The typical Chapter 7 bankruptcy case lasts 90 days after filing the petition. The meeting of creditors is 30 days into the process, and if all goes well, a Discharge of Debtor certificate is issued approximately 60 days later. Once the discharge is issued, no creditor can attempt to collect on the discharged debt. The court can even issue fines to any creditor who violates the discharge. While certain debts like alimony, child support, student loans, and certain taxes are not dischargeable in bankruptcy, most other debts will be discharged with a Chapter 7 bankruptcy petition. Before the bankruptcy discharge is issued, however, the debtor must complete a second “education course”. The financial management course lasts 3 hours and can be taken by telephone or through the internet.
Bankruptcy Court Hearings
In most Rhode Island Chapter 7 cases, the debtor does not typically go before a judge in the US Bankruptcy Court. However, if there is evidence of wrongdoing, a court hearing may be scheduled. Understand that the bankruptcy trustee knows exactly what to ask at the meeting of creditors to uncover any “bad behavior”. That is why it is so important to fully disclose all facts to your attorney before your case is filed. There should be no undisclosed transferring of property to friends or family members in an attempt to hide it. Anyone who files a bankruptcy petition containing fraud or material misstatements may be subject to criminal prosecution.
Sometimes people make poor financial decisions out of desperation. They become short-sighted and only think about surviving this month’s bills. If your present monthly expenses exceed your monthly income, you need help now. Many debtors have put their families in financial peril by making quick decisions without competent legal advice. Attorney Buckley can take a complicated financial situation and design a plan to help protect property and obtain a fresh start.
Meeting of Creditors
Once a Chapter 7 case is filed, a meeting of creditors (aka 341 Meeting) is scheduled 3-4 weeks later. At the meeting, the debtor is asked questions by the bankruptcy trustee and any creditor who chooses to attend the meeting. The debtor must bring a state issued photo ID and Social Security card and be prepared to answer questions about their income, expenses, how their debt was created, and anything else the trustee needs clarification on. In a half-hour segment, a trustee can hear about 6 cases. If a case is extremely complicated, it can be continued to a second hearing date to allow time for more questioning.
Attorney Buckley will thoroughly prepare you for the meeting of creditors. You will be given a list of common questions and you will practice your answers with Attorney Buckley before the meeting. The Providence meeting of creditors takes place in the city at The Federal Center, 380 Westminster Street, 6th floor, Room 620 and there is parking right outside the building.
Filing for Bankruptcy
Each debtor is now required to take two “educational courses” as part of the bankruptcy process. The first course is a credit counseling course to explore alternatives to bankruptcy. It must be taken within 180 days prior to filing for bankruptcy relief. The credit counseling course lasts 90 minutes and can be taken by telephone or through the internet. Upon completion of the credit counseling course, a certificate is issued which must be filed with the bankruptcy petition. The next step is to prepare the bankruptcy petition. The average Chapter 7 bankruptcy petition is about 50 pages in length. It describes the debtor, his property, his monthly income and expenses, his creditors, what his financial life has looked like over the past few years, and whether he satisfies the means test. Also, pay stubs and tax returns are required by the trustee to verify the petition’s accuracy. Once the debtor signs the bankruptcy petition under penalties of perjury, it is filed with the US Bankruptcy Court. A trustee is then assigned to the case, a date is set for the creditor’s meeting, and all creditors are notified by the Bankruptcy Court to stop all collection activity.
Attorney Buckley has streamlined the bankruptcy process for his Rhode Island and Massachusetts clients. After an initial phone consultation, an in-home appointment is scheduled. Attorney Buckley will then ask all the questions necessary to prepare the bankruptcy petition, pre-register you for the two education courses, download your credit reports and file your case for hearing in Providence, Rhode Island. (Massachusetts clients will usually have their hearings in Brockton or Boston.) His goal is to be so thorough in the interview process, that the meeting of creditors is virtually stress-free. To date, every case filed for bankruptcy relief by Attorney Buckley has been approved.
Limits of Bankruptcy
There are some debts that cannot be discharged in a Chapter 7 bankruptcy. These include child support, alimony, certain tax obligations, most student loans, and debt incurred through wrongful conduct or at a time when there was no ability to repay. Another limit of bankruptcy is that if the debtor intends to keep his secured property (i.e. house and car), he must continue to make regular payments. While bankruptcy can prevent an impending foreclosure, it should not be used merely as a stalling tactic if there is no desire and financial ability to keep the property. Also, bankruptcy will not protect the fraudulent transfer of assets, hiding of assets, or one who makes false statements in a bankruptcy petition. Another limit is the number of times one can file bankruptcy; a debtor must wait 8 years between Chapter 7 bankruptcy filings.
In balance, bankruptcy should help an honest debtor start fresh while also protecting the interests of certain other parties. Do not be tempted to pay back family members with income tax refunds, take out cash advances from one card to pay another, sell or transfer property to anyone for less than full value, or fail to disclose all property you may have owned in recent years. You also need to be careful not to use your credit cards up to the last second. Creditors could argue that you “knew, or should have known” that you used the cards when there was no ability or intention to repay the debt. If your monthly net pay is not enough to handle your present monthly living expenses, do not continue to use your credit cards to make up the difference. These are just a few of the common mistakes that could prevent you from getting the protection you need.