The following are some frequently asked questions and answers about Bankruptcy. This is not intended to be used as legal advice. If you have further questions, please contact the Law Office of William Waldner to speak with an attorney about your options.
What happens when I file?
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.
What is the FDCPA and how does it apply to collection agents?
The Fair Debt Collection Practices Act (FDCPA) prohibits a collection agency from doing certain things:
- Collection agencies are not allowed to contact a third party unless they are trying to locate the debtor.
- Collection agencies are prohibited from contacting a debtor if they are represented by a lawyer unless the debtor or the lawyer gives them permission.
- No contact is allowed to be made before 8am or after 9pm by these agencies.
- The FDCPA prohibits any harassment, threats or abuse, obscenity, or the use of violence.
- 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.
- 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.
How long does it take to file for Bankruptcy?
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.
If I file for Chapter 7 Bankruptcy do I have to give up my house, car and furniture?
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.
If I file for Bankruptcy, will my credit be destroyed?
At my office before a petition is filed, a 3-bureau credit report is pulled. The report will show your current estimated credit score as well as your anticipated score 15 months after Bankruptcy is filed. Quite often, the predicted 15 month score is many points higher than the pre-filing score. This is because most of your debts listed on the report will be eliminated and can be taken off your credit report shortly after your discharge is granted. Our firm is unique in that we don’t leave you at the court house steps to deal with your credit on your own. We are happy to help you get these debts off your report after your discharge. Right after you file for Bankruptcy, you can immediately start building your credit. In fact, often our clients are offered credit cards shortly after they are discharged from their debts. One reason some lenders offer credit to people who have filed for Bankruptcy is that they know that the person cannot receive another Bankruptcy discharge for many years. With that in mind, these lenders often feel comfortable that they will have several years to collect on any new debts without the fear that the debtor cannot get out of future debts through the Bankruptcy process.
One option here is to file for a Chapter 13 Bankruptcy. You can pay most of your tax debt back interest free, and you may be able to avoid paying penalties. 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. Often times, if the test is met the tax debt is considered to be unsecured debt and dischargeable through Bankruptcy.
How long will bankruptcy take?
A chapter 7 is normally open for 3-4 months. A chapter 13 is normally open for a minimum of 3 years and a maximum of 5 years.
How long will Bankruptcy stay on my credit report?
For a Chapter 7 up to 10 years and for a Chapter 13 up to 7 years.
Didn’t the 2005 changes in Bankruptcy Law make it impossible to file for Bankruptcy?
The Bankruptcy Bill that became law in 2005 actually made it easier to qualify for Bankruptcy. However, more paperwork is required and more details are needed to file, but almost everyone qualifies when represented by a competent attorney.
Can I go to court other than near where I live?
No. Pursuant to local rule and federal law, you must file in the jurisdiction wherein you resided last, and you must go to court, pursuant to local rule, in the proper venue (i.e. nearest place where the meeting/court is held).
Can I plan my bankruptcy?
Absolutely. A good strategy is like a chess game and should be pursued with the most experienced bankruptcy attorney.
Can I file chapter 7?
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.
What are the most common mistakes when filing?
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.
Is it possible for the court to not approve my chapter 7 or chapter 13?
Anything is possible. However, if everything is done correctly and all information is fully disclosed, there is a 99% chance your case will be approved.
Do you take personal checks?
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.
Can I provide my own credit report?
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).
Can I file jointly with my spouse?
Does my spouse have to file?
Will this affect my spouse’s credit?
Is my spouse responsible for my credit cards if they are an authorized user?
When would my spouse be liable for my credit cards?
If your spouse signed the original application or any addendum, then your spouse would be responsible for your credit cards.
Will my cosigner be protected?
No, generally not. The only way to protect your cosigner is with a chapter 13 wherein the credit in question is paid 100% plus interest.
Can I file a personal bankruptcy and not have it affect my business?
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.
What if I embezzled money from my employer and he is demanding back money?
If you file a Chapter 7 Bankruptcy and your employer does not dispute the discharge in Bankruptcy, you may be able to discharge that debt. If he does dispute the debt you can file for a Chapter 13 and perhaps negotiate the debt to pay a portion of the debt, discharging the balance.
I have a life insurance policy and my daughter is listed as the beneficiary and it has a cash surrender value. Is this policy exempt?
In New York, the cash surrender value is exempt in Bankruptcy. Similarly, the beneficiary owns the policy, so it will not become a part of the Bankruptcy Estate. Even if spouses file together and list each other as beneficiaries, the policies are still exempt.
If you have any further questions, please contact the Law Office of William Waldner and speak with one of our attorneys.