Archive for the ‘Chapter 7 Bankruptcy’ Category

Bankruptcy Exemptions

When you file bankruptcy you will make a list of all of your assets, including any personal property you have.  The personal property will fall into one of two categories – exempt and non-exempt.  Exemptions vary by state but in general the following types of items are exempt.  Motor vehicles to a certain value (to be determined on a case-by-case basis), reasonable and necessary clothing (fur coats are not usually considered reasonable and necessary), household appliances, reasonable and necessary household furnishings and goods, and jewelry to a certain value (again to be determined on a case-by-case basis).

In addition to the above-listed items, pensions, life insurance policies, part of the equity in your home, tools of your profession, and public benefits (social security, unemployment, etc) may also be exempt.  The following items are generally considered non-exempt and will need to be relinquished during the bankruptcy proceedings:  stamp, coins, and other collections; family heirlooms; cash, stocks, bonds, and other investments; a second vehicle; a second or vacation home.

The important thing to remember with exemptions is that they will vary not only by state but on a case-by-case basis within the same state.  This is when having a very knowledgeable and experienced bankruptcy attorney comes into play.  The better your attorney is the better they will be able to apply the bankruptcy laws to your specific case.

Posted in Bankruptcy, Chapter 7 Bankruptcy |

Bankruptcy Checklist

In order to begin your bankruptcy petition you will need to have many types of information readily available and organized in one place. The following checklist will give you a good start as to what you will need when you sit down to fill out the paperwork either by yourself or with the help of a paralegal or bankruptcy attorney.

• Copies of your federal and state tax returns for the past two years
• Copies of your last two paycheck stubs
• Your Social Security number
• List of all the bills you owe, a recent statement from each creditor would be best
• History of residential addresses for the past six years
• Copies of the deed or mortgage papers for any real estate you own
• Appraisals of any property you have including non real-estate items like jewelry, furst, etc
• List of all your bank accounts including a recent statement from each
• Safe deposit box information if you have one
• All insurance policies including homeowners and life
• Information regarding all of your investments including stocks and bonds
• Copies of any leases or other promissory notes from the past three years

Posted in Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy |

Chapter 7 Bankruptcy

Let’s start off with discussing what a Chapter 7 bankruptcy is.  A chapter 7 bankruptcy is basically a liquidation proceeding.  The debtor will turn over all of their non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the various creditors listed in the bankruptcy paperwork.   Bankruptcy laws do vary by state so please be sure to check with a licensed bankruptcy attorney in the state in which you will file.

In order to file for a chapter 7 bankruptcy you must reside, have a place of business, or property in the United States plus you must not have been granted a Chapter 7 discharge within the past six years or have completed a chapter 13 repayment plan.  Additionally you must not have had a bankruptcy filing dismissed for cause within the past six months and you must pass a means test.

So now that you understand what a chapter 7 bankruptcy is and what qualifications you must have to file, let’s look a bit more about why people would need to file for chapter 7 bankruptcy.  There are many reasons, and they vary by person, but the most common reasons are unemployment, very large medical expenses, marital problems, and any other type of unexpected but large expense. 

The bankruptcy laws changed in 2005 and now all petitioners are required to attend debt counseling courses within six months prior to filing for protection under the chapter 7 bankruptcy laws.   To find a listing of government-approved credit counseling organizations please visit the US Trustee Program at the US Department of Justice.  In addition prior to completion of the chapter 7 bankruptcy proceedings, you will also be required to complete a financial education course.  The list of approved providers of personal financial management instructional courses can be found on the US Trustee website as well.

Once you file your petition for protection under the chapter 7 bankruptcy laws many creditor actions must cease and desist.  This includes collection calls, foreclosure procedures, and other efforts to collect a debt.  At this point having a very knowledgeable lawyer comes into play as it is time to determine what happens to your assets.  There are some exemptions; we’ll cover those in our Bankruptcy Exemptions topic.

Posted in Chapter 7 Bankruptcy |