October 21, 2019

Interim Bankruptcy Rules Published for Public Comment

On February 19, 2020, the Small Business Reorganization Act of 2019, P.L. 116-54 (SBRA) will go into effect – long before the normal three-year rules amendment process runs its course. As a temporary measure, the Advisory Committee on Bankruptcy Rules has drafted interim bankruptcy rules and amendments to the official bankruptcy forms to address the new law that are now available for public comment through Nov. 13, 2019.

The proposed amendments and instructions on how to submit comments are posted on uscourts.gov.

When an advisory committee recommends an amendment to its rules or forms, it must obtain the approval of the Judicial Conference Committee on Rules of Practice and Procedure to publish the proposed amendment for public comment. During the comment period, the public is encouraged to submit written comments and may also request to testify at public hearings on the proposed amendment.

There are two rules packages out for review.

August 19 Package

On June 25, 2019, the Judicial Conference Committee on Rules of Practice and Procedure (Standing Committee) approved publication of proposed amendments to the following:

  • Appellate Rules 3, 6, 42, and Forms 1 and 2;
  • Bankruptcy Rules 2005, 3007, 7007.1, and 9036; and
  • Civil Rule 7.1.

The comment period is open from August 19, 2019 to February 19, 2020. Read the text of the proposed amendments and supporting materials:

Preliminary Draft of Proposed Amendments to the Federal Rules of Appellate, Bankruptcy, and Civil Procedure (pdf)

Public Hearings on the August 19 Package

Members of the public who wish to present testimony may appear at public hearings on the proposed amendments.

How to Submit or Review Comments on the Proposed Amendments to the Federal Rules & Forms (August 19 Package)

Written comments are welcome on each proposed amendment. The advisory committees will review all timely comments, which are made part of the official record and are available to the public. The comment period closes on February 19, 2020.

Comments and supporting files must be submitted electronically using the regulations.gov portal. After choosing the appropriate link below, click the “Submit a Comment” link. This will display the comment on the web form. You can then enter your submitter information and attach your comment as a file (up to 10MB), or type your comment directly on the web form. When you have finished attaching or typing your comment, click the “Preview Comment” link to review. Once you are satisfied with your comment, click the “Submit” button to send your comment to the relevant advisory committee. Upon completion, you will receive a tracking number for your submission.

Detailed instructions on how to submit a comment are given in the Regulations.gov FAQs.

October 16 Package

On February 19, 2020, the Small Business Reorganization Act of 2019, P.L. 116-54 (SBRA) will go into effect – long before the normal three-year rules amendment process runs its course. As a temporary measure, the Advisory Committee on Bankruptcy Rules has drafted Interim Bankruptcy Rules that can be adopted by courts as local rules or by general order when the SBRA goes into effect. The Advisory Committee has also drafted amendments to the Official forms to address the SBRA. The Standing Committee now seeks comment on the proposed SBRA rules and forms for a short four-week period prior to making final recommendations.

  • Interim Bankruptcy Rules 1007(b), 1007(h), 1020, 2009, 2012(a), 2015, 3010(b), 3011, and 3016.
  • Official Forms 101, 201, 309E, 309F, 314, 315, 425A, and new Official Forms 309E2, and 309F2

The comment period is open from October 16, 2019 to November 13, 2019. Because of the short publication period for the Interim Rules and related Official Forms, there will be no public hearings.

Read the text of the proposed amendments and supporting materials:

Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy Procedure – Interim Bankruptcy Rules and Official Forms (pdf)

How to Submit or Review Comments on the Interim Bankruptcy Rules & Forms (October 16 Package)

Written comments are welcome on each proposed amendment. The Advisory Committee on Bankruptcy Rules will review all timely comments, which are made part of the official record and are available to the public. The comment period closes on November 13, 2019.

Comments and supporting files must be submitted electronically using the regulations.gov portal. After choosing the appropriate link below, click the “Submit a Comment” link. This will display the comment on the web form. You can then enter your submitter information and attach your comment as a file (up to 10MB), or type your comment directly on the web form. When you have finished attaching or typing your comment, click the “Preview Comment” link to review. Once you are satisfied with your comment, click the “Submit” button to send your comment to the relevant advisory committee. Upon completion, you will receive a tracking number for your submission.

Detailed instructions on how to submit a comment are given in the Regulations.gov FAQs.

SOURCE

History of Labor Day

Labor Day 2019

On September 2, 2019, the U.S. Department of Labor celebrates and honors the greatest worker in the world – the American worker. Labor Day 2019 is the 125th anniversary of Labor Day being celebrated as a national holiday.

Labor Day: What it Means

Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.

Labor Day Legislation

The first governmental recognition came through municipal ordinances passed in 1885 and 1886. From these, a movement developed to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 21, 1887. During 1887, four more states – Colorado, Massachusetts, New Jersey, and New York – created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 more states had adopted the holiday, and on June 28, 1894, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.

Founder of Labor Day

More than a century after the first Labor Day observance, there is still some doubt as to who first proposed the holiday for workers.

Some records show that Peter J. McGuire, general secretary of the Brotherhood of Carpenters and Joiners and a co-founder of the American Federation of Labor, was first in suggesting a day to honor those “who from rude nature have delved and carved all the grandeur we behold.”

But Peter McGuire’s place in Labor Day history has not gone unchallenged. Many believe that Matthew Maguire, a machinist, not Peter McGuire, founded the holiday. Recent research seems to support the contention that Matthew Maguire, later the secretary of Local 344 of the International Association of Machinists in Paterson, N.J., proposed the holiday in 1882 while serving as secretary of the Central Labor Union in New York. What is clear is that the Central Labor Union adopted a Labor Day proposal and appointed a committee to plan a demonstration and picnic.

The First Labor Day

The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883.

By 1894, 23 more states had adopted the holiday, and on June 28, 1894, President Grover Cleveland signed a law making the first Monday in September of each year a national holiday.

A Nationwide Holiday

Women's Auxiliary Typographical Union

The form that the observance and celebration of Labor Day should take was outlined in the first proposal of the holiday — a street parade to exhibit to the public “the strength and esprit de corps of the trade and labor organizations” of the community, followed by a festival for the recreation and amusement of the workers and their families. This became the pattern for the celebrations of Labor Day. Speeches by prominent men and women were introduced later, as more emphasis was placed upon the economic and civic significance of the holiday. Still later, by a resolution of the American Federation of Labor convention of 1909, the Sunday preceding Labor Day was adopted as Labor Sunday and dedicated to the spiritual and educational aspects of the labor movement.

The character of the Labor Day celebration has changed in recent years, especially in large industrial centers where mass displays and huge parades have proved a problem. This change, however, is more a shift in emphasis and medium of expression. Labor Day addresses by leading union officials, industrialists, educators, clerics, and government officials are given wide coverage in newspapers, radio, and television.

The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pays tribute on Labor Day to the creator of so much of the nation’s strength, freedom, and leadership – the American worker.

SOURCE: U.S. Department of Labor

We are always here for you. Even on holidays. Contact us any time 24/7/365: CONTACT

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.

The Brunner Test

 

brunner

Did you know Student Loans are discharge-able in Bankruptcy?  Well, they are but only if you meet three strict requirements: (1) Poverty, (2) Persistence and (3) Good Faith. It’s called the Brunner Test. Basically it means if you can prove an “undue hardship” you can eliminate Student Loan Debt in Bankruptcy. As you may know, I filed for Bankruptcy on May 28, 2009. (If you do not know the story, please read it here). I did not have circumstances that rose to the level of an undue hardship (a very high standard that very few can reach), but I was drowning in debt, including student loan debt. So, I strategically filed for Bankruptcy to relieve myself of the debts that were discharge-able so I could actually afford to pay my student loans. (If you don’t like to read, you can watch me tell the story here.) You, too, can strategically design your own financial future in the same way using the tools and resources available to you through Bankruptcy. Let’s talk about it more at a free consultation. (Source: Nolo.com)

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.

July-2014-Photos-37

Financial Calculators

Do you Qualify for Bankruptcy?

  1. Are you frequently late in paying your bills?
  2. Do unexpected expenses cause a serious strain on your finances?
  3. Do you constantly worry about paying your bills on time?
  4. Are you behind on any of your debts?
  5. Has your income decreased in the past six months?
  6. Have your wages been garnished in the last year?
  7. Do you find yourself repeatedly borrowing money to pay off your bills?
  8. Do you owe any back taxes?
  9. Are you unable to make the minimum payment on your credit card bills?
  10. Have you ever been contacted by a collection agency for unpaid debts?
  11. Have you recently been contacted at your home or place of business about unpaid bills?
  12. Has your car been repossessed in the last six months?
  13. Do you currently have any outstanding bounced checks?
  14. Do you regularly charge small items on your credit cards?

If you answered “yes” to any of these questions, you may want to contact us to discuss your options via our free consultation. We can explain the bankruptcy laws and help determine whether Chapter 7 or Chapter 13 bankruptcy is the right course for you. In some cases, we even recommend non-bankruptcy alternatives.

Contact us here for a Free Consultation.

Bankruptcy 101: The Very Basics

What is Bankruptcy?

Bankruptcy is a legal proceeding afforded to people (or businesses) who are unable to handle a financial crisis. Bankruptcy is made available by federal law so that you can have a fresh start.

How Does Bankruptcy Work?

After an individual qualifies and files a bankruptcy, legal protections are then instilled by the court that protect the filer as they fix their financial situation, and get their life back on track.

Title 11 of the United States Bankruptcy Code offers various forms or chapters of relief. The chapters most commonly used by consumers are Chapter 7 (known as the Bankruptcy Reform Act) and Chapter 13.

Chapter 7 Bankruptcy is for persons wishing to be free from debt who cannot afford to pay back a significant portion of their unsecured debt. Chapter 13 is for those who wish to pay a portion of their unsecured debt back, and can afford to do so.

Filing for bankruptcy can have the following impact:

• Relieve you of unsecured debt that you are unable to pay such as medical bills, credit cards, bank loans, business debts, overdraft charges and utility bills. Not all unsecured debt is dischargeable.

• Stop creditor harassment. After you file a bankruptcy petition, the automatic stayprotection immediately works to prohibit creditors from calling, billing, threatening, suing or taking any measures to collect from you. After you file a Bankruptcy Petition, even secured creditors must get court permission to repossess your car or foreclose on your home.

• Give you the opportunity to catch up on your car and/or mortgage payments.

You are probably wondering: “How does one qualify? How long does the process take? How will bankruptcy affect my credit? Will I lose everything I own?”

An individual contemplating bankruptcy should seek out as much information as possible as the process is complex and will have a major impact on your life. Bankruptcy for many people is the best answer, and can provide immediate relief both personally and financially. There are many factors to consider before filing for bankruptcy and scheduling a legal consultation will help in providing you answers to any questions you may have.

Bankruptcy is federal law, but individual states have unique exemptions — so it is best to seek out a competent, professional and experienced local bankruptcy attorney like Attorney DeGray, who’s legally bound to provide you with the best counsel possible for your unique case.

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