible to repay the any outstanding unsecured debts listed on your Chapter 13 Bankruptcy Petition.

Next, we will explore what a Discharge means to you.

Once you have completed all of the steps in the Chapter 13 Bankruptcy Process, (credit counseling, filing your petition, attending your Section 341 Meeting and Confirmation Hearing, completing your personal financial management course and paying all of your Plan payments), you will then receive in the mail a 2 page document entitled “Discharge of Debtor.”

When most people receive this final document they expect it to be very specific and state exactly what debts have been discharged.  Unfortunately, the document simply states “it appearing that the debtor is entitled to a discharge, it is ordered: the debtor is granted a discharge under section 1328(a) of title 11, United States Code, (the Bankruptcy Code).”  It does not list the debts that have been discharged in detail, but rather applies to all of the debts that you listed on your Chapter 13 Bankruptcy Petition, unless otherwise ordered by the Bankruptcy Court.

The second page (or back side, depending on how the Court prints the document) of your Discharge will have the Court’s “explanation of Bankruptcy Discharge in a Chapter 13 Case.”  This is an official Form from the Court and the Court disclaims that “this information is only general…there are some exceptions…you may want to consult an attorney.”

The Court’s explanation contains three main points of information summarized below:

1-Collection of Discharged Debts Prohibited: No creditor is allowed to contact or harass you in an attempt to collect a debt that was discharged.  However, you are allowed to make voluntary payments on any discharged debt.  Normally people do this for doctors or service providers that they want to maintain relationships with.

2-Debts that are Discharged: Debts that are dischargeable in a Chapter 13 Bankruptcy usually include unsecured debts like credit cards, medical debt and personal loans not secured by property and that have not been paid in full through your Chapter 13 Bankruptcy Plan.

3-Debts that are NOT Discharged: Debts that are not discharged in a Chapter 13 Bankruptcy case usually include most secured debts, most taxes, domestic support obligations (such as child support and/or alimony), most student loans, most fines, penalties or criminal restitution obligations, reaffirmed debts, debts owed to certain pensions, profit sharing plans and other retirements plans, and all other debts that the Bankruptcy Court may specifically decide are not dischargeable.

And finally, we will conclude with a discussion of what a Discharge means to your creditors, and more importantly, your credit report.

As stated above, the Bankruptcy Discharge (a Court Order) prohibits any creditors to attempt to collect on a discharged debt.  Therefore, if creditors continue to harass you after receipt of your Discharge, you will want to call us right away, as it is illegal.

Keep in mind that a creditor may still have the right to enforce a lien against your property after your Chapter 13 Bankruptcy has concluded and you have been discharged, if the lien was not specifically listed on your Chapter 13 Bankruptcy Petition and discharged.

You Chapter 13 Bankruptcy Filing and subsequent Discharge will be reported on your credit report.  This will likely remain on your credit report for 7 to 10 years.  However, that will not stop you from rebuilding healthy credit during those years.

In my next Blog and final installment of this Chapter 13 Bankruptcy Blog Series, I will discuss what getting/having a Bankruptcy Discharge means in the next phase of your life.

Contact Attorney Theresa DeGray with any questions you may have about Chapter 13 Bankruptcy Discharges at 203-713-8877.

5 Ways to Save Money at Carnivals

Carnivals are great places to go where families can have fun times together and make great memories.  With no admission fees to most Carnivals, often folks have the false impression that they are inexpensive.  Unfortunately, that is not always the case.  The cost of food, games and rides most certainly adds up and a so-called “inexpensive” family night out has run your credit card up the same amount of money as a five star restaurant.

Below are five ways to save money on your next trip to a Carnival:

  1. TREATS: Treats such as funnel cakes, popcorn, corn dogs, and cotton candy are so expensive at Carnivals so be sure to eat at home before you go and try to bring your own drinks to the Carnival to defray costs; limit each child to one treat (or give them a budget).
  2. DISCOUNTS: Take a look at the Carnival’s website before you go (see below for a few local carnivals and links to their websites) to check for any deals that may be available.  Sometimes there are coupons and discounts for groups, seniors/grandparents, etc. available online.
  3. SOUVENIRS: These can get super expensive, especially if you are trying to win one!  Limit how many tries you take, and shop around to different vendors within the carnival before you drop hundreds of dollars on one stuffed animal.
  4. PARKING: Scope out the parking situation before the day of the carnival.  On-site parking can be costly (if it’s not free), but definitely more convenient.  Alternatively, you can try to find an off-site parking lot that will most likely be much cheaper or try Uber or Lyft.  If you live close by, walk or bike there.
  5. RIDES: Paying per ride can get very expensive.  Again, go online or look at the carnival ticket booth for discounts and special packages.  They may have wristband options or special deals for different age groups.

Carnivals can be a fun filled family experience, but if you do not plan your trip wisely, they can be quite costly.  So, use these money saving tips above in order to have a fun-filled – inexpensive – family day!

Check out some local events below and have a Safe and Fun Summer!

Whee,
Theresa Rose DeGray
Attorney at Law

Debtor Education Course

The last action you must take in your Chapter 13 Bankruptcy Process will be taking the Debtor Personal Financial Management Education Course.  This is actually fun and will be your first step on the road to a healthy financial life!

In order to receive your Discharge you must complete an “instructional course concerning personal financial management”1 after your Chapter 13 Petition is filed and before you make your last Chapter 13 Bankruptcy Plan Payment.  I suggest that you take the course before your 341 Meeting of the Creditors or shortly thereafter so you do not forget to do it, as the Chapter 13 Process is a lengthy one and you may not be making your last payment for 5 years.

This is the second and final course you must take to complete your Chapter 13 Bankruptcy Process.  The first course was “credit counseling.”  This second and final Debtor Education course is different as you will see below.

The Debtor Education course must be administered by an agency that is approved by the United States Trustee Program for the District that you reside in.  I will give you a list of the currently approved agencies during our initial consultation and gently remind you during the process when you should take the course.

The course may be taken in person or online.  It takes approximately two hours to complete, and costs anywhere from $15 to $50 depending on which agency you choose and if they have special promotional offers running at the time.  All you need to take the course is your Case Number.

I call this course “fun” because it teaches you some great tips on rehabilitating your damaged credit and can help you rebuild your credit to better than ever before with simple steps that you can take as soon as you receive your Discharge.

What you will learn in the Debtor Personal Financial Management Education Course is priceless, so if you take it in person, I strongly suggest that you take notes for future reference, and if you choose to take it on the internet, I urge you to save the information to your hard drive or print it out and create a reference guide for yourself.

Here is what you will learn in the Debtor Financial Management Education Course to help you rebuild strong credit:

  • How to Budget: The course will teach you the fundamentals of making a household budget.
  • Money Management: Unlike budgeting, which is big-picture and long-term, managing money is a daily activity in the short-term, and the course will offer you tips on how to manage your money, balance your checkbook and keep up with daily purchases.
  • Why You Should Get a Secured Credit Card: I know this sounds like contradictory advice but the best way to rebuild credit is to get another credit card! But not just any old credit card, you will be taught why and how to get a secured credit card.
  • Building Credit One Month at a Time: The only real way to build strong credit is to pay your bills ON TIME each and every month. By doing that, month after month, your credit builds back stronger and stronger and you will see results year after year as your credit score improves.
  • Saving for the Future: You will learn the importance of taking the money you would have otherwise been spending on credit card payments and saving portions of it to build some security and peace of mind in the form of a savings account, investments and a retirement account.
  • Other Important Consumer Information: You will also receive additional pre-discharge counseling to assist you in life after Bankruptcy.

At the end of your Debtor Personal Financial Management Education Course you will be given a Certificate of Completion.  You can instruct the agency to deliver a copy to me electronically and I will file it, along with your Official Form B23, with the Court for you.

The sooner you take this course during your Chapter 13 Bankruptcy Process, the better.  I believe it will serve you well in being able to budget around your Chapter 13 Bankruptcy Plan Payments.

Check in again soon for the next installment in this Chapter 13 Bankruptcy Blog Series to learn all about your Discharge!

Questions? Contact Theresa Rose DeGray at 203-713-8877.

11 U.S.C. § 727(a)(11)

The Confirmation Hearing

The next step in your Chapter 13 Bankruptcy Process will be to attend your Chapter 13 Bankruptcy Plan Confirmation Hearing.  Do not be alarmed!  You will likely not have to testify at this Hearing at all.  But I will explain below the process leading up to and including your Conformation Hearing, so you can have a preview of events and can ask me questions well in advance so you are fully prepared for this step in your Chapter 13 Bankruptcy Process.

After we sign and file your Chapter 13 Bankruptcy Petition and Plan, your Chapter 13 Bankruptcy Trustee will review your plan and may suggest changes to the Plan.  These changes may adjust the amount paid to your Creditors, the period of the Plan or the Plan payment.  Once I make the suggested changes to your Plan, I will have you review them and sign an Amended Plan.  This is common, and amendments to Plans usually occur at least once or twice in each typical Chapter 13 Bankruptcy Case.

Once your Chapter 13 Trustee believes that your Plan is “confirmable” (or feasible) and has no further changes to suggest, a date for your Confirmation Hearing will be scheduled by the Clerk of the Bankruptcy Court.  I will inform you of that date as soon as it is available to me so that you can arrange to take time off from work or other commitments, if need be, to attend the Hearing with me.

Your Chapter 13 Bankruptcy Plan Confirmation Hearing is not like your Chapter 13 Section 341 Meeting in any way.  The Confirmation Hearing will be held in a Federal Courtroom and there will be a Judge present to make an Order of the Court as to whether your Plan is Confirmed or not.  You will likely not even have to stand with me or speak at all.

This is usually a very simple procedural Hearing as we usually know in advance if the Chapter 13 Trustee will support your Plan or not, and most times the Plans are Confirmed as Amended.

At the conclusion of the Confirmation Hearing the Judge will make his or her Order and a copy of the Order will be emailed to my office.  We will send you a copy for your records.

Once the Plan is confirmed the Trustee usually requests that payments be made by way of wage garnishment (or income deduction) if you have a regular salary or wages (not if you are self-employed or retired collecting social security and/or a pension).  This may also be made a Court Order.  This takes the worry and hassle of making the monthly payments away from you.  Again, do not be alarmed, your employer will understand and will not be allowed to discriminate against you for having the wage garnishment.

At this point in your Chapter 13 Bankruptcy process your work is nearly done.  The Plan will now run for 3 or 5 years and there should be no changes unless there is a substantial change in your circumstances, like an illness or loss of income.  You will be responsible for reporting any major changes to me and/or the Chapter 13 Bankruptcy Trustee.

You will also be responsible for delivering a copy of your filed tax returns to me each year.

If there are no major changes in circumstances, you will have to complete one last step (a Debtor Education Course) sometime before your last payment is due to the Trustee.

I will send you a gentle reminder to take the Debtor Education Course sooner rather than later so you don’t forget in the up to five year period it takes to reach the end of the Plan.  In the following blog of this Chapter 13 Series, I will explain what Debtor Education is and how it will assist you in rebuilding your credit.

For more information on this and other Bankruptcy topics, contact Attorney Theresa Rose DeGray at 203-713-8877.

Bankruptcy 341 Meeting of the Creditors

In my last blog entry of this Chapter 13 Series I explained who the Chapter 13 Trustee is and what role she plays in your Chapter 13 Bankruptcy Case.  In this blog I am going to stay with that topic, and add some information on just what to expect at a typical Section 341 Meeting of the Creditors.  I want you to be fully prepared and to allay any of your fears of testifying at a hearing.  That is why I am going to run through a typical Section 341 meeting step-by-step below.

During your Chapter 13 Bankruptcy Process, after you file your Petition and before you receive your Discharge, you will be required to attend a hearing called a Section 341 Meeting of the Creditors.  These meetings (or hearings) are called “Meetings of the Creditors” because they are an opportunity for creditors of your Bankruptcy Estate to object to your pending Discharge and question you with regard to their claims.  Despite the name, this is an extremely rare occurrence and I don’t usually expect it to happen.  But if it does, we will be prepared and I will alert you prior to the Section 341 Meeting if I am aware of any such claims.

One of the main duties of the Chapter 13 Bankruptcy Trustee is to: Conduct a 341 Meeting of the Creditors (a Hearing you must attend and testify at under oath).  Additionally, the Trustee has the power to refer cases to higher authorities to be investigated for Bankruptcy Fraud and/or other crimes, if appropriate.  Therefore, it is imperative that you fully disclose all of your income, assets and liabilities to me during your Bankruptcy process, so I may properly prepare your Bankruptcy Petition to avoid any improprieties.

You are obligated to attend your Section 341 Meeting and if you fail to do so your case will be dismissed.  At the meeting you will be expected to testify under oath as to the truth of the information provided in your Chapter 13 Bankruptcy Petition and documents provided to your Chapter 13 Trustee prior to your 341 Meeting.

Special Note to Married Couples Filing Bankruptcy Together: You both must attend the Section 341 Meeting.  Most Trustees will ask that only one of you speak and answer the questions for both of you, but if your spouse says something that you do not agree with, it is your responsibility to state your answer on the record separately.

All Section 341 Meetings are conducted at one of the three Federal Courthouses or Federal Government buildings in Connecticut located at Bridgeport, New Haven or Hartford.  The location you will be assigned to is usually randomly selected by the Court’s computer system but generally you can expect to attend the 341 Meeting at the Courthouse closest to your residence.  Section 341 Meetings are technically hearings but they are not formal and there is no Judge present.  It is a casual meeting with the Trustee, and I will be there as your representative.  The three of us (or four, if your spouse is filing as well) will sit around a conference room table.  These meetings are open to the public but usually the only people attending are other persons who have filed for Bankruptcy, or creditors that wish to pose questions to others who have filed.

Interpreters are available upon request and will be provided by the court at no cost to you.

Here is the sequence of events that leads up to, and includes, a typical Section 341 Meeting:

A few days before your scheduled Section 341 Meeting I will send you a letter with instructions, and a staff member from my office will follow-up with a phone call to you.  We will remind you to arrive 15 minutes early to observe other Debtors go through their 341 Meetings, as well as to remind you to bring your Driver’s License and Social Security Card.

When you arrive at the Section 341 Meeting location, I will greet you.  I will ask you if you have any questions for me and then have you sit and observe other Debtors testifying at their Section 341 Meetings.  Once your case is called we will move from the gallery to the conference room table where the Trustee will be sitting.  You will be asked to remain standing, the Trustee will swear you in and then you will be asked to state your name for the record and take a seat.  The Trustee will then introduce herself to us and I will announce my name for the record.

The Trustee will then ask you a series of questions under oath and you will be subject to the penalties of perjury.

Sample questions include but are not limited to the following:

  • Did you read the petition, schedules, statements, and related documents before you signed them?
  • Are all of your assets identified on the schedules?
  • Have you listed all of your creditors on the schedules?
  • Have you previously filed bankruptcy?
  • What is the address of your current employer?
  • Is the copy of the tax return you provided a true copy of the most recent tax return you filed?
  • Do you have a domestic support obligation?
  • Have you read the Bankruptcy Information Sheet provided by the United States Trustee?
  • Have you made any transfers of any property or given any property away within the last one year period?
  • Does anyone hold property belonging to you?
  • Do you have a claim against anyone or any business?
  • Are you the plaintiff in any lawsuit?
  • What is the status of each case and who is representing you?
  • Are you entitled to life insurance proceeds or an inheritance as a result of someone’s death?
  • Do you own an automobile?
  • Do you have any winning lottery tickets?
  • And there will be a few questions at the end about your Chapter 13 Bankruptcy Plan.

Please remember that the Trustee has the power to refer cases to higher authorities to be investigated for Bankruptcy Fraud and/or other crimes, if appropriate.  Therefore, it is imperative that you tell the truth while you are under oath at the Section 341 Meeting of the Creditors.

All in all, the Section 341 Meeting should last no more than 15 minutes and should be the first of the only two times you have to personally appear at any Hearings during your Chapter 13 Bankruptcy Process.  (The other time will be at your Chapter 13 Bankruptcy Plan Confirmation Hearing.)

Next up in this Chapter 13 Blog Series will be my blog about your Chapter 13 Confirmation Hearing!

If you have any questions in the meantime, contact Theresa Rose DeGray  at 203-713-8877.

The Chapter 13 Bankruptcy Trustee

In your Chapter 13 Bankruptcy process there will be 3 main characters: you, your attorney and the Chapter 13 Bankruptcy Trustee.

The Chapter 13 Bankruptcy Trustee is the person who oversees your Bankruptcy Case.

There is currently only one Chapter 13 Trustee in the State of Connecticut, who is appointed by the United States Trustee.  The Trustee Program is a part of the Department of Justice.

The United States Trustee Program is a component of the Department of Justice that seeks to promote the efficiency and protect the integrity of the Federal bankruptcy system. To further the public interest in the just, speedy and economical resolution of cases filed under the Bankruptcy Code, the Program monitors the conduct of bankruptcy parties and private estate trustees, oversees related administrative functions, and acts to ensure compliance with applicable laws and procedures. It also identifies and helps investigate bankruptcy fraud and abuse in coordination with United States Attorneys, the Federal Bureau of Investigation, and other law enforcement agencies.”The U.S. Department of Justice

Upon filing of your Chapter 13 Bankruptcy Petition you will be assigned to the Chapter 13 Bankruptcy Trustee by the Bankruptcy Court’s computer system.  I will deliver the name, address and payment instructions of the Chapter 13 Trustee to you in person or by email the day you sign and I file your Petition, and a few days later an official Notice from the Bankruptcy Court will be mailed to you with this and other pertinent information about your Bankruptcy case.

The primary duties of the Chapter 13 Bankruptcy Trustee are to:

  •  Examine your Chapter 13 Bankruptcy Petition, Schedules and Plan;
  •  Conduct a 341 Meeting of the Creditors (a Hearing you must attend and testify at under oath);
  •  Review your Plan and suggest any changes prior to the Confirmation Hearing and;
  •  Administer your Plan by collecting your payments and making disbursements to your Creditors.

The Chapter 13 Trustee Administrative expenses are built into and paid out of your Plan.  Additionally, the Trustee has the power to refer cases to higher authorities to be investigated for Bankruptcy Fraud and/or other crimes, if appropriate.  Therefore, it is imperative that you fully disclose all of your income, assets and liabilities to me during your Bankruptcy process so I may properly prepare your Bankruptcy Petition to avoid any improprieties.

After your Chapter 13 Bankruptcy Petition and Plan are filed, but before you attend your 341 Meeting, we will mail to you a Questionnaire provided by your Chapter 13 Bankruptcy Trustee.  The questions are simple and you should be able to answer them all without assistance, but of course, I am always here to guide you.  An example of one inquiry on the questionnaire would be “have you ever filed bankruptcy before?”  If the answer is “yes,” there will be a few follow-up questions like “What was the case number?” and “Did you receive a discharge?”

Your Chapter 13 Trustee will also provide to my office a list of required documents that the Trustee will examine in conjunction with your Bankruptcy Petition.  The list of requested documents will include such things as Tax Returns, Bank Statements and Paystubs.  Usually I will already have everything that is requested, but I may ask you to provide additional documents to satisfy the requests of your Chapter 13 Trustee.

The next part of my Chapter 13 Bankruptcy series will take you through your Chapter 13 Section 341 Meeting of the Creditors so you are fully prepared to attend the Hearing.

Contact Attorney Theresa Rose DeGray at 203-713-8877 for more information on this and other Bankruptcy related topics.

Chapter 13 Plan

In my last blog I discussed your Chapter 13 Bankruptcy Petition Signing.  Also at that appointment we will go over your Chapter 13 Bankruptcy Plan which will be filed with the Court along with your Petition.  This blog will give you a general overview of a typical Chapter 13 Bankruptcy Plan (hereinafter referred to as “the Plan”) in Connecticut.

The first section of the Plan will state the portion of your future income that you will submit to the Chapter 13 Trustee each month to execute the Plan.  This section also states “the applicable commitment period” or, in other words, how many months the Plan will be for (Plans can be for 3 or 5 years (36 or 60 months)).  The amount of time required depends on the amount of disposable income you have, along with other factors.  The usual Plan will take 5 years to complete.

Your first payment must be made to the Chapter 13 Trustee within 30 days after filing of the Plan.  Failure to do so may result in the dismissal of your case.  The Chapter 13 Trustee usually requires the payments be made by wage garnishment (attaching your pay) after the Plan is confirmed.  Until then, you must mail the payments to the Chapter 13 Trustee.  I will provide you with the address and specific instructions when the time comes.

The first section of the Plan will also list any domestic support obligations you may have.

The second section of the Plan will explain the disbursements that will be made by the Chapter 13 Trustee from the payments that you make.  The first set of disbursements are for Priority Claims (such as taxes and government student loans), if any.  Followed by Secured Claims (such as mortgages and car loans), if any.  However, these debts are ordinarily paid outside of the Plan by you directly to the Creditor(s).

The last set of disbursements listed in the second section of the Plan will be for your unsecured debt.  This is done by listing the total of all general unsecured claims.

The next few sections of the Plan will list your executory contacts (unperformed contacts), if any, and give “other” terms of the Plan, which is a catchall for terms that do not neatly fit in to any other section.

In the last section of the Plan it will state my attorney’s fees for representing you and whether they are to be paid inside or outside of the Plan.

This will be followed by a signature block for you and me to sign.  The Plan will state that all questions regarding the Plan will be directed to my office.

Remember, this Plan is subject to change upon examination of the Chapter 13 Trustee and is not final until the Order of the Court after your Confirmation Hearing.  Your Confirmation Hearing will be explained in a later blog within this Chapter 13 Blog Series.

Contact Attorney Theresa Rose DeGray at 203-713-8877 with any questions you may have and stay tuned for our next blog entry in this Chapter 13 Series which will explain just who and what the Chapter 13 Trustee is and why the Trustee plays such a vital role in your Chapter 13 Bankruptcy.

Bankruptcy Petition Signing and Filing

In this blog we will explore a very important step in your Chapter 13 Bankruptcy process: Your Chapter 13 Bankruptcy Petition Signing and Filing.

Once you have met with me for your free initial consultation, retained me to file your Chapter 13 Bankruptcy Petition and delivered to me all of the required documents, I will then prepare your Chapter 13 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.

QUICK TIP: The name of the Bankruptcy game is disclosure.  You always want to make sure that you report every source of income, every asset and every liability you have because you are signing your Petition under oath and it will be examined by your Chapter 13 Trustee.

This blog is intended to give you a preview of the many parts of a typical Chapter 13 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).  A failure to fully disclose all of your information could be deemed Bankruptcy Fraud, which is a crime.

The first part of your Chapter 13 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 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.  Please note that your Bankruptcy Petition is a public document and because of that your Social Security Number will always be redacted to the last four digits to avoid identity theft.

The next several pages in your packet will be your Statement of Current Monthly Income, the assessment used to determine if you qualify for a Chapter 13 filing and calculate your disposable income.  For more information on your Statement of Income please consult me, and/or my previous Blog in this Chapter 13 Series as seen here [insert link to blog].

Your Statement of Income 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 13 Series as seen here [insert link to blog].

The next part of your Chapter 13 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).

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

  • Schedule A – Real Property: This Schedule will list any Real Property 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 13 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 use the State or Federal exemption scheme in order to maximize the protection of your assets under the law.  (Check back to the LadyBankruptcy 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 and car loans.
  • 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 13 case is pending.  Some exceptions apply, especially with regard to taxes. (Check back to the LadyBankruptcy Blog site 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 who 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 13 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 possibly 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, the Chapter 13 Trustee, and a date for your 341 Meeting will be randomly generated and assigned to your Chapter 13 Bankruptcy Case.  I will deliver this information to you by phone or email, and a Notice will be mailed to you by the Bankruptcy Court including this and other pertinent information about your Chapter 13 Bankruptcy Case.

In my next blog post, I will continue discussing what you will be reading and signing when you come in to see me with a full explanation of your Chapter 13 Bankruptcy Plan.

For more information on Chapter 13 Bankruptcy, contact us today at 203-713-8877.

Credit Counseling

Once your Statement of Current Monthly Income is complete and it is determined that you are a qualified candidate for a Chapter 13 Bankruptcy with enough disposable income to fund a Chapter 13 Bankruptcy Plan, I will then instruct you to complete a Credit Counseling Course which is the next step in the bankruptcy process.  The completion of a Credit Counseling Course is required by the Bankruptcy Code.1 I will give you a list of credit counseling agencies approved by the United States Trustee and answer any questions about the course you may have before you start.

After you select an approved agency, you can take the course in person, or, more conveniently, online or on the telephone in the comfort of your own home.  The course takes approximately one hour in total to complete.

Quick Tip: If you take your credit counseling course online (versus in person or on the phone) you can start it and stop it as many times as you need to, like a DVD.  This is usually more convenient for people who have jobs and children!

The course customarily consists of an introductory briefing and a budget analysis.  At the conclusion of the session, you will be given a final briefing on your options in bankruptcy as well as non-bankruptcy alternatives.  The class is rather straightforward and nothing to be nervous about.

Most approved agencies charge $30 to $50 for an individual and may give a discount to a married couple.  It is important to note that the credit counseling course must be done within the 180 days before the day you file your petition and may not be done on the day you file.  There are few exceptions to the credit counseling requirement (e.g. exigent circumstances, etc.) but failure to comply with the credit counseling requirement, unless otherwise ordered by the Bankruptcy Court, could result in a dismissal of your case.

Upon completion of the course you will be given a “Certificate” of completion.  You can instruct the agency to deliver a copy of the certificate to my office via e-mail or fax, or you can send me a copy yourself.  Your certificate will ultimately be delivered to the Bankruptcy Court upon filing of your Bankruptcy Petition along with an “Exhibit D” called the “Individual Debtor’s Statement of Compliance with Credit Counseling,” which you will sign under oath stating that you completed the course within the required time period before your filing and completed it with an approved agency.

The next step in the Bankruptcy process is to return to my office for the signing and filing of your Chapter 13 Bankruptcy Petition and Plan.  In the next few installments of this Chapter 13 Blog Series I will explain each section of a typical Chapter 13 Bankruptcy Petition and a Chapter 13 Plan, so you will have a preview of what you will be reading and signing before we meet again.

For more information on Credit Counseling or for a free consultation, please contact Attorney Theresa DeGray at 203-713-8877.

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1See 11U.S.C. § 109(h)

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