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Legal Procedures faced by consumers when bankruptcy filed

Date: Tue, 07/19/2005 - 17:31
Submitted by roxette on Tue, 07/19/2005 - 17:31
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The legal procedure followed by the consumers when bankruptcy is filed.

Chapter 7 bankruptcy

When a person files for chapter 7 bankruptcy, he has to go through legal formalities by filling some forms. It will list his income and expenses, assets, debts and property transactions for the past couple of years. The cost of filing chapter 7 bankruptcies is $200. Those people who receive public assistance or those who live below the poverty line do not require paying this fee. Then a court appoints a person who is known as the trustee to oversee your case.

After a month of filing the bankruptcy, you need to attend one short meeting of the creditors. The trustee reviews your forms and he is likely to ask you any questions. Creditors rare attend this meeting. If there is any property which is non exempted, you have to give it or the value of it in cash to the trustee. This meeting hardly lasts for five minutes.

Three to six months later after filing for bankruptcy, a notice is sent to you from the court which will state that all the debts that have been mentioned in the bankruptcy filing have been successfully discharged. After this, your case is over and will stay in your credit report for a period of 10 years.

Chapter 13 bankruptcy

Chapter 13 bankruptcy is a little bit different from the chapter 7 bankruptcy. While filing for this bankruptcy, you have to fill in the same forms and also a repayment plan. In this plan, you mention that you are willing to pay your debt over the next three to five years. The cost of filing Chapter 13 bankruptcy is $185 and just like what happened in the chapter 7 bankruptcies, a trustee oversees your case.

In the chapter 13 bankruptcy, a meeting is held where one or two creditors attend it especially when they don't like something in your plan. After the meeting with the creditors is over, you attend a hearing before the bankruptcy judge who either confirms or denies your plan. If the judge confirms your plan, you are required to pay all the debts under your plan. Most likely, you will receive a discharge of any balance owed at the end of the case.

Some of the debts that are non dischargeable in chapter 7 and chapter 13 bankruptcy are as follows. If you file for chapter 7 bankruptcy, they will remain when your case is over. If you have filed for chapter 13 bankruptcy, these debts have to be paid to your creditors in full. If the debt is not paid in full, it will remain at the end of your case.

Non dischargeable debts

  • The debts that have been not been mentioned in the bankruptcy papers

  • Child support and alimony

  • Debts for personal injury or a death caused by your intoxicated driving.

  • Student loans unless if it becomes very difficult for you to repay.

  • If you have violated the law, any fines and penalties imposed on it.

  • Any tax debt or the income tax debt.

There are some debts in chapter 7 bankruptcy that can be challenged by the creditor when you request to discharge them. Under such circumstances the bankruptcy judge makes them non dischargeable. These debts can be discharged in chapter 13 bankruptcy if you include them in your plan and at the end of your case, the balance can be wiped off.

  • A debt that resulted on the basis of fraud, such as you gave false statements while applying for credit.

  • If you have purchased worth $1,150 or more in credit for luxury good or services within 60 days of your filing bankruptcy.

  • Any types of loans or cash advances taken worth $1,150 or more within 60 days of filing bankruptcy.

  • Any debt that has resulted from willful or malicious injury to another person or another person's property

  • Debts resulted from breach of trust.

  • Debts that you owe under a divorce decree or settlement unless after filing for bankruptcy, you are unable to afford paying them.


Hi roxette

Thank you for this great piece of information.
It will be extremely for the community members and especially to those who are still in the dark about chapter 7 and chapter 13 bankruptcies. Thanks once again for this valuable information.

Regards
Peter


Submitted by peter on Wed, 07/20/2005 - 04:28

peter

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So, does this mean that if I told a little white lie when I received a payday loan and said I had no other loans out, I can still have the debt discharged if I put it on my chapter 13 plan? I have been worried about that. I am really an honest person, I was just desperate at the time and knew that I couldn't get another loan if I said I had other loans. I don't want my creditors to file any kind of fraud suit against me.


Submitted by genalewis on Tue, 10/04/2005 - 09:23

genalewis

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Hi genalewis

I truly understand your situation and feel for you. But now things are getting even more difficult with the new bankruptcy laws which will be put into effect from 17th October in this year.

Under the new bankruptcy laws, there is literally no way of getting the debt discharged except for a few serious ones who just won't be able to pay.

It might be tough but it is the fact. We will have to accept the new laws. The federal government has faced tremendous economic loss in the filing of bankruptcies. I guess these are all preventive steps.

Regards
Roxette


Submitted by roxette on Tue, 10/04/2005 - 12:05

roxette

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No, I'm saying that I WILL be putting all the loans on my bankruptcy. The thing is, in order to GET the loans, I stated on the paperwork that I didn't have other loans out when, in fact, I did. I am wondering if that will go against me.


Submitted by on Tue, 10/04/2005 - 22:06

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almightygem,

While filing Chapter 13 bankruptcy you should provide the details of all your assets and liabilities, otherwise how the repayment plan could be approved and how the court could understand your proper financial state?

I doubt if the loan you've not mentioned ever be discharged in bankruptcy. Moreover concealing your assets or liabilities is not ethical also. I think you should discuss the matter with your attorney as well.


Submitted by 4u.bryan on Wed, 10/05/2005 - 13:59

4u.bryan

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Quote:

No, I'm saying that I WILL be putting all the loans on my bankruptcy. The thing is, in order to GET the loans, I stated on the paperwork that I didn't have other loans out when, in fact, I did. I am wondering if that will go against me.


This was done in the past when you were trying to obtain the loan. You got the loan and the story ended. Now, when you are filing bankruptcy, you can decide on the debt that you want to include in it.

It has no relation with what you wrote to your lenders while getting the loan.


Submitted by roxette on Wed, 10/05/2005 - 16:46

roxette

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if spouse dies and he has chapter 13 -what happens to his chapter 13 filing


Submitted by on Mon, 01/09/2006 - 09:18

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Patrica,

Generally chapter 13 bankruptcy is dismissed if the debtor dies while the procedure is going on. However, it depends upon the bankruptcy court and the creditors too.

If it was a joint petition, then the other spouse is obliged to continue the case. Consult a bankruptcy attorney to discuss the issue in detail.


Submitted by 4u.bryan on Mon, 01/09/2006 - 10:26

4u.bryan

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