Category: Chapter 13

What is the §341 Meeting of Creditors?

Posted on by Sean Wood in 341 Meeting of Creditors, Bankruptcy, Chapter 11, Chapter 13, Chapter 7

Most people only have to attend one meeting when they file a bankruptcy which is called the Meeting of Creditors. This meeting is outlined in 11 U.S.C. §341 so bankruptcy attorneys often call it the “341 meeting” or simply a “341”. Normal non-attorney folks just call it the “Meeting of Creditors”.

22 Meeting

When does the Meeting of Creditors take place?
This meeting will be set by the Court and it usually occurs between 4 to 6 weeks after the date of filing. The Court will mail you a notice with the date, time, and place but your attorney will probably tell you as well.

Where does the Meeting of Creditors take place?
There are four locations in Utah where these meetings take place. Usually your meeting will be assigned to the location nearest the home address you listed on your bankruptcy petition. The addresses to all four locations are listed below.

Federal Building
324 25th St.
Room 6026
Ogden, UT 84401

Ken Garff Building
405 S. Main Street
Suite 250A or 250B
Salt Lake City, UT 84111

Provo City Library at Academy Square
550 N University Ave
Room 308
Provo, UT 84601

Washington County Boulevard Office Building
87 N. 200 E.
3rd Floor
St. George, UT 84770

What do I need to bring to the Meeting of Creditors?
I covered this in another post but there are four things you need to bring:

1. Driver’s License
2. Social Security Card (or other proof in the form of a document not prepared by you with your full social security number listed on the document, like a W-2)
3. Most recent pay stub (the last pay stub you received before the Meeting of Creditors)
4. Bank statements covering the month of your filing date

What happens at the Meeting of Creditors?
You should arrive at least 15 minutes before your scheduled time so that your attorney can meet you there and discuss your case if he needs to. You will then go into the room with your attorney where the meeting will be conducted. Although your case will be assigned to be heard during a 1-hour block with a number of other people, usually your case will last only 10 minutes.

The trustee will go through his list and call the names of the cases for that time. When your name is called your attorney will go with you and will sit right next you in the seats upfront. The trustee will then ask you questions about your case and the petition we filed. Answer the questions truthfully and accurately. If you don’t know the answer then you can defer to your attorney. Below is a list of some of the more common questions the trustees ask:

· whether you have read through, understand, and signed your petition
· whether the information listed on your petition is true, complete, and accurate to the best of your knowledge
· whether you read the bankruptcy information sheet
· whether you have listed all your property in your schedules and whether you have listed accurate values
· whether you have transferred any property in the last two years
· whether you have repaid any of your creditors within the three months prior to your bankruptcy
· whether you have repaid any relatives or close friends in the last year
· whether you have sold or given away any property or transferred any money in the past several years
· how you determined the value of your property listed in your paperwork
· whether your income is accurate in your schedules and on your “Means Test”

After the trustee asks you questions about your petition, he will then ask “are there any creditors with questions?”. At this point any of your creditors may come forward to ask you questions. Most of the time there are no creditors with questions. If you owe the State of Utah money then the Utah State Tax Commission will be sure to show up. If you have purchased something from RC Willey you can bet that they will be there. But for most creditors it’s not worth paying someone to appear at the meeting because they are not likely to recover anything.

Once the trustee and the creditors have finished asking questions then you are free to go. Sometimes the trustee will ask for some additional documentation and if he does then get that to your attorney ASAP so he can get it to the trustee.

Should I be a nervous Nellie about the Meeting of Creditors?
No, you should not be a nervous Nellie about the Meeting of Creditors. There is no reason to be nervous. The Meeting of Creditors is not held in a Court nor is it before a judge. You will be placed under oath and are required to answer truthfully. The reality is this—if you have been honest with your bankruptcy attorney and all your financial information is provided in your petition then you really have nothing to hide.

So, just tell the truth and you will be fine. Trust me, I’ve been to a gazillion of these and it’s really not as bad as most people picture it in their minds.

How should I dress for the Meeting of Creditors?
It actually surprises me how few people ask me the question. However, it doesn’t really matter how you dress in my opinion and I don’t think the trustees care either. I’ve seen a variety of attires ranging from the dingiest jeans to expensive and fancy suits. Again, I honestly don’t think it matters how you dress.

What happens if I don’t attend my Meeting of Creditors?
If you don’t attend your Meeting of Creditors then you have made a huge mistake. If you don’t go to your 341 Meeting your case will be dismissed. You will not receive a discharge of your debts and the automatic stay will no longer be in effect. If your case is dismissed you can still file again but you will have to pay the filing fee again and the automatic stay is limited for repeat filings. The point is this: DO NOT MISS YOUR MEETING OF CREDITORS! If for some reason you have a scheduling conflict that you cannot resolve, contact your attorney as soon as possible so that he can try to reschedule the date.

If you have more questions about the Meeting of Creditor be sure to ask your attorney. Bankruptcy attorneys sometimes gloss over the details of the Meeting of Creditors simply because there are so many things they could tell you but they don’t have the time and you don’t really need to know everything they could tell you. But if you have more questions, ask your attorney and he should be able to give you an answer.

What are my options for paying my bankruptcy filing fee?

Posted on by Sean Wood in Bankruptcy, Chapter 13, Chapter 7, Court Filing Fee, Fee Waiver, Fees, Filing for Bankruptcy

Short answer: (1) pay in full, (2) pay in installments, or (3) apply for a fee waiver.

1. Pay in full21 Cash Register

This is the easy option for both me and for the client. When you make a payment to my firm for the attorney’s fees you also make payment for the filing fee. Paying in full makes it easier for me because I don’t have to worry about reminding the client to pay the filing fee. It’s also easier for the client because there is nothing else you have to do.

2. Pay in installments

Coming up with the money for attorney’s fees can be difficult when you are considering bankruptcy. Fortunately, the Court allows you to pay the filing fee in three installments. You don’t even have to pay the first installment when you file.

What the Court does require is that you make your first payment two weeks within two weeks of filing, the second payment within two weeks after the first payment, and the third payment within four weeks of the second payment.

Let me use an example. Let’s say you filed chapter 7 bankruptcy on Monday, February 1, 2016. The total amount for the filing fee is $335.00. Your first payment is due on or before February 15, 2016. Your second payment would be two weeks after that, on Monday, February 29, 2016, Leap Day (watch out for Leap Day William). Your third and final payment would be due four weeks later on Monday, March 28, 2016.

Below is a table showing how this works.

Payment Date Amount
File Bankruptcy February 1, 2016 $0.00
1st Payment February 15, 2016 $110.00
2nd Payment February 29, 2016 $110.00
3rd Payment March 28, 2016 $115.00

3. Apply for fee waiver

The last way to pay for your filing fee is to not pay at all. If you meet the guidelines then you file what is called the “Application to Have the Chapter 7 Filing Fee Waived”. This is only available to chapter 7 debtors; it is not available to chapter 13 debtors.

There are several factors the Court considers when deciding to grant or deny your application for fee waiver. The most important factor, however, is your income. If your monthly income is 150% or less of the poverty level for the number of people in your household then the Court will likely grant your application for fee waiver. I covered this in more detail in an earlier post.

Talk to your attorney about which payment method is best for you.

How do I get a free credit report?

Posted on by Sean Wood in Bankruptcy, Bankruptcy Attorney, Chapter 13, Chapter 7, Credit Report, Payday Loans

How do I get a free credit report?

Short answer: go to www.annualcreditreport.com and request a free credit report.

19 creditOne of the most important things you need to do when preparing for a bankruptcy is to identify all your creditors. You are required to list all of your debts and creditors on the bankruptcy petition. I’ve had a number of clients ask me ‘how do I identify all of my creditors?’

The best place to start is with a credit report. Credit reports are not perfect and they don’t list all of your debts but for most people the credit report will include most of your debts. There, however, are some items that are usually not reported on your credit report. Pay day loan companies, for example, generally do not go to the effort to report these loans to the credit bureaus. Small businesses also rarely report debts. That is why I recommend to my clients that they keep a stack of all the bills and legal documents they have received.

Is it your bankruptcy attorney’s job to identify all your debts? People ask me this all the time and the answer is ‘no’. Not only is not his job, it’s also impossible for your attorney to identify all your debts. Your bankruptcy attorney can pull a credit report for you but, as I mentioned before, not all debts will be listed on your credit report. The person who knows your debts best, is you.

I always pull a credit report for my clients for a couple of reasons. First, I want to be sure I can identify as many debts as possible. Second, people often don’t keep track of lawsuits or judgments filed against them. Third, and most importantly, I can import all the data from the credit report into the software I use to create the bankruptcy petition which saves me huge amounts of time. As a side note, years ago, when I was a mere legal clerk, I used to manually enter in the data from credit reports into the computer. It was horrible. My eyes and my fingers hated me for it.

Although I pull credit reports for my clients, I encourage them to get and print out a copy of their credit report for our initial consultation. It helps both me and my clients figure out what debts they have.

Once a year you can order your free credit report from www.annualcreditreport.com. It’s a good idea, whether you are considering bankruptcy or not, to review your credit report to make sure there are no errors.

Can I keep the items I bought from RC Willey when I file for bankruptcy?

Posted on by Sean Wood in Bankruptcy, Bankruptcy Attorney, Chapter 13, Chapter 7, Creditors' Rights, Reaffirmation Agreements

Can I keep the items I bought from RC Willey when I file for bankruptcy?

Short answer: yes, if you want keep the item but you have the option to surrender the item.

18 RC Willey

About 4 to 6 weeks after you file any chapter of bankruptcy, you are required to attend what is called the “Meeting of Creditors”. At the Meeting of Creditors, the trustee will ask you questions about your bankruptcy petition. The bankruptcy trustee is an attorney appointed to represent the creditors in your case.

After the trustee has asked you some questions about your petition, he will ask “are there creditors with questions?” at which point any creditor can ask you questions. I would say a good three-quarters of my cases have no creditors that appear. When a creditor does show up it is generally the IRS, the Utah State Tax Commission, or RC Willey.

“Why does RC Willey show up to the Meeting of Creditors when no other creditors show up?” RC Willey tends to be a little more aggressive, for better or for worse, than other creditors. When you purchased a piece of furniture or any item from RC Willey on credit, RC Willey will retain a secured interest in that item, similar to the secured interest a lender has in your car or your house.

If for some reason you default on your loan, RC Willey has a right to take back the item that was sold to you, and they like to enforce this right. The reality is, however, they don’t want to take the item back from you. They want you to pay for the item. It is unlikely that RC Willey will recover more from acquiring the item and selling it at a discount than they will if you keep the item and pay them.

So what options do you have when you have purchased something from RC Willey? There are usually three options.

Option 1: Surrender the item

If you don’t care to pay for the item or it is a crappy item, you can tell RC Willey that you would like to “surrender” the item. Surrendering the item means you let RC Willey come take the item from you and whatever deficiency is left will be discharged in the bankruptcy.

Option 2: Reaffirm the debt for the full amount you owe

This is RC Willey’s preferred option. I always tell my clients, creditors care about one thing––collecting money. You do have the option to reaffirm the debt. When you file a bankruptcy, your contract with RC Willey is terminated. Reaffirming the debt means that you will voluntarily take on that debt again. If you reaffirm for the full amount, RC Willey will lend you credit in the future.

Option 3: Reaffirm the debt for fair market value

This option is usually the option I recommend to my clients. People generally like the items they purchased from RC Willey and would like to keep them. You do have the option of reaffirming the debt for the market value of the item. This amount is generally about half the amount you owe on the item, although it varies depending on the item.

The downside of reaffirming for fair market value is that RC Willey will NOT lend you credit in the future. For most people, this is not the end of the world. While I personally like RC Willey and I have purchased from them multiple times in the past, there are plenty of other furniture stores that WILL lend you credit.

What if I want to keep some of the items I purchased from RC Willey but not all of the items?

You can pick and choose which items you would like to reaffirm. Let’s say you really like a dining room table you purchased from RC Willey but you don’t like the sofa you purchased. You can reaffirm and keep the dining room table and surrender the couch.

What if I do not have the item?

Occasionally I will have a client tell me that they no longer have the item they purchased from RC Willey. I have heard all kinds of stories of what happened to items purchased from RC Willey from family members taking the items to foreign countries to ex-boyfriends and ex-girlfriends who have disappeared with the items. What happens then?

RC Willey has two choices––give up or file a suit for fraud against you. I say they have two choices but in every case I have dealt with RC Willey they just give up. Suits for fraud are rarely filed and usually involve tens of thousands if not hundreds of thousands of dollars of debt. Any claim RC Willey files against you is not a secured claim but rather an unsecured claim. After all, they cannot expect you to surrender an item you do not have.

Bankruptcy Filing Fees Increasing June 1, 2014

Posted on by Sean Wood in Bankruptcy, Chapter 13, Chapter 7, Filing for Bankruptcy

I received an email update from Kevin R. Anderson, the chapter 13 trustee, which states that certain filing fees will be going up on June 1, 2014. The important parts state the following:

[T]he “administrative fee” charged at the filing of every Chapter 7 or Chapter 13 case increases to $75 (from $46); a new fee of $75 will be charged to divide a joint case under Chapter 7 or Chapter 13; the filing fee for an adversary proceeding increases to $350 (from $293).

Currently the total filing fee for a chapter 7 is $306 and the total filing fee for a chapter 13 is $281. It appears that administrative fee, which is part of the total fee, is increasing by $29. This means that the filing fee for a chapter 7 will increase from $306 to $335 and the filing fee for a chapter 13 will increase from $281 to $310.

What property is exempt under Utah Bankruptcy laws?

Posted on by Sean Wood in Bankruptcy, Bankruptcy Exemptions, Chapter 13, Chapter 7

One of the most important concepts to grasp when you are considering filing for bankruptcy is understanding how the bankruptcy exemptions work. When you file for bankruptcy you do not lose all your property. Under bankruptcy law there are exemptions that prevent creditors and the trustee from taking certain property from you.

Below is a basic list of property and the value that is exempt for each item of property under the Utah Code.

Real Property
Home: $30,000 equity single filing
Home (filing jointly): $60,000 equity
2nd Property: $5,000 equity
2nd Property (filing jointly): $10,000 equity

Vehicles
Car: $3,000 equity
Cars (filing jointly): $3,000 for first car, $3,000 for second car

Retirement
Retirement Funds are generally unlimited if the contract or policy has been owned by the debtor for a continuous unexpired period of one year. These include:
(a) Life Insurance policies
(b) IRA’s
(c) 401(k)’s
(d) Pensions

Basic Necessities
(a) Provisions sufficient for 12 months actually provided for individual or family use (includes food)
(b) All wearing apparel of every individual and dependent (not including jewelry or furs)
(c) Beds and bedding for every individual or dependent

Household Items (one of each of these)
(a) Clothes washer and dryer
(b) Refrigerator
(c) Freezer
(d) Stove
(e) Microwave oven
(f) Sewing machine

Limited Household Exemptions
$1,000 aggregate of these:
(a) sofas, chairs, and related furnishings reasonably necessary for one household
(b) dining and kitchen tables and chairs reasonably necessary for one household
(c) animals, books, and musical instruments, if reasonably held for the personal use of the individual or the individual’s dependents
(d) heirlooms or other items of particular sentimental value to the individual
(e) firearms and ammunition in the amount of $250 per individual, and not more than $500 per household.

Tools of the Trade
$5,000 of these:
Professional books or tools of the individual’s trade, including motor vehicles to which no other exemption has been applied, and that are actually used by the individual in the individual’s principal business, trade, or profession.

Links
Utah Bankruptcy exemptions can be found under three sections in the Utah Code:
78B-5-503
78B-5-505
78B-5-506

How do I download my taxes from the IRS?

Posted on by Sean Wood in Bankruptcy, Chapter 13, Chapter 7, Filing for Bankruptcy, Taxes

6355404323_ac5691e105_oAs a bankruptcy attorney I feel like I am always chasing down documents. There are a number of documents that need to be gathered and filed as part of your bankruptcy whether it is chapter 7 or chapter 13. Most documents that are needed to be filed with a bankruptcy, like taxes and pay stubs, are given to me in paper form.

When I get these documents from my clients I have to scan them to my computer and make sure they are in PDF format because everything that is filed now, whether it is with the federal bankruptcy court or the trustee’s office (in Utah at least) is filed electronically.

Often times clients know that they have filed their taxes but they just can’t remember where they put them or they have lost their taxes. I have good news for all my clients and for everyone filing for bankruptcy and for their attorneys. The IRS has a service called “Get Transcript” that allows you to download your IRS transcripts directly to your computer! This means that if you have a computer, or even probably a smartphone, you can log onto this website, download your IRS transcripts, and forward your transcripts on to your attorney without using a single piece of paper. And the best part about it is that it’s absolutely free.

Links:
“Get Transcript”, download your tax transcripts from the IRS

Do I need to hire a bankruptcy attorney?

Posted on by Sean Wood in Attorney Skills, Bankruptcy, Bankruptcy Attorney, Chapter 13, Chapter 7, Filing for Bankruptcy

waterblaster-pressure-washer-gx390The short answer is ‘no’. Anyone can file his or her own bankruptcy. Perhaps the wiser question is ‘should I hire a bankruptcy attorney?’ The short answer is ‘yes’. Allow me to explain.

When I was in college I ran a mobile detailing business with a friend of mine. I borrowed my dad’s pressure washer, bought a truck, and bought the necessary equipment and I went out and found some clients. The business was successful while it lasted but in the end my friend and I ended up at different colleges and we gradually wound up the business.

A couple of years later my dad went to go use the pressure washer on our driveway. When he tried to use the washer, only a weak stream came out. Frustrated, he came to me since I had used the washer so much in the past.

Thinking I was up for the challenge, I decided to have a go at it. The engine seemed to be working just fine so I turned to the pump, a complex copper piece attached to the engine. I was a little nervous but I started taking the pump apart. Inside I found all kinds of pieces that somehow worked together. I tried my best to remember where everything went but there were just too many pieces and I started to forget how to reassemble the machine.

I sat there on the garage floor surrounded by various pieces. I couldn’t find the owner’s manual so I had to download a PDF from the Internet. I ran out of time that Saturday but I thought I had a pretty good idea of which piece needed to be replaced. I emailed the corporate headquarters of the company that made the actual pump and ordered a part from them.

A couple of Saturdays later I found sometime and I attempted to put the pump back together. Needless to say, it took much longer than I had expected. I ran into all kinds of weird mechanical hiccups. Finally, at the end of that Saturday, I was able to put everything back together and I decided to give the pressure washer a test run. I was really hoping the darn thing would work because I had just invested two Saturdays into fixing the washer and I had spent some of my dad’s money buying a new part. If it didn’t work, I was going to be ticked. The moment of truth was here. I fired up the engine and squeezed the trigger. A powerful stream came shooting out of the machine. I was relieved that I didn’t have to spend another Saturday troubleshooting that pressure washer.

Now you might be asking at this point, what does a pressure washer have to with the price of tea in China? More specifically, what does a pressure washer have to do with bankruptcy? I’ll tell you.

There are several repair shops near my house that know how to fix pressure washers. I could have easily taken the washer to one of those shops. It would have been easier. It would have saved me two Saturdays. True, it would have been more expensive. But most importantly, I would be more certain that the job would get done.

Sometimes people ask me if they need an attorney to file bankruptcy. Again, the answer is ‘no’. Generally you don’t need an attorney to represent yourself in legal matters. But I generally would not recommend going at it alone. When I was fixing that pressure washer, I decided to do it on my own because the risk was low. If I didn’t fix the washer, someone else could probably fix it. Even if I destroyed it, we could go buy another one for a couple hundred bucks.

You and your family’s economic well-being is a whole “nother” story. Can you really afford to lose your house or your car? Can you afford to have your wages garnished? Do you really want to roll the dice on these things? Of course you can always re-file should your case get dismissed but there are consequences to filing again. And if you have to file again, you have to pay the filing fee again. At this point, you aren’t really saving much money at all and you have to do all the work. The work takes you longer than it would an attorney because it is something you are new at and you don’t know if you are doing it right. The list goes on and on.

Do you have to hire a bankruptcy attorney? No. Should you hire a bankruptcy attorney? Yes.