If You Can’t Attend The Meeting Of Creditors
If you don’t attend your meeting of creditors at its scheduled time, the court will dismiss your bankruptcy case. If you can’t make your meeting of creditors, notify the trustee immediately. Whether your hearing will be rescheduled will likely depend on your reason for missing it. For instance, while work and travel commitments usually aren’t compelling, a trustee will probably continue a case for one of the following reasons:
- medical or family emergency
What Are The Alternatives To Chapter 7 Bankruptcy
Summary: What You Need To Know About Chapter 7 Bankruptcy Texas Exemptions
The take-home message is that most people who file bankruptcy are worried they will lose something. I hear questions like this all the time.
Will I lose my house in Chapter 7 bankruptcy?
Will I lose my car in Chapter 7 Bankruptcy?
Can I protect my retirement account in Chapter 7 Bankruptcy?
In Texas, you probably wont lose any of your assets as long as you hire an experienced bankruptcy attorney and you are honest with them.
Remember, if you are filing for Chapter 7 bankruptcy it is important that you list all of your assets. There are exemptions available and you may eligible for a no-asset bankruptcy but if you fail to disclose your assets, you risk losing them.
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Exemptions For Funds In Checking Accounts
If a state offers an exemption for cash, it will probably cover only a few hundred dollars.
Usually, there is no specific exemption to cover money in a checking account or other types of cash. A few states do provide a small cash exemption for a few hundred dollars. This does not mean that you cannot protect the money in the account, however, since it may fall within a different type of exemption. For example, a wildcard exemption may allow you to protect any type of personal property up to a certain amount in value.
Sometimes the source of the money in the checking account may allow you to claim an exemption. If it comes from government benefits, such as Social Security benefits, or if it comes from a pension or retirement fund, child or spousal support, or a personal injury lawsuit, you may be able to claim a specific exemption for that type of cash. Many states also allow a debtor to claim an exemption for wages, although this may be limited to a certain amount. If the funds in the account were held in a tenancy by the entirety, this also may fall within an exemption in some states.
Chapter 7 Bankruptcy Forms
You’ll use the documents you’ve assembled to complete a 50- to 60-page bankruptcy packet you’ll file with your local bankruptcy court. Your packet will include a completed credit counseling course certificate. You’ll also pay a filing fee or submit a fee waiver or installment payment request.
You’ll find free fillable, downloadable bankruptcy forms on the U.S. Courts bankruptcy forms webpage. Here are the bankruptcy forms you’ll need when filing for Chapter 7 bankruptcy:
- B 101 Voluntary Petition for Individuals Filing for Bankruptcy
- B 105 Involuntary Petition Against an Individual
- B 106 Decl Declaration About an Individual Debtor’s Schedules
- B 106 Sum A Summary of Your Assets and Liabilities and Certain Statistical Information
- B 106A/B Schedule A/B: Property
- B 106C Schedule C: The Property You Claim as Exempt
- B 106D Schedule D: Creditors Who Hold Claims Secured By Property
- B 106E/F Schedule E/F: Creditors Who Have Unsecured Claims
- B 106G Schedule G: Executory Contracts and Unexpired Leases
- B 106H Schedule H: Your Codebtors
- B 106I Schedule I: Your Income
- B 106J Schedule J: Your Expenses
- B 107 Your Statement of Financial Affairs for Individuals Filing for Bankruptcy
- B 121 Your Statement About Your Social Security Numbers
- B 108 Statement of Intention for Individuals Filing Under Chapter 7
- B 122A-1 Chapter 7 Statement of Your Current Monthly Income
- B 122A-1Supp Statement of Exemption from Presumption of Abuse Under §707
- B 122A-2 Chapter 7 Means Test Calculation
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Your Bank Might Freeze Your Account After Chapter 7 Bankruptcy
Many banks and credit unions freeze the bank accounts of individuals filing for bankruptcy even when the debtor doesn’t owe the bank money. The banks’ position is that all of the debtor’s assets come under the control of the bankruptcy trustee immediately after filing for Chapter 7 until the debtor receives a debt discharge, and that freezing the accounts protects the funds for the trustee.
Of course, it’s a hardship for debtors who are frozen out of the account without warning. But the solution is often simple. The debtor or the debtor’s attorney can contact the Chapter 7 trustee. If the funds are exempt, the trustee will usually instruct the bank to give the debtor access to the account, although it might take a few days. Otherwise, the debtor must file a motion with the court to have the funds released.
How to avoid this problem. As discussed above, you’ll want to consider paying your bills before filing for bankruptcy. Ensure a minimal balance by withdrawing the funds and using cash for your debts. Just be sure to use the funds before you file and keep good receipts.
How Chapter 7 Bankruptcy Works
Exemptions apply to certain types of property. The federal government offers a list of exemptions, and many states have their own lists. Debtors are required to use their state’s list in some of these jurisdictions. Other states allow them to choose between their own list and the federal list, in which case debtors can elect the set of exemptions that’s more beneficial to them.
Common exemptions include:
- Certain retirement accounts
- Property that’s necessary for earning a living
Retirement plan exemptions are available to everyone, even if they must accept their state’s list, and their state doesn’t provide an exemption for those accounts.
Many Chapter 7 cases are considered to be “no asset” cases. There’s little or nothing left for the trustee to sell or liquidate after exemptions are applied.
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Don’t File For Bankruptcy If You’ll Receive Future Payments
Funds you don’t have yet but expect to get in the future are part of your bankruptcy estate. If you are filing for Chapter 7 bankruptcy, the Chapter 7 trustee can take this money and use it to repay your unsecured creditors.
Examples include agreeing to accept a future bonus at work, getting an inheritance you’ll receive in the future, or filing tax returns that entitle you to a refund. If you anticipate receiving any payments or money in the future, talk to a bankruptcy attorney.
Chapter 7 Bankruptcy Discharge
The successful conclusion of a Chapter 7 bankruptcy involves a discharge, what the Administrative Office of the U.S. Courts describes as a release individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor.
Remember, however, the limits of the sorts of debts that can be discharged in a Chapter 7 bankruptcy. Filers who have retained an attorney to see them through the process will have an opportunity to review what, if any, obligations remain after a successful discharge.
As noted earlier, all but a tiny percentage of attorney-supported Chapter 7 filings are discharged. However, the court takes an aggressively dim view of Chapter 7 applicants who are found to be pulling a fast one.
Chapter 7 filings can be rejected for a variety of reasons, among them: debts for money/property acquired by false pretenses debts for fraud debts for malicious injury when contested by the injured creditor or debtor, without satisfactory explanation, makes a material misstatement or fails to provide documents/information related to an audit of the debtors case.
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But What About The Bill Collectors
One of the major attractions of bankruptcy is that it stops most collection attempts. Creditors and collectors of most types of debt have to immediately stop contacting a debtor by phone, mail, in person or any other method once a petition is filed. They also have to stop garnishing wages, and cant file lawsuits seeking payment.
But creditors can request that this stay on collections be lifted, and sometimes it is. Also, only creditors named by the debtor in the bankruptcy filing will be warned to stop their contacts.
What Happens At The Creditors Meeting
The get-together with creditors, known as a section 341 meeting, sounds ominous. However, rather than being placed under oath and grilled for hours by vengeful creditors, you will probably encounter just a brief discussion with the trustee and no creditors present.
Thats what usually happens. Few questions are asked, and those only by the trustee.
Although Chapter 7 is about getting out from under debts, filers sometimes dont want to discharge some debts. A filer may want to pay off a car rather than have a lender repossess it. In these situations, the filer can reaffirm the debt, agreeing to pay it off even though it could be discharged.
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Documents Needed To File Chapter 7 Bankruptcy
Here are the primary documents needed to complete Chapter 7 bankruptcy forms and get a Chapter 7 case started:
- six months of paycheck stubs
- six months of bank statements
- tax returns
- current investment and retirement statements
- current mortgage and car loan statements
- home and car valuations
- property list with values
- repair estimates for damaged property
- , collection, and other billing statements
- a current credit report
- your Driver’s license and Social Security card
Bring copies to the initial consultation if you plan to hire a bankruptcy attorney. Not only will it help the lawyer assess your case but getting documents from clients can be challenging, and showing up prepared will make you a more desirable client.
Don’t Forget To Complete Bankruptcy Education Requirements
Before receiving a bankruptcy discharge, you must complete credit counseling and debtor education requirements.
- You’ll need to take a credit counseling course from an approved agency and submit your completion certificate when filing your bankruptcy case. Otherwise, the court will dismiss your case.
- Debtor education. After filing your case, you must complete a personal financial management course or “debtor education course.” The bankruptcy court won’t issue your discharge if you don’t satisfy the debtor education requirement.
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How Much Cash Is Exempt In Chapter 7
If you are concerned about any of your assets, you need to speak to an experienced bankruptcy attorney in your area. But what happens if you have a non-exempt asset?
Many people have questions and concerns about how much cash they can have in the bank when filing for bankruptcy.
If you declare bankruptcy, will you lose literally every dollar that you have in your savings? The answer is no: some cash can be exempted in a Chapter 7 case.
For example, typically under Federal exemptions, you can have approximately $20,000.00 cash on hand or in the bank on the day you file bankruptcy.
The vast majority of my clients have considerable less than $20,000.00 in the bank the day I file their bankruptcy. However, for the sake of my example, lets say, you had $23,000.00 in the bank the day I filed your bankruptcy. The Chapter 7 Trustee could technically take the amount over the exemption amount and pay that amount to your creditors.
So, you would keep $20,000.00 and the trustee would take $3,000.00 and give that to your creditors.
You would not owe your discharged creditors any more money and you still have a successful bankruptcy. While this example may seem extreme, I have worked on a bankruptcy where the individuals had more than $20,000.00 in the bank the day we filed their bankruptcy.
Does The Trustee Check Your Bank Account
The trustee will probably request copies of your bank account statements shortly after you file your case and before you appear for the meeting of creditors . The trustee can audit your bank accounts at any time, by requesting your books and records, other documentation, or taking your testimony, to explain the origin of deposits and the reason for withdrawals.
If questions remain, the trustee can also ask for a formal audit of your books, records, and assets. However, it is rare for a trustee to keep such close tabs on bank account activity unless something is amiss elsewherefor instance, if the figures in your account dont jibe with the figures on your schedules.
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Timing And Location Of The Meeting Of Creditors
The court will set the meeting of creditors between 21 and 40 days after your bankruptcy filing date. It will take place in a meeting room at a federal building or at an offsite location. Other bankruptcy filers will appear at the same meeting time, so you’ll want to check the docket to see where your case falls on the schedule.
Bankruptcy And Bank Statements: Updatetheres Now A Charge
Filed a bankruptcy case for some folks last week who had SIXTEEN bank accounts. Half of them they hadnt used in years, but kept open because it was too much trouble to close them. Now they are trying to get account statements showing the date the bankruptcy was filed, and the bank is not cooperating.
Duhif youve left a three dollar balance on a bank account for four years, the bank is NOT going to consider you a good customer. And if you thought it was too much trouble to close those accounts before you file bankruptcy, see how much trouble it is to get that bank statement balance now that you have filed bankruptcy.
You need to do yourselfand the bankand the bankruptcy court a favor and close accounts you are not actively using.
So, Im starting to charge. Im charging for the extra paperwork we have when people have multiple, unnecessary bank accounts.
For a single person, your first THREE bank accounts are free. If you have more than THREE! accounts on the day you file bankruptcy, theres a $50.00 charge.
For a married couple the first five are FREE. After five, theres a fifty dollar charge.
Each bank account you have means a lot of workfor you, for me, for the bankruptcy trustee. And the more you have, the harder it isfor you, me. and the bankruptcy trusteeto make sure they are all covered. So, close em.
So, close those accounts youre not using.
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Get Help From A Trusted Bankruptcy Attorney
Acclaim Legal Services was established to do one thing: help our clients find lasting debt resolution and restored credit.
We are here to answer your questions and provide qualified legal advice. Dont delay getting your credit and life back on track call us today at 866-261-8282 or schedule a free consultation.
What Not To Do Before Filing Bankruptcy
Because the Trustee will investigate all of your financial activity in the months just prior to the date of filing, you must avoid the following during the look back period:
The bottom line is that your bankruptcy filing should accurately disclose your expenses, income, assets, and debts in the months leading up to filing as well as on the day of filing. And absolutely under no circumstances try to hide a bank account. If you are asking yourself, can the Trustee find my bank account, the answer is yes it is actually a very simple matter.
For even more about what to know as you are preparing to file bankruptcy, see this article on what not to do before filing bankruptcy.
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What Records Will The Bankruptcy Trustee Require
The bankruptcy system is built on trust. It really isnt designed that way, at least not intentionally, but this trust system has developed from necessity. The volume of bankruptcy cases necessitates that bankruptcy trustees accept most debtor statements without verification, and rely on the examination of a few records for the rest. Many of these records are mandated by the Bankruptcy Code or Federal Rules of Bankruptcy Procedure. Other records are required by the local rules of the bankruptcy court. Finally, the bankruptcy trustee may request other debtor records.
All debtors are required to submit a copy of the last filed tax return and pay advices for the past 60 days to the bankruptcy trustee. In addition, most trustees will request some or all of the following documents, but all of these documents should be delivered to the debtors attorney for analysis prior to the case filing: