A Motion to Dismiss During Your Personal Bankruptcy

If you receive a “Motion to Dismiss” from your bankruptcy trustee, there could be a couple of reasons for it.

• You fell behind on your personal bankruptcy payments because you lost your job, fell ill, or had an emergency. The trustee will be monitoring your payment plan, usually with the help of a computer, and will be able to tell if you have not made your payment for the last few months.

• Your tax claims, or any other type of claim, came in and was more than expected. These claims mean you owe more money than originally thought and your payment plan would have to be extended more than 60 months in order to compensate for the added debt. Since this is not allowed when filing personal bankruptcy under chapter 13, your case could easily be dismissed.

• You changed jobs, and a new payroll deduction has not yet been filed. This means the money that is supposed to be deducted from your paycheck and sent in to the trustee for payments on your personal bankruptcy has not been.

When you first receive a motion to dismiss from the trustee, you should contact your lawyer and see what the reason for the dismissal is. Your lawyer will most likely have a few ideas in mind to help you avoid a dismissal and keep your bankruptcy case open.

Filing Personal Bankruptcy: What to do with a Motion to Dismiss

The good news is, many trustees are not heartless. They are usually willing to work with you as long as you are willing to work with them. Typically, they will ask that you pay 25% to 50% of the debt you owe because of falling behind or due to claims and will allow the rest to be added to your payment plan.

If the trustee agrees to this solution, you will most likely have to agree to strict compliance of the new payment plan. This means you only get one chance. If you don’t pay again, the trustee will not be so lenient.

Should the trustee reject a down payment and additional monthly payment on the debt, your lawyer may have to request a hearing with the judge you saw when you were filing personal bankruptcy. The judge will then determine whether you will be able to make your payment on time and decide if your chapter 13 bankruptcy case should be dismissed or not.

If you receive a motion to dismiss after filing personal bankruptcy, make sure you contact your lawyer and work with the trustee. A little bit of communication may go a long way in helping to save your chapter 13 bankruptcy.

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Know and Follow the Laws When You File Personal Bankruptcy

Before you file personal bankruptcy, you need to understand a few things. First, you are no longer playing by your rules. The federal and state government determines what goes into your bankruptcy case and what does not. Second, the law states that all of your debts must be presented to the court when you file personal bankruptcy.

This means you don’t have the option of leaving out your mortgage, car payment, or any other debt. Your bankruptcy petition must include all creditors and any interested parties. Even the money you owe your brother must be included.

In some states, child support and alimony must be presented as a priority debt during Chapter 13 bankruptcy cases. This means, if you owe child support or alimony every month to your child or spouse, you must include their name on the bankruptcy petition. Those individuals must also be contacted when you include their name, so they will be aware you of when you file personal bankruptcy. This is required even if you are not behind on your child support or alimony payments.

If the debt is important and you wish to keep paying on it, like with a home or car, there is nothing in the bankruptcy law that keeps you from doing so after bankruptcy. Reaffirmations can be used to keep your property and continue paying for it. However, even if repayment is intended, you still must inform the court of the debt when you file personal bankruptcy.

What Happens if You Leave a Debt out when you File Personal Bankruptcy?

When you file personal bankruptcy, it is against the law to leave out any debts you owe. During the course of your bankruptcy, you will be asked to certify that all the debts you owe are present on your bankruptcy petition. The first time will be when you sign the petition, and the second will be under oath during the meeting of the creditors.

If you leave a debt out when you file personal bankruptcy, here is what might happen:

• If the debt was left off intentionally, you may find your bankruptcy case dismissed early. You may also be brought up on criminal fraud charges as a result of the missing debt.
• If you accidentally left the debt off the bankruptcy petition and realize it before the court does, you can pay a small fee and have your bankruptcy petition amended. If your bankruptcy is discharged under chapter 7 and no assets were granted to any creditors, then it will not matter if the debt was listed or not. It will still be discharged, along with the rest of your debt.

Before you file personal bankruptcy, make sure you understand the bankruptcy law and know all of your creditors. This will help you avoid delays and dismissals due to leaving debt off your petition. Bottom line? Be sure you are knowledgeable before you begin. Don’t make costly (or illegal) mistakes when you file personal bankruptcy.

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 Are You Ready to File Personal Bankruptcy?

When you file personal bankruptcy, the petition you fill out will have 50 or more pages. Each page will require certain information from you that will help the court determine whether you are eligible to file personal bankruptcy. Here is some of the information you will need.

• The income of both you and your spouse for the past three years
• Paperwork detailing the sales, losses, and recent payments you have made to your creditors
• Your budget
• A complete list of all your creditors, your account numbers, and the creditor’s addresses
• List of assets and the estimated value of those assets
• Pay stubs for the last six weeks
• Credit counseling certificate
• If you intend to file personal bankruptcy under chapter 13, you will need a plan

Understanding Two Page Filings when you File Personal Bankruptcy

For many individuals, it can take quite a while to gather all this information together. So what do you do if your house is about to be foreclosed on and you need immediate protection from the bankruptcy courts? According to the bankruptcy code, if the situation is an emergency, you may file and emergency petition. With this petition, you are only required to fill out the first two pages of the bankruptcy petition and send those pages in with your credit counseling certificate.

Of course, you will still have to fill out the rest of the bankruptcy petition, but you will be given about 15 days to find all of the necessary paperwork and file it accordingly. While this may sound like a great service, it should only be used with great care. Even organized individuals may find it difficult to gather all of the paperwork they need to file personal bankruptcy in just 15 days.

Also, some shady bankruptcy attorneys advise this emergency petition as a way to avoid having to fulfill their obligations to you. They will file the emergency bankruptcy petition, and then disappear, leaving you without help when you need it the most. It is important to avoid these types of attorneys. Before you file personal bankruptcy with an emergency petition, you need to consider the following:

• Will you be able to find all the paperwork you need within 15 days? If not, your bankruptcy case may be dismissed, leaving you in the same position as you were before.
• Does your attorney have your best interests in mind?
• Do you really need to file an emergency two page petition or can you wait 10 to 20 days for the bankruptcy protection?

When you file personal bankruptcy, make sure you understand the entire process. Don’t simply accept what you are told, make sure it is the best option for you.

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Filing Personal Bankruptcy – A Road Block for Your New Business?

When you decide that filing personal bankruptcy is the option you will take, make sure you utilize a licensed attorney. He or she will be able to help you understand the consequences of filing personal bankruptcy and will be able to help you determine which steps to take to begin your new business after your case has been discharged.

Here are some common roadblocks individuals face after filing personal bankruptcy.

• Inability to obtain a loan for up to a year after the bankruptcy is complete
• When you finally do obtain a loan, you will most likely deal with higher interest rates
• Inability to secure property due to bad credit

Steps to Starting your New Company After Filing Personal Bankruptcy

With the help of an attorney, you may be able to quickly establish a business of your own, even with your bad credit. Here are some steps that you and your attorney can take to make starting a business easier after bankruptcy.

• A bankruptcy can ruin your credit, and this can hurt your chances for starting a new business if the company is going to be in your name. As soon as you can, secure credit in the business’s name, not your own. Even though the business is new and it will take time to build its credit, it will be much easier to secure loans through the business than in your own name.

• If you are unable to secure a loan in your name or the business’s name after filing personal bankruptcy, consider using a cosigner. This could be a friend, family member, or even a business partner who has a better credit history than you do. With the help of these individuals, you will not only be able to obtain loans easier, but will most likely have lower interest rates on those loans.

• A cosigner is not always an option after filing personal bankruptcy. If you are in need of a business loan, consider going through the US Small Business Administration. This administration offers small business loans specifically for those who suffer from bad credit and credit ruined by filing personal bankruptcy. Your bank may be able to help you acquire one of these loans.

• Another option you may want to consider is starting your small business from home. This will generally reduce your start-up costs and may eliminate your need to acquire a business loan at all. This option is not for everyone; if you need a significant amount of money because suppliers require an upfront payment for the products or services you are wishing to sell, you may need to go another route.

Starting a business after filing personal bankruptcy is not easy, but it is far from impossible. With the right help, the correct steps, and a little bit of knowledge, you can quickly be on your way to owning your own company.

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Are you interested in filing personal bankruptcy to relieve you of your debt, but aren’t sure how it will after the lease on your apartment or condo? If you are thinking about filing personal bankruptcy under these circumstances, there are a few facts you should know.

Signing a New Lease – Before or After Filing Personal Bankruptcy?

So you have debt piling up so high it seems to be coming out of your ears. You want to begin filing personal bankruptcy, but you know you really need a new, cheaper place to live. The problem is, you are already under a lease. Surprisingly, before you begin worrying about getting out of your current lease, you should think about your new lease.

If you wait until after you are done filing personal bankruptcy, you could be in for a few rocky bumps as you look for a cheaper apartment or condo. After bankruptcy, your credit score will drop much lower than it is now, and many landlords may look negatively on your low score and recent bankruptcy. This could possibly keep you from signing a new lease and moving to a more affordable location.

To avoid these problems, you should find your new apartment or condo and sign the new lease before you begin filing personal bankruptcy. This will prevent you from being denied due to a low credit score caused by bankruptcy.

Getting Out of Your Lease After Filing Personal Bankruptcy

Once you have found a new condo or apartment you can afford, the next step you should take is filing personal bankruptcy. When you do this, you can easily get out from under your old lease. The reason for this is because of the bankruptcy law that allows you to assume or reject an executory contract.

Executory contracts refer to leases and contracts signed by individuals as a promise to pay for an object. This often includes houses, cars, apartments, and condos. Under the bankruptcy law, when you file bankruptcy, you may choose to:

• Assume the contract- This means you will be able to keep the object, as long as you continue to be faithful making your payments.

• Reject the contract- This means you will be released from your obligations and will no longer be required to stay in the apartment or pay for it. When you reject the lease on your apartment or condo, the landlord has the right to ask you to leave the apartment and also to collect a small percentage of the remaining rent left on the lease.

If you are unable to pay the percentage of rent left on your lease, you can include this debt in your bankruptcy case, along with all the rest of your unsecured debts, and be released from your obligation to pay the balance.

Before filing personal bankruptcy, make sure you are aware of the bankruptcy laws and understand how they can help you get out from under your old apartment or condo lease and help you move into a more affordable home.

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Before You File Personal Bankruptcy – Understand the Different Filing Types

Your unemployment benefits may affect your options when you are ready to file personal bankruptcy. Here’s the breakdown:

• Chapter 7- If you decide to file personal bankruptcy under chapter 7, you will be required to take the Mean’s Test. This test determines whether you qualify for chapter 7 and is based on your total household income, with the exception of social security income.  Unemployment earnings are considered before taxes are taken out. This means if you earn too much money, you may not be able to file personal bankruptcy.

• Chapter 13- If you don’t qualify for chapter 7 bankruptcy, you may be able to file under chapter 13. In order to do this though, you must have a steady source of income other than your unemployment. Many individuals who file for this type of bankruptcy are unable to qualify due to unemployment being their only source of income. Chapter 13 requires steady income, and unemployment benefits are not considered to be steady due to the fact they are only available to an individual for a short period of time.

Your ability to file personal bankruptcy will most likely be determined by income other than your unemployment benefits. If your only income is your unemployment, Chapter 7 may be the best type of bankruptcy for you.

What Happens to Your Unemployment Benefits when you File Personal Bankruptcy?

Like many other individuals, you may be wondering if you will lose your unemployment benefits when you file personal bankruptcy. The majority of the time, these benefits fall under the category of federal exemptions, meaning they can not be touched or altered when it comes to bankruptcy. For this reason, you can typically keep your benefits during and after bankruptcy.

Several other benefits are also exempt from being seized during bankruptcy, thanks to federal exemption laws. These are:

• Social Security Income- All of your social security will be exempt.
• Public Assistance- The amount a person needs to live on is exempt.
• Child Support and Alimony- The amount you need to live on will be exempt.
• Personal Injury Funds- The amount you need to maintain a particular standard of living will be exempt from bankruptcy.
• Retirement Benefits- As long as the funds remain in a retirement account, they will be completely exempt. If the funds are removed from the retirement account, the court will grant you exemption for the amount you need to live on after you file personal bankruptcy.

If you need to file personal bankruptcy while on unemployment, you don’t have to worry. Your unemployment benefits will be safe, and, as long as you don’t have any other source of income, you should easily be able to file under chapter 7.

For more tips and relevant information, continue to follow our website. If you are confused about your options, be sure to consult an attorney before you file personal bankruptcy.

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File Bankruptcy FAQ

 Q: What Does it Mean to File Bankruptcy Under Chapter 7?

A: Chapter 7 is a way to file bankruptcy in which all of an individual’s debts are discharged and his property is liquidated. With this type of bankruptcy, a person is declared unable to pay back his debts and is released from the responsibility. His non-exempt property is then liquidated in an effort to pay back some of his existing debts.

 Q: What Does it Mean to File Bankruptcy Under Chapter13?

A: Chapter 13 is a way to file bankruptcy in which a payment plan is established to take care of any debts an individual owes. This payment plan generally last for three to five years and is set up by the court. Individuals who wish to keep non-exempt property are best suited for this type of bankruptcy.

Q: Is a Lawyer Necessary if I File Bankruptcy?

A: If you are going to file bankruptcy, most court officials recommend you use a lawyer to help you navigate the legal documents involved with a bankruptcy case. This will help you avoid problems that could lead to a dismissal of your bankruptcy. If you wish to go pro se, though, you may do so.

Q: After I File Bankruptcy, will I still Have to Deal with Creditors?

A: By law, after you file bankruptcy your creditors must cease from their collection actions. They will not be able to contact you throughout the entire bankruptcy proceedings. If you have secured debt, like a home loan, and haven’t made payments, a creditor may request a lift of the stay from the court. If the judge approves of the lift, you will be required to pay on that debt or it may be seized by the creditor.

Q: If I File Bankruptcy, how will it affect my Spouse?

A: In most states, your spouse will not be affected by your bankruptcy at all, as long as he or she has not taken part in creating the debt. If your spouse signed an agreement with the creditor and shares the debt, he or she will owe the debt as well. Community property states are different however, and consider some debt to be shared by a couple, no matter who has signed for it. If your spouse owes on the debt you filing bankruptcy for, you may want to consider a joint bankruptcy to avoid having to deal with creditors after the bankruptcy is discharged.

Q: Can I Keep my Bankruptcy a Secret?

A: Because they are available to the public, bankruptcy records are hard to keep secret from those who wish to know whether you had to file bankruptcy. Future and current employers may wish to gain access to these files. By law, though, no employer can fire you or refuse to hire you because of a bankruptcy filing.

Q: When can I Expect my Credit Report to Look Good Again?

A: After you file bankruptcy, you can expect for your credit report to say bankruptcy for ten years. You will not be barred from attaining credit for the next decade though. You may be able to obtain credit just a couple of years after you file bankruptcy.

Q: If I File Bankruptcy, do I have to go Before a Judge?

A: Not necessarily. Generally, you will only have to step foot in court once during your bankruptcy, at the 341 hearing. In this hearing, you will be questioned, under oath, by your creditors to help determine whether you are able to pay back the debt you owe. It is important you answer each question you are asked truthfully and completely.

Q: What is the Cost of Filing Bankruptcy?

A: The majority of the time, filing bankruptcy costs about $300. If you choose to go online and file bankruptcy, though, it may cost much less. Lawyers can be expensive, costing one to two thousand dollars, but can be very helpful during bankruptcy cases.

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Can You File Chapter 7 for Student Loans?

If you want your loans to be completely discharged by the court, you must file bankruptcy under chapter 7 . Sometime during the course of your bankruptcy case, you will need to file a petition for undue hardship. This will open up what is called an adversary hearing, where your undue hardship petition will be evaluated and a determination will be made as to whether you are able to pay back your student loans or if you can file bankruptcy to erase them.

In Order to File Personal Bankruptcy for Student Loans You Must Prove Undue Hardship

An undue hardship typically refers to an inability to make payments on your student loans. Doing so would place stress on you financially and may cause you to go without basic essentials, such as food, water, and shelter. You must also prove that your current financial state is likely to persist for the next few years. Proving undue hardship is not easy to do. Even if you have secured employment, the court may find that you are able to secure another, better paying job.

Undue hardships are sometimes given to students who did not finish their degrees. They may also be accepted by the court if the student finished his or her degree, but has not used it for his or her current or previous employment.

If you are able to successfully prove undue hardship, the court will most likely grant you a full discharge of your school loans when you file bankruptcy. This means you will no longer be required to pay for the loans and creditors will not be allowed to hound you for money.

Can You File Bankruptcy Under Chapter 13 for Student Loans?

With chapter 13 bankruptcy, you may be able to restructure your student loans and pay them off in three to five years with easier payments. This can be very helpful if you don’t wish to discharge your loans completely, or you do not qualify for a chapter 7 discharge with undue hardships.

When you file bankruptcy under chapter 13, you will also be able to pay on the rest of the bills you have. This will give you time to catch up on your debts while under the protection of bankruptcy.

If you file bankruptcy, and you still owe on your loans after your bankruptcy has been completed and you have faithfully made your payments, you may be able to discharge the rest of your loans through chapter 7.

Should You File Bankruptcy for Your Student Loans?

Choosing to file bankruptcy can help you achieve a fresh start. If you have student loans, however, you may have a harder time obtaining that fresh start. Should you choose to file bankruptcy for your student loans, you must be prepared to prove an undue hardship or make payments on your student loan through a chapter 13 payment plan.

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How Many Classes Need to Be Completed When You File Personal Bankruptcy?

There are actually two separate requirements involved in filing personal bankruptcy. Here’s the scoop on both of requirements:

• Within a six month period before filing bankruptcy, you will need to receive government approved credit counseling. That is one requirement.
• After credit counseling, you will need to complete a debtor education course in order to have your debts discharged. That’s the second requirement.

Why Can’t Both Requirements for Filing Personal Bankruptcy Be Taken Care of at the Same Time?

That’s the rules. Pre-bankruptcy credit counseling may not be completed at the same time as your pre-debt discharge education. Credit counseling must always precede the debtor education. Before your debts are discharged, you must provide a copy of your certificate to the court.

Pre-Bankruptcy Counseling Facts

What happens during your pre-bankruptcy counseling session? They may vary slightly, but each one should include an evaluation of your personal financial situation, possible alternative solutions to bankruptcy, as well as help with developing a personal budget.

Don’t make the mistake of just breezing through this information. This is part of your financially successful future and every part of your financial counseling will be useful to you.

A typical counseling session will last between one and two hours and sessions can be face-to-face, or take place over the phone or even online. If you can’t afford to pay for credit counseling, it will be provided to you free of charge. You’ll need to request a fee waiver fist though. Don’t show up at your appointment expecting not to pay. Once your counseling is complete, a certificate will be issued as proof of your completion.

Post-Filing Debtor Education

Your required post-filing debtor education will further prepare you for a successful future after you file personal bankruptcy. A typical post-filing class will consist of more budget development tools, a section on managing your money more effectively, and tips on how to use credit responsibly.

This part of your counseling and education requirements can also take place in person, over the phone, or online. The typical post-filing debtor education course will last between two and three hours and cost up to $100. As with pre-filing counseling charges, if you can not pay the fee, simply file for a waiver. After you complete the post-filing debtor education you will receive certification that will discharge your debts.

In order to choose the right credit counselor, be sure to check the credentials of the organization offering the education. You can obtain a list of  approved classes at www.usdoj.gov or by checking with the bankruptcy clerk’s office in your filing district.

The proper steps in the proper order will make things go smoothly when you are ready to file personal bankruptcy.

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Bankruptcy Discharge Defined

A bankruptcy discharge is the act of releasing the debtor (which would be the person filing) from personal liability for specific debts that have been listed and qualified. When debts are discharged, the debtor or filer is no longer required to make any payments for the debt. The creditor, at that point, can no longer take any type of collection action to satisfy the debt. The creditor must cease all communication related to the specified debt and the matter is considered dead or satisfied.

With discharged debts, although the debtor is no longer personally responsible for the debt, any valid lien upon property in order to secure the debt, will remain active after the bankruptcy.

At What Point During Process of Filing Personal Bankruptcy Does the Discharge Occur?

Depending on the particular chapter of bankruptcy that is filed, the timing of the discharge process varies. When filing personal bankruptcy under chapter 7, the court will generally grant the discharge as soon as the deadline for filing an objection to the discharge has been reached. This generally occurs approximately four months after the filing date of the bankruptcy petition. If the debtor fails to complete the required financial management course, the discharge may be denied.

For chapter 11 cases, the court normally grants the bankruptcy discharge once the debtor has completed all payments under the bankruptcy plan. Since bankruptcy payments can stretch anywhere from three to five years, the discharge under this filing process generally occurs about four years from original filing date.

Can a Bankruptcy Discharge be Revoked?

There are certain instances in which a bankruptcy discharge can be revoked. These include, but are not limited to, the following examples:

• If the court determines that the debtor’s discharge in any filing was obtained fraudulently, for instance, if certain pertinent information is withheld regarding property ownership or possessions.
• Failure to explain any found errors in statements that are discovered during a bankruptcy audit.
• Failure to provide supporting or requested documents or requested information, especially as the result of a bankruptcy audit.

Generally, if a bankruptcy discharge is going to be revoked, it will take place during  the first year following the original discharge.

Bottom line here? If you are filing personal bankruptcy and have provided all necessary, required, and requested information and supporting documents, and have answered all questions and filled out all bankruptcy forms honestly, you should not fear having your bankruptcy discharge revoked or investigated.

Filing personal bankruptcy can be your first step in the right direction, freeing you from the burden of debt that has weighed you down. We hope this information regarding discharges when filing personal bankruptcy has been helpful to you.

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