Frequently Asked Questions

When you file a bankruptcy with the court, the court order goes into effect immediately and all collection activity must stop. This includes stopping foreclosures, garnishments, repossessions, creditors calling and harassing you, and even collection efforts by tax authorities. The sooner you come in to the law office, the sooner you get relief (as long as we are able to file your case with the court immediately) and the more money you can save from your creditors. You will have a 341 meeting within three to six weeks of your bankruptcy filing. When the bankruptcy is finally over, you will receive a discharge order issued by the court. It is extremely important for you to hang on to your copy of this discharge order, even though the original is filed by the court. You will need this for future credit and we charge for copies, as we’ll have to go to our warehouse, pull your file and make an extra copy for you. The discharge order is the final and permanent order to stop all collection activities, and declaring that the debts are non-collectable.

The Fair Debt Collection Practices Act (FDCPA) prohibits a collection agency from doing certain things:

1. Collection agencies are not allowed to contact a third party unless they are trying to locate the debtor.
2. Collection agencies are prohibited from contacting a debtor if they are represented by a lawyer unless the debtor or the lawyer gives them permission.
3. No contact is allowed to be made before 8am or after 9pm by these agencies.
4. The FDCPA prohibits any harassment, threats or abuse, obscenity, or the use of violence.
5. The FDCPA prohibits the agent from lying about a debt, concealing their identity, using false or misleading statements, adding penalties, fees or interest to the amount owed, or from depositing post-dated checks ahead of schedule.
6. The act requires a collection agency to first contact the debtor via an introductory letter which advises them, among other things, of the amount of the debt, name of the creditor, what to do if they feel that the debt is not valid, and that the collection agency will provide verification of the debt if it is disputed.

Your Chapter 7 Bankruptcy case can sometimes be filed in the same day if it is an emergency. Typically, cases in my office are filed within 1 week of your initial consultation with my office. The amount of time to file depends on the complexity of your case.

Typically no, you may keep your house, car, and furniture if you remain current on your home and car payments. You will almost always keep all of your furniture because Bankruptcy Law protects it from seizure by creditors.

Bankruptcy does affect your credit, but for many people the damage from unpaid debts has already happened. Before a petition is filed, my office pulls a 3-bureau credit report that shows your current estimated score and an estimate of where it could be about 15 months after filing. For many clients that projected score is higher than the pre-filing score, but no result can be promised. A discharge ends your legal responsibility for the debts. It does not require accurate history to be removed from your credit report. Discharged accounts may keep appearing, and the bankruptcy itself can remain for up to 10 years (Chapter 7) or 7 years (Chapter 13). After your discharge we help you review your reports and dispute anything inaccurate, such as an account that still shows a balance owed. You can start rebuilding your credit right away, and many clients are offered credit cards soon after discharge.

If you owe tax debt, one option is to file a Chapter 13 Bankruptcy. You can pay most of your tax debt back through the plan over time. In many cases, further interest and some penalties stop adding up once you file, although tax claims secured by a lien can still accrue interest, and the result depends on the type of tax and the year it arose. At my office, if an individual has tax debt we order and review IRS transcripts to test the 3 year, 2 year, and 240 day rules. If those tests are met, the tax debt may be dischargeable, depending on the type of tax, any lien, and your filing history.

A chapter 7 is normally open for about three to four months. A chapter 13 is normally open for a minimum of 3 years and a maximum of 5 years.

For a Chapter 7 up to 10 years and for a Chapter 13 up to 7 years.

No. The 2005 law added paperwork, credit counseling and a means test, but most people who need bankruptcy relief can still file. Whether you qualify for Chapter 7 or need Chapter 13 depends on your income, household size and situation, and Mr. Waldner will review that with you in your free consultation.

Generally no. Federal law (28 U.S.C. § 1408) ties where you file to where you have lived, had your principal place of business, or had your principal assets for most of the 180 days before filing. The court sets the location of your meeting of creditors. Some situations allow a choice of court, and Mr. Waldner will confirm the proper one for you.

Absolutely. A good strategy is like a chess game and should be pursued with the most experienced bankruptcy attorney.

Whether you file a chapter 7 or a chapter 13 may be ultimately up to you. I certainly will give you my recommendations. Due to the amendments, it may not realistically be possible to file a chapter 7; however, I will always entertain that option with you and give you my advice thereon. Each chapter has its benefits, but it is most import to know your options.

Not showing up to the hearing and not listing all your assets and debts. Failure to show up to the hearing can result in your case being dismissed. Failure to disclose all your debts can be grounds for a dismissal and prosecution, and it can cause you to owe the debt after the bankruptcy is finalized. Also, under-estimating your tax refund can be a crucial mistake. The best policy is to provide your attorney with the best, most accurate information possible.

Anything is possible. Whether your case is approved depends on your facts, the applicable law, the court’s decisions, and whether every required step is completed. Doing everything correctly and disclosing all information fully gives your case its best chance, but no result can be guaranteed.

Unfortunately, I do not normally take personal checks. The exception to this is if it is a partial payment, with a strict understanding that your case will not be filed until the check clears, payment is made in full, all necessary documents are provided, and you meet at a sufficient time with my office personnel, sign all necessary papers, and provide all requested documentation, I will accept your check. However, we absolutely will not accept any personal checks if you wish to have your case filed within two weeks. In other words, I require two weeks for a personal check to be cleared to my bank account.

No. We use up to the minute credit reports which are “tri-merge” and merge together all three credit reporting agencies, (i.e. Equifax, TransUnion, and Experian).

Yes.

No. You can file jointly or alone. If you file alone, a debt you owe jointly can still be collected from your spouse, and your household income is still reviewed.

Not if your spouse is not a filer. Your spouse’s own credit is not changed by your filing, except joint accounts and debts your spouse co-signed, which can be affected and can still be collected from your spouse. Mr. Waldner reviews those before you file.

Generally no. An authorized user is not responsible for the debt, but a spouse who signed the application or is a joint holder is.

If your spouse signed the original application or any addendum, then your spouse would be responsible for your credit cards.

In a Chapter 7, generally not: your cosigner stays responsible, and the creditor can pursue them. In a Chapter 13, there is a co-debtor stay for consumer debts only. While your case is open, the creditor is not allowed to try to collect from your cosigner (codebtor) on a consumer debt. The stay does not cover business debts, and your cosigner is fully protected in the long run only if the debt is paid in full through your plan. Read more about the Chapter 13 co-debtor stay and what happens to cosigners in bankruptcy.

No. If it is a corporation, you own the stocks, as assets of the corporation. If you do not have a corporation, then you are the business. The good news is that, generally speaking, the court is only interested in the liquidation value of the assets. Therefore, this is a very important issue to discuss with your bankruptcy attorney.

A debt based on embezzlement is treated differently from ordinary debt. Under the Bankruptcy Code, a debt for embezzlement, larceny, or fraud while acting in a fiduciary capacity can be held non-dischargeable, and that exception applies in Chapter 13 as well as Chapter 7. So filing does not automatically erase this kind of debt, and Chapter 13 is not a general way around it. A bankruptcy discharge is also different from a settlement an employer agrees to, which would be negotiated separately and depends on the facts. Whether any of the debt can be discharged, and the best way to handle it, depends on the facts and where things stand (for example, whether there is a lawsuit, a judgment, or a criminal matter). Please raise this with Mr. Waldner in a confidential consultation before you file anything.

In New York, the cash surrender value is often exempt in bankruptcy, but whether it is protected depends on the policy and how it is structured. A life insurance policy has an owner, an insured, and a beneficiary, and being named the beneficiary does not make someone the owner. If you own the policy, its cash surrender value is generally part of your bankruptcy estate unless an exemption protects it. If someone else owns a policy on your life, it is generally not your asset. Bring the policy to your consultation so we can review who owns it, who is named as beneficiary, and which New York exemption applies.