Bankruptcy Law - General Info
Bankruptcy
law is, in essence, the set of laws put forth in Title 11 of the United States
Code of Laws.
To file bankruptcy you must first start by filing some paperwork or forms
called a 'Bankruptcy Petition & Schedules' with the bankruptcy court in the
proper district (this is usually within the state where you reside.) In the
paperwork that you file you are simply disclosing to the court all of your
debts and everyone you owe (your creditors.) You will also give the bankruptcy
court information about your monthly income and expenses.
There are some more questions that you will have to answer which will give
anyone reading the paperwork a clear picture of your financial status.
Everything you say must be thorough and is said under penalty of perjury, to ensure
that you are telling the truth. You will also be forced to attach specific
documents to the paperwork and provide other necessary information to the court
to help prove the statements made in the paperwork. In many cases the paperwork
will be filed electronically online by your lawyer.
Once you file bankruptcy an automatic stay shall take effect. This is an
automatic court order that all of your creditors must cease all collection
actions. This means creditors are not legally allowed to write you, call you,
repossess anything, file or continue to pursue any already filed lawsuits or do
or use any other collection actions against you. If they do, you may be
entitled to compensation.
The
automatic stay will protect you and most creditors cannot penetrate it after
you file bankruptcy unless (a) they get the bankruptcy court’s permission or
(b) the bankruptcy law specifically says that the automatic stay does not apply
to them. This means that your creditors cannot contact you, sue you, repossess
your car, foreclose on your house, file a lien, etc against you.
Generally in about 30 days after you file your paperwork there will be a
bankruptcy hearing which you and your lawyer are required to attend. The
location depends on where you live. In our area of North
Carolina, you go to court in Wilson,
Kinston, New Bern
or Elizabeth City. This hearing is called the Meeting
of Creditors. The creditors are asked to attend but often don’t, although
sometime business creditors, ex-spouses, or others may choose to attend.
The hearings are recorded on tape and the debtor testifies about his assets and
liabilities and answers any other questions he is asked by the court. Usually,
the hearings are very brief and are non-confrontational. You may also hear
these meetings be referred to as a 341 meeting. Your lawyer will be in
attendance, or another qualified lawyer of Mr. Hardy’s choosing shall be there
with you.
The hearing date and time is scheduled by the court based on when your
paperwork was filed. The date and time are not negotiable, but may be extended
or continued if you have some sort of medical emergency. Although it is
extremely rare there is also the possibility of doing it in writing, but this
should not be expected as the status quo.
Extra attorney fees may be required to conduct this meeting by written
interrogatories.
You will need to make sure that you have your social security card and driver’s
license with you at your hearing or your hearing will be continued to another
date. Also, expect to be asked to bring along other important documents like
paycheck stubs, bank statements, or tax returns. You will be forced to enter
the building through a metal detector and security is conducted by U.S. Marshalls.
Be sure not to bring anything with you that would be deemed problematic, such
as guns, knives and any contraband. Also, make sure you leave your cell phone outside
in your vehicle or at home. Remove your hat before you enter out of respect.
Always be polite and say “YES, SIR/MA'AM” AND “NO, SIR/MA'AM”, when you are
asked a question. Do not say “uh-hunh” and “uh-uh”. The recording device has
difficulty showing the intent of such grunts. (Don’t worry if we remind you at
the hearing- I have been guilty of doing it, too!!!!!) Remember, everything is
recorded, so you must make a verbal response and not just a nod, shake or a
shrug. Try to arrive to the courthouse early, but definitely DO NOT TO BE
LATE!!! If you are late or forget your ID and Social Security card, then you
will have to come back another day missing another day of work. Also, it will
be on the record and reflect badly on you in the future if I must go before the
judge to help you.
There are many different types of bankruptcies which are distinguished by their
chapter numbers such as: chapter 7, 9, 11, 12, and 13 bankruptcy. Most
individuals file chapter 7 or 13 bankruptcy. For more information relating to a
specific chapter check out the chapters section of the website, but below is a
quick explanation of each.
Chapter 7 bankruptcy is a liquidation, where your goal is to discharge, or
remove, all of your unsecured debts. An unsecured debt is the type of debt
where the creditor does not have a lien on any of your assets. Some examples of
typical unsecured debts are: credit cards, medical bills, and standard bank
loans. When the debt is discharged that creditor can never attempt to collect
that debt from you again. You are allowed to keep all “exempt” property. Exempt
property is property the attorney can protect from being seized or sold. You
are also allowed to keep and maintain certain debts, such as house payments,
car payments, etc. (Please see our “Protecting your Assets” section). You may
also choose to surrender homes or cars and no longer be responsible for the
debt on it. The vast majority of Mr. Hardy’s clients do not lose any property
and keep everything
