Information for Debtors
PLEASE READ CAREFULLY!
This information is provided to debtors to answer frequently asked questions about filing bankruptcy.
A. Once I have decided to file bankruptcy, what do I do if creditors call?
Collections calls from creditors are a common problem with debtors who have fallen behind in their payment obligation. Upon receiving the call, immediately provide the creditor with the following information:
- The fact that you have filed or are intending to file bankruptcy
- The bankruptcy case number (if you have filed)
- The name and telephone number of the lawyer
- Demand that the creditor cease all calls to you. The Fair Debt Collection Act allows you to demand that all calls cease.
B. In a Chapter 7 bankruptcy, will the court take my house?
The law in Florida provides that the house that you live in is your homestead and may be kept as exempt property depending on the equity in the property. The average debtor is usually able to keep his/her home. However, if there is a mortgage, you must pay the mortgage. The mortgage company will have the right to take the house if the mortgage is not paid. If you are behind in your mortgage, you should discuss chapter 13 bankruptcy with your attorney. Chapter 13 allows the debtor to initiate a payment plan to become current in mortgage payments. It also provides the opportunity to sorae debtors to avoid payment of a second mortgage and liens.
C. I am behind in my automobile payments, is there anything that may be done to avoid repossession?
Chapter 13 bankruptcy provides the Debtor with the opportunity of initiating a payment plan to avoid repossession. In certain cases, the Chapter 13 may provide the Debtor with the ability of altering the terms of the loan, that is, reducing the payment amount, lowering the interest rate and/or reducing the total amount needed to pay off the loan on the automobile.
D. What happens if I owe money to my bank or credit union and have a checking or saving account in that institution?
Some banks and credit unions will close or freeze your account upon notification of an account holder filing bankruptcy. This may result in unexpected inconvenience because outstanding checks will be returned and no funds may be obtained from the account. It is recommended that you open another checking or savings account in another institution prior to filing you case.
E. Will I have to go to court?
Yes, approximately ten (10) days after the filing of your case, the Debtor will receive a letter in the mail notifying you of the date, place and time to appear in court. The debtor must appear at the court for what is called a 341 meeting. The debtor must present a picture identification (driver's license) and social security card. If you do not have a social security card, please notify the attorney prior to the hearing.
F. What will happen in the hearing?
The trustee appointed by the court will ask you question about the documents you filed.
The questions usually asked in Chapter 7 are:
- What is your name and address?
- Did you read the bankruptcy information sheet of the U.S. Trustee? (A copy of this sheet).
- Is this your signature on the petition, the Schedules and Financial Affair?
- Did you read the document carefully before signing?
- Is it based upon you own personal knowledge?
- Are your documents true and correct to the best of your knowledge and belief?
- Have you accurately listed all your assets and all your debts?
- Are there any changes you believe need to be made to these documents at this time?
- When was the last time you used your credit cards?
- Does anyone owe you money?
- Have you consulted a lawyer for anything other than bankruptcy in the last five (5) years?
- Are you planning on suing anyone?
- Do you own or are you buying a house, land, condominium, and/or townhouse?
- Have you been in an automobile accident in the last five (5) years?
- Are you entitled to any inheritance or insurance proceeds from someone who has recently died?
- Are you purchasing a car?
- Do you intend to continue making payments on the car?
- Is the car insured?
- Where do you work?
- Have you ever filed bankruptcy before?
- Do you own any single item of personal property valued at $3,500.00 or more?
- Have you transferred sold or given any personal property in the last three (3) years?
- Is anyone holding any property that belongs to you?
Frequently asked Chapter 13 Questions
- What is your name and address?
- What is your home and work telephone numbers?
- Have you filed bankruptcy before using the social security number you presented here or any other social security number?
- Are you a United States citizen?
- Did you read and sign the schedules, statement of affairs, and plan?
- Are they true and correct to the best of your knowledge and belief; and are they based on your personal knowledge?
- Did you list all of your assets and debts?
- Are you entitled to life insurance proceeds, an inheritance, property, or gift as a result of someone's death, or from someone who has recently died?
- Does anyone owe you any money?
- Are you suing or planning on suing anyone to recover money?
- Do you own real estate?
- Are you making payments directly to family members, IRS, student loans, credit cards, or any other creditors?
- How did you get behind, what happened?
- Have you paid anyone else other than your lawyer for bankruptcy, foreclosure or refinancing help?
- Have you transferred any property in the last two (2) years?
- Have you made any payments larger than $600.00 to any creditor in the last year?
G. Why is the List of Creditors so Important?
It is important that you provide an accurate list of creditors including the correct address. If the creditors are not properly notified, they will be unaware that you have filed bankruptcy and continue calling and/or collection activity. Further, if you fail to list the creditor, the creditor does not receive official notice of the bankruptcy filing and the debt may not be discharged.
H. When will the case be concluded?
In the case of a Chapter 7, the case shall conclude approximately seventy (70) days after your attendance in court. If there are no objections from creditors, the debtor you will receive a discharge. (A discharge is official notice that the case has been successfully closed). In Chapter 13, the case closes when the debtor has completed all the necessary plan payments.
I. What objections are available to a Creditor in a Chapter 7?
11 USC §523 provides that certain debts are not dischargeable. The objection primarily used by creditors is the claim that the debtor knew or should have known the he/she was about to file bankruptcy and/or was unable to pay the debt and obtained credit knowing he/she did not intend to pay. This usually applies to loans, credit card purchases etc. obtained within six (6) months of filing bankruptcy.