Current client

I am currently in a Chapter 7 bankruptcy

Q. My bankruptcy case has been filed. Now what can I expect?

A. There are two things that you will have to do after the bankruptcy case is filed in order to receive a discharge of your debts. One of the things that you have to do is attend a hearing in front of an attorney that works for the Bankruptcy Court called  a Trustee. This meeting is called a “Meeting of Creditors” or a “Section 341 Meeting”. This meeting is scheduled by the court for about six weeks after your case is filed. You will need to bring your valid social security card and driver’s license to the Meeting. The meeting takes approximately five minutes and you will be questioned to make sure you were truthful on everything we submitted to the court.

The other thing you will have to do after filing is complete the Debtor Education Course, also known as a Financial Management Course, which will give you fundamental financial knowledge that will help you make the most of the fresh start that you receive from bankruptcy. The class must be completed no later than 45 days after your first scheduled Meeting of Creditors. After you have completed both of those things, you will just need to wait for your Discharge Order in the mail from the Bankruptcy Court stating that your case is over and the debts have been forgiven.

 

Q. Are there any restrictions while I’m in the bankruptcy?

A. You cannot use or obtain credit while you’re in the bankruptcy and you cannot sell or transfer property without the court’s written permission while you’re in the bankruptcy. If you have any questions, contact your attorney at Steidl and Steinberg. Also, you must notify your attorney if you receive or become entitled to a lump sum pf money, such as an inheritance or lottery winnings.

 

Q. I am giving up my house in my bankruptcy. How long until I have to move out?

A. Now that you are in bankruptcy, your mortgage company will have to ask the bankruptcy court for permission to continue with foreclosure or a sheriff’s sale. Usually this extra step adds about a month onto the usual six to eight months that it takes from the date that a mortgage company starts foreclosure proceedings until the former owner has to move out. This can vary depending on the situation. Be aware that until a sheriff’s sale is completed, you are still responsible for basic maintenance on the property such as grass cutting and snow removal.

 

Q. I am no longer receiving statements from my mortgage company and/or car loan company and/or I can no longer pay online. Why is this?

A. Once you enter into a bankruptcy, federal law prohibits your creditors from trying to collect money from you. Even though you intend on keeping your house and/or car and continuing to pay for it, some lenders stop sending statements and restrict the ways that you are able to make a payment in order to protect themselves from being accused of trying to collect a debt. Once the bankruptcy is over, if you contact the mortgage or car loan companies they will sometimes agree to resume sending you statements or taking the money directly out of your bank account. Sometimes they do not, so remember to make the payments timely every month.

 

Q. I forgot to include a creditor on my bankruptcy. Is it too late to add something?

A. As long as the debt was incurred before your case is filed, it can be added into the bankruptcy. Call your attorney to let him or her know that a creditor needs to be added as soon as you discover the oversight.

 

Q. How long until my case is over?

A. The average Chapter 7 bankruptcy case lasts four to six months. You will know that your case is over whenever you get your Discharge Order in the mail from the court stating that your case is closed and your debts are discharged. The average Chapter 13 case range from 36 to 60 months, plus the time it takes for the Court to administratively close the case.

 

Q. Which debts will the bankruptcy not get rid of?

A. You are still responsible for mortgage payments (if you are keeping the home) or rent, car payments (if you are keeping the car), utility bills that you incur after the case is filed, all student loans, taxes (unless you were specifically told by your attorney that these would be discharged), court fines, all obligations under a Family Court Order, and criminal restitution. Do not hesitate to contact your attorney at Steidl and Steinberg if you have any questions about your specific situation.

 

Q. How long will it show on my credit report that I’ve filed for Chapter 7 bankruptcy?

A.  Your Chapter 7 bankruptcy is on your credit report for 10 years after the filing date. However, you can begin to rebuild your credit as soon as your case is over. Most of our clients have obtained credit very quickly after that.

 

Q. How long will it show on my credit report that I’ve filed for Chapter 13 bankruptcy?

A. Your Chapter 13 bankruptcy is on your credit report for seven years after the filing date, but you can begin rebuilding your credit as soon as your case is over.

 

Q. Will filing for bankruptcy affect my ability to co-sign on my child’s student loans?

A. There is a provision of the Bankruptcy Code that makes it illegal for student loan providers to discriminate against you due to the fact that you’ve filed for bankruptcy. However, the student loan provider must still qualify you based on their own criteria. You must still obtain the Court’s written permission if you wish to obtain or co-sign a student loan. The Court will generally grant that permission.

 

Q. Will I be able to rebuild my credit after my case is over?

A. According to our past clients with whom we have been in contact with, the answer is a resounding “Yes.”  It still requires some work on your part.  It is not a bad idea to get a small credit card that you use a little bit each month and then pay off the balance before the month is over and you accrue any interest charges. The goal is to show consistent payments without carrying balances.

 

I am currently in a Chapter 13 bankruptcy

Q. My bankruptcy case has been filed. Now what can I expect?

A. Now that your bankruptcy has been filed, your creditors are no longer allowed to try to collect any debts from you. Your first payment to the Bankruptcy Court is due one month after your case is filed. Your attorney and paralegal should have discussed with you how those payments are to be made. You will have to attend a Meeting of Creditors about a month and a half to two months after your case is filed. This is a hearing that occurs in front of an attorney that works for the Bankruptcy Court. You will need to bring your valid social security card and driver’s license or PA identification card with you along with proof that your first Chapter 13 Plan payment has been made. The purpose of this meeting is to make sure that you were truthful on everything you submitted to the bankruptcy court and that your bankruptcy plan is adequate to pay all of your creditors that must be paid. Your creditors will have until about six months after your case is filed in order to submit what is called a “proof of claim” to the court. The proof of claim states the amount that you owed to the creditor as of the date the case was filed. An additional meeting, called a Conciliation Conference, will be held on your case about three months after the Meeting of Creditors. You do not have to attend this meeting. An attorney from Steidl & Steinberg will attend the meeting for you. The purpose of this meeting is to make sure that the numbers that we submitted to the court are similar to those submitted by your creditors and to make sure that you are still on track to pay everyone that must be paid. As long as everything goes well at this meeting, the only thing left for you to do is keep making your payments to the Bankruptcy Court and let your attorney know if your situation changes.

 

Q. Are there any restrictions while I’m in the bankruptcy?

A. You cannot use or obtain credit while you’re in the bankruptcy and you cannot sell or transfer property while you’re in the bankruptcy unless you get Court’s written approval first. If you have any questions, contact your attorney. Also, you must contact your attorney if you have any large decreases in income, large increases in expenses or come into a large amount of money.

 

Q. What bills am I responsible for paying on my own during the bankruptcy?

This can vary slightly from case to case, but a general list of bills you will still be responsible for includes: rent, utilities, insurances, current medical bills and taxes that are not deducted from your pay or escrowed into your mortgage.

 

Q. Will anything change with the way that I file my tax returns?

A. No. There are no additional forms that need to be filled out and in virtually all cases you will get to keep your tax refund.

 

Q. I am giving up my house in the bankruptcy. How long until I have to move out?

A. Now that you are in bankruptcy, your mortgage company will have to ask the bankruptcy court for permission to continue with foreclosure or a sheriff’s sale. Usually this extra step adds about a month onto the usual six to eight months that it takes from the date that a mortgage company starts foreclosure proceedings until the former owner has to move out. Be aware that your are responsible for basic maintenance on the property, such as grass cutting and snow removal, until the house is sold at sheriff’s sale.

 

Q. I forgot to include a creditor on my bankruptcy. Is it too late to add something?

A. As long as the debt was incurred before your case is filed, it can be added into the bankruptcy. Call your attorney to let him or her know that a creditor needs to be added as soon as you discover the oversight.

 

Q. My wage attachment doesn’t seem to add up correctly. Is there something wrong?

A. If you feel that your wage attachment is not correctly computed, it is very likely that you get paid every two weeks. You must remember that getting paid bi-weekly will result in you getting 26 pays over the course of a year. Two months out of the year you will get an extra pay. That pay is also attached. In order to figure out how much should come out of each pay, we calculate how much has to be paid into the plan over the course of a year (monthly plan payment x 12) and then divide that number by the number of pay checks you will receive in a year.

 

Q. Is there any way I can keep track of what is happening to the money I send to the Trustee?

A. The trustee will send out a report once a year showing how the money has been distributed. That report might be difficult to interpret. If you would like to be able to monitor the activity on your account more often and in a more understandable format, you can go to www.13network.com, choose Ronda Winnecour in Pennsylvania  and log in using your case number as your user ID and your Social Security number as your password.

 

Q. I can’t afford my Chapter 13 payments anymore. Is there something that can be done?

A. In some cases, if your income has gone down or your expenses have gone up from the date your case was filed, your payment can be reduced. You must contact your attorney to discuss any Chapter 13 Plan payment changes.

 

Q. Will filing for bankruptcy affect my ability to co-sign for my child’s student loans?

A. You cannot obtain financing during your bankruptcy, including co-signing for a student loan, unless you get court approval first. It is best if a family member or close friend can co-sign for the student loan while you are in the bankruptcy. If that is not possible,  contact your attorney regarding court approval for you to be a co-signer. Once the bankruptcy is over, you can obtain a loan without court approval. There is a provision of the Bankruptcy Code that makes it illegal for student loan companies to discriminate against you due to the fact that you’ve filed for bankruptcy. However, the student loan company must still qualify you based on their own criteria.

 

Situations that may arise that will require you contact your attorney include, but are not limited to:
  • You have had a significant decrease in income to the point that it is affecting your ability to make your plan payments.
  • You have had an increase in living expenses.
  • You are the recipient of an inheritance, lottery winning or other large sum of money.
  • You have retained another attorney for any reason. For example: divorce, personal injury, worker’s compensation.
  • You want to sell your house or car.
  • You want to obtain financing for any reason, including purchasing a vehicle.
  • You have moved or changed telephone numbers.