Law Office of David A Bhaerman

Any time a creditor tries to collect a debt that you owe as of the filing of your case, or to repossess your property without the bankruptcy court’s permission, are violations of the “automatic stay.” If the creditor repossesses any of your property, i.e. a car or boat, after you file a bankruptcy case, the creditor is required to return the property to you. The court may decide to punish a creditor who violates the automatic stay. The creditor may be liable to the debtor if any harm is caused. This is why it’s so important to list all your creditors on the schedules filed with your case. The court sends out notices of the automatic stay, and if a creditor isn’t on your list filed with the court, they may not receive a notice of the bankruptcy. If a creditor contacts you after you have retained an attorney, give the creditor your attorney’s contact information. Just inform them that you are filing, or have filed, bankruptcy.

For a Chapter 7 bankruptcy case, the current filing fee is $335. For a Chapter 13 case, the current filing fee is $310. The Bankruptcy Trustee may also charge a $15 or $20 administrative fee, and you may also pay the filing fee in installments. In some cases, the court may waive the filing fee in a Chapter 7 bankruptcy case if your income is below a certain amount, and the court finds that you cannot pay the filing fee in installments. In addition to the court filing fees, we charge a fee based on the type of case you need to file. Contact our office to discuss your details, as every case is different.

There are essentially four types of bankruptcy available to individuals: ● Chapter 7, which can discharge most consumer debt, and allows you to keep certain “exempt” property. Any property excluded from exemption is sold by the Bankruptcy Trustee to pay a portion of your debt. This type of bankruptcy can take up to six months to complete. ● Chapter 13, in which you agree to a Trustee-supervised repayment plan to repay a portion or all of your debt. This type of bankruptcy can last three to five years. ● Chapter 12 is similar to Chapter 13, but it’s only available to family farmers and fishermen. ● Chapter 11, a much more complex process utilized primarily by business debtors. It’s sometimes used by individuals with substantial debts and substantial assets. The two most common types of bankruptcy cases for consumers are Chapter 7 and Chapter 13.

Chapter 13 Bankruptcy is a court-managed repayment plan for some of your debts. To qualify for Chapter 13, first you must have regular income. This doesn’t necessarily need to be from a job, but can be from benefit payments like disability or unemployment, or from rental income. Second, your debts cannot exceed $1,184,200 in Secured Debt (i.e. home mortgages and auto loans) and $394,725 in Unsecured Debt (like most consumer credit or credit card debt). These numbers increase every three years to reflect changes in the consumer price index.

Chapter 7 Bankruptcy is designed for individuals who primarily have consumer debt (i.e. credit card debt). If you wish to have that debt discharged under bankruptcy law, your attorney will take a look at your financial picture to see if you can afford to pay your creditors. He will apply the state’s “Means Test,” essentially comparing your income and living expenses against a set formula to see if you qualify. If you earn too much, it’s possible you will not qualify for Chapter 7. If your income is at or below the median income for your state (the Means Test), you will be permitted to file Chapter 7. If your income is above that amount, you may be eligible to file Chapter 13 Bankruptcy.

When a debt gets "discharged," the debtor (person filing for bankruptcy) no longer legally has an obligation to repay the debt, and the creditor is not allowed to attempt to collect on that debt any longer. Not all debts in a Bankruptcy case will be discharged. Unpaid tax bills and student loans are two types of debt that may not be discharged in a Bankruptcy case.

"Automatic stay" is one of the most important parts of a Bankruptcy proceeding. It is an injunction that immediately and automatically stops lawsuits, foreclosures, garnishments, and all collection activity against a debtor the moment a bankruptcy petition is filed with the Bankruptcy Court. The automatic stay is a temporary move to give you time to work your way through your Bankruptcy case.

The moment you file for bankruptcy, an "Automatic Stay" immediately goes into effect, protecting you from your creditors. They must stop calling you or sending letters to you to collect the debt. If a creditor sued you, that lawsuit is also stopped. The automatic stay also prohibits creditors from repossessing your property or foreclosing on your home.

Dianna, Sorry, no. My practice is limited to Chapter 7 and 13 bankruptcy filings for individuals, families and small businesses.