Most clients are not familiar with the federal bankruptcy process, and unfortunately, there is an enormous amount of information to take into consideration. Bankruptcy clients always seem to think of “one more question” after they leave the office. The more information our office provides, the more comfortable and helpful our clients are with the debt relief process. This is a general list of questions that may help, but please keep a list of your personal concerns for your bankruptcy attorney to discuss with you during your initial meeting.
What do I have to do before I file?
(1) Credit Counseling with a court approved agency. This is typically an online program that involves a series of questions and answers. Details regarding this will be given at the consultation.
(2) Gather the documents required for your attorney and fill out the questionnaire(link). Do not worry if you cannot locate all documents before the first meeting with your bankruptcy attorney.
What property can I keep?
Exempt property can be kept “for free.” This is property that cannot be claimed by the creditors. NC has a list of exemptions for their residents, as does each state. There is also a list of federal exemptions that apply in some cases. NC has exemptions for real estate, cars, income from employment, IRAs, life insurance and many others. An in depth analysis of each individual’s circumstances is necessary. Exemptions are the reason why most people get to keep their house, their car, their retirement and other items when they file for bankruptcy.
Can I keep my car?
In most cases “yes.” Debtors have a lot of choices regarding a vehicle. If payments are current, you may decide to continue paying under the current contract. If you are behind, payments may be “caught up” in a chapter 13. If you are “underwater” on a car you have had for more than 910 days, the balance due may be reduced to the current value of the car. You may also choose to give up a car if you owe too much or no longer need or want the vehicle.
Can I keep my house?
In most cases “yes.” Debtors have a lot of options regarding homes. If you keep the home, you must pay the first mortgage owed as well as other liens on the property. Past due payments can be caught up in a Chapter 13. Depending on the value of the home, the second mortgage or equity line may be stripped off. Judgments may also be removed.
What can I own after bankruptcy?
All property that was exempt will be owned by you after bankruptcy.
Do I have to go to court?
All debtors must attend a “341 Meeting of Creditors.” This is held at various locations (not at the county courthouse). In some locations it is in a meeting room much like a fellowship hall. In some locations it is in a courtroom. A judge is not present. The bankruptcy trustee assigned to your case will ask several questions regarding your individual situation. His primary purpose is to insure that you have listed ALL of your property and ALL of your debts on the petition. In addition a Chapter 13 trustee discusses the proposed Chapter 13 plan amount.
What happens if I forget to list something on my petition?
Minor mistakes can be corrected. Typically people forget a car they put in their name because their child was too young or the bank account they are listed on with their child. You will be given a list to help you list all property that you have an interest in. Debts that are omitted by mistake can be added later. However there is an additional fee for amending, so it is important to list all property and debts on the original questionnaire.
What if I “forget” something on purpose?
Hiding assets from the court is a REALLY BAD idea. Bankruptcy fraud is a federal criminal offense!!! Trustees have lots of tools to help them find hidden assets. They have internet searches, disgruntled ex-spouses, angry creditors etc…. Most items can be retained if properly disclosed and planned for. Make every effort to tell your bankruptcy attorney about all your property interests in all property you have.
What do I do first if I want to further explore my options?
The initial consultation is free. Call and schedule an appointment. Try to gather as many of the items on the “Required Documents” list as you can. Do not worry if you cannot get them all together before the consultation. We will talk about your individual situation and discuss your options. Following the consultation, you can think about your options and make your decisions. The more informed you are, the better the decision you will make.