Articles Posted in Chapter 13

When you file for bankruptcy, every debt you owe must be completely and accurately disclosed. The process does not permit you to pick and choose which debts you’d like to leave behind. Intentionally omitting debts or assets from your filing may prevent those debts from ever being discharged, the dismissal of your case, fines and even imprisonment.

The bankruptcy court requires that you engage in due diligence to determine your debts and to identify any and all potential creditors. This means that you are required to make a real effort to track down the money you owe and to whom it’s owed. You need to sit down and go through your credit report, account statements, collection notices, and other information pertaining to the existence of debt. When you sign your bankruptcy petition, and testify at the Meeting of Creditors, you are telling the Court that your petition is true, accurate and complete. This is important to you because bankruptcy courts will only result in the discharge of those debts where the creditor received notice.

What if you accidentally leave someone off the list? If you neglected to list a creditor and you have not yet received a discharge, it is possible to file an amended schedule of your debts to include the missing debts for a fee of $30.00. This means a new list of debts must be created and in some cases, a Motion for Leave to Amend Schedules must be granted. The Court will most likely allow the change but there is a filing fee associated with this process. The Court will then give your newly mentioned creditor time to object to having the debt discharged.

If you have filed bankruptcy in the past and you have fallen victim to the recent plummet in the economy, you may be wondering how many times you can file bankruptcy. Whether you are allowed to re-file for bankruptcy depends on whether or not you received a discharge under your most recent bankruptcy filing and what kind of filing you made in the first place.

While there are no limits on how many times you can file bankruptcy there are limits to how often you can file. If you received a discharge under a Chapter 13 bankruptcy case, then you cannot file for relief under Chapter 7 unless:

1. Six (6) years have passed since the discharge in the Chapter 13 case; or

One of the most powerful effects of filing a bankruptcy is the Automatic Stay. This Automatic Stay prevents any collection attempts from being made upon the debtor. Thus, every person that the debtor owes cannot continue to pursue the debtor for repayment of the debt.

There are some situations, however, when the automatic stay might not be able to prevent other court proceedings from continuing, at least in part. One of those situations is in family law cases involving child support and custody. Proceedings that are concerned with visitation or with current payment of child support are generally not subject to the Automatic Stay, which means those proceedings will continue despite the debtor having filed for bankruptcy. However, cases that involve past due child support may be subject to the Automatic Stay. These matters will continue if the stay is lifted by bankruptcy court order or once the bankruptcy proceeding has concluded. Sometimes family law judges in such cases will not hear any issues at all, including current child support obligations and current visitation matters, until the Automatic Stay has been lifted.

It is necessary for all debtors to understand that even though the Automatic Stay may stop court proceedings, if there is an order for current child support or alimony already in place, those amounts will continue to accrue. In other words, if an individual is ordered to pay child support or alimony each week, he or she is still required to meet this weekly obligation after a filing for bankruptcy.

Many people ask me whether or not “Pay day” loans can be included in a bankruptcy. Unfortunately, the classic legal answer is, “It depends.”

A “Pay day” loan is one where an institution offers a loan equal to a portion of your next pay check. Typically, you have to provide evidence of what that paycheck will be by showing prior check stubs. When you get paid, you are then obligated to pay the loan company back. Many of these companies will take post-dated checks or will schedule an automatic debit on your account.

When the “Pay day” loan was taken out is the most important factor in determining whether the debt can be discharged in a bankruptcy. For instance, if a “Pay day” loan were taken out just weeks before the bankruptcy, there is a presumption that the loan was taken out with the intent to defraud the creditor. In these cases, it’s up to the person filing to prove that they were not trying to be fraudulent. It is best not to get into these situations and to make a good faith attempt to repay the loan prior to filing.

As I was doing research for this blog post, I came across a treasure trove of information on the subject of bankruptcy. Surprisingly, much of the information is supplied by the federal government itself. On the official website for the federal courts, USCourts.gov, the government provides you with all of the necessary information on the basics of bankruptcy. Although it is remains the advice of this firm to always have experienced bankruptcy counsel if you decide to file, this website will provide you with the background information on what a bankruptcy is, which version may be best for you, and the appropriate procedure to successfully accomplish the task.

Article I, Section 8 of the U.S. Constitution gives Congress the power to make and enact bankruptcy laws. Using that power, Congress in 1978 passed the Bankruptcy Code. It can be found in Title 11 of the United States Code. The Bankruptcy Code provides all of the laws that govern bankruptcy. Along with the substantive law, there is a set of procedural standards that must be followed, called the Federal Rules of Bankruptcy Procedure, those rules along with any local rules of the district where the bankruptcy court is located, provide the procedure that govern all bankruptcy proceedings.

Although a bankruptcy is presided over by a federal bankruptcy judge, most of the action in a bankruptcy action takes place outside of the courtroom. The process is typically overseen by a bankruptcy trustee who is appointed by the court. When the case goes before a judge, it is the judge who decides whether a debtor is eligible to file for bankruptcy, whether a debtor’s debts can be discharged in bankruptcy, as well as other matters.

The recent rejection of Natalie Suleman’s bankruptcy petition illustrates the importance of having counsel when filing for bankruptcy. Suleman’s petition filed in April only included the first five pages of a normal petition and a mailing list of her creditors that failed to indicate their priority.

A typical bankruptcy petition is between forty and fifty pages. Many of the pages missing were those that outline the income, expenses, assets and liabilities of the debtor. A general summary of some of these items is featured on the first page of the petition, but since the other sections were omitted, it is impossible to really know what Miss. Suleman owed, owned or if she even qualified for a Chapter 7 bankruptcy.

Taking into account that she did not hire an attorney, failed to file proper paperwork and appears to have filled out the petition on a type-writer (which is uncharacteristic of modern petitions), I have serious doubts about the legitimacy of her intent to file for Chapter 7 bankruptcy protection. This may have been a cry out to energize the public’s interest in her to restore the celebrity status she once enjoyed. Although filing a sham petition to make money appears to fall in line with the intentions of the bankruptcy system as it helps someone who can’t pay their bills, it is an unorthodox and reproachable method.

A recent article in Forbes states, “Octomom Files for Bankruptcy, because our Bankruptcy Laws Are Great”. While this seems to quote Nadya Suleman (The Octomom) as having made such a statement, the term “great” only comes up in their article in a quote from the french political philosopher, Alexis de Tocqueville who said in relevant part: “There is no American legislation against […] bankruptcies. Is that because there are no bankrupts? No, on the contrary, it is because there are many. In the mind of the majority the fear of being prosecuted as a bankrupt is greater than the apprehension of being ruined by other bankrupts…” What Tocqueville says here is not that the bankruptcy laws of the United States are great, but that because we as individuals see so many bankruptcies in our friends and neighbors that we realize that the possibility of our own bankruptcy as possible reality. This causes us to fear anti-bankruptcy legislation because we may one day need the relief ourselves. The fear of losing the ability to go bankrupt as a debtor is greater than the fear of losing the money we are owed as creditors. This is interesting because we don’t enter into the same kind of analysis when forming other laws. For instance, we don’t prevent laws that punish murder because we know as individuals that we may one day murder someone. This proves that there is something unique when it comes to bankruptcy, which I believe to be the public opinion that bankruptcy happens in large part by no fault of the debtor. It is well understood that medical debt, unexpected job loss, natural disaster, having eight babies, etc. are “out of our hands” as individuals. If we believe this negates the responsibility, we are less likely to punish people for it.
Octomom has filed for bankruptcy due to her financial inability to care for such a great number of children on her own. She may be an extremely unlikely example of a scenario that could happen to anyone but having a similar scenario could bring about the same result. I personally know someone who had unexpected twins. This caused an unexpected financial hardship and they did in fact file for bankruptcy, though they didn’t indicate the kids were the cause (who with other places to point the blame would?).
The causes of bankruptcy are vast, frequent and are well recognized as being indiscriminate in whom they afflict. If you, like so many successful Americans before you, would like to explore your options in bankruptcy, contact a Duval County Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

When people think of foreclosures these days they know bankruptcy may not be far behind, but it’s the amount of bankruptcies brought about by medical debt that’s most astonishing. Back in 2009 medical bills were cited as the cause of more than 60% of all U.S. bankruptcies. This occurred despite 78% of those people having some form of health insurance. It’s the gaps in the insurance, the deductible and benefit limits that cause the majority of medically bankrupt people to be unable to pay their bills. Now in 2012, with foreclosure rates flying higher than we ever thought the percentage of bankruptcies caused by medical issues has gone down to 20%, but this is more likely due to the enormous increase in foreclosure related bankruptcies rather than a decrease in medical bankruptcies as a whole.
Unfortunately, not everyone who files a medical bankruptcy does so at the right time. If a case is filed before the person has recovered from their surgery or illness, there may be other bills that the person is unable to pay. The outcome of these cases are people who owe money they can’t repay and who aren’t eligible for a bankruptcy discharge for up to eight years.
If you’ve suffered a major illness or medical expense that won’t be covered by your insurance, you should contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 to discuss your options.