Posted on October 14, 2016 in Automatic Stay

A creditor might want to pursue your co-debtor, protect itself from violating the stay, or take some other action other than collect money.

So far we’ve covered four reasons why creditors ask for “relief from stay” other than for permission to repossess collateral. Creditors seek permission to finish a lawsuit or other legal proceeding to determine:

1. whether you owe any debt or a claim to the creditor
2. the amount of that debt or claim, assuming you agree that owe something
3. whether you owe a debt that can be paid by insurance
4. whether a debt you owe can be discharged (written off) in bankruptcy

Today we’ll cover three more reasons that a creditor may ask the bankruptcy court for “relief from stay”:

1. to get a court determination whether the creditor’s intended actions would violate the automatic stay
2. to get relief from the co-debtor stay, to pursue someone else liable on your debt

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 Posted on October 12, 2016 in Automatic Stay

A creditor might ask to pursue an insurance-paid claim or to finish a lawsuit determining if you incurred the debt through fraud.

Our last blog post introduced reasons why creditors ask for “relief from stay” other than for permission to repossess collateral.

The “automatic stay” is one of the biggest benefits to filing bankruptcy. It “stays”—legally stops—virtually all creditors’ collection actions immediately when you file bankruptcy. The automatic stay protects you from creditor lawsuits, garnishments, phone calls, repossessions, etc., and does so permanently under most circumstances. So it’s important to know the circumstances under which a creditor would have grounds to ask for “relief from stay.”

Last time we explained two of those circumstances, to allow a creditor to finish a legal proceeding against you to determine:

1. whether you owe a debt or a claim at all

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 Posted on October 10, 2016 in Creditor Lawsuits

Creditors sometimes have good reasons to ask for permission to finish resolving an ongoing dispute outside of bankruptcy court.

In our last blog post we talked about the possibility of creditors asking for “relief from the automatic stay.” This phrase refers to a creditor asking the bankruptcy court for permission to pursue a debt or claim in spite of your bankruptcy filing. The “automatic stay” stops creditors from taking collection action against you immediately upon your bankruptcy filing. In certain limited circumstances a creditor may have legal grounds to ask for an exception to be made to that automatic stay protection.

We referred last time to what is probably the most common situation in which creditors ask for “relief from the automatic stay.” That’s when creditors want to assert their rights against the collateral securing the debt. For example, they want to repossess a vehicle or start a home foreclosure because you aren’t making the monthly payments. They can’t take such action until asking for and getting “relief from stay” from the bankruptcy court.

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 Posted on October 07, 2016 in Automatic Stay

Creditors sometimes have grounds to ask for permission to resume or start collection action against you in spite of your bankruptcy filing.

In our last blog post we talked about the “automatic stay.” It’s one of the most important benefits of filing bankruptcy. It’s certainly the fastest, going into effect immediately when you or your lawyer files your bankruptcy case. The automatic stay stops virtually all attempts by creditors to collect their debts against you, your money, and your property.

But sometimes this protection is only temporary. Creditors sometimes have some say about whether the automatic stays in effect, its protection ends, or is modified. See Section 362(d) of the U.S. Bankruptcy Code.

“Relief from the Automatic Stay”

When you think of “relief” in bankruptcy you most likely think of your relief from creditors. A couple blog posts ago we said that at the heart of the bankruptcy petition are the words, “I request relief.”

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 Posted on October 05, 2016 in Automatic Stay

Chapter 7 gives you immediate protection against creditor collection actions. Chapter 13 protects you longer, if needed.

The automatic stay is the very strong legal protection from your creditors you receive when you file a bankruptcy case. The automatic stay stops virtually all attempts by creditors to collect their debts against you, your money, and your property. It goes into effect at the moment you or your lawyer files your bankruptcy case.

A "Stay"

To “stay” means to stop or suspend. As in a stay of execution. In bankruptcy it refers to the stopping of almost all collection activity against a debtor. (See the list of types of all the kinds of actions that the automatic stay stops at U.S. Bankruptcy Code Section 362(a).)

It’s Automatic

In our last blog post we showed that a voluntary bankruptcy case is begun by the filing of a “petition.” That filing itself “constitutes an order for relief.” (See Section 301(b).)

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 Posted on October 03, 2016 in Bankruptcy Procedure

The Petition requesting relief and the Schedules of assets, debts, income, and expenses are the key documents filed in your bankruptcy case.

Bankruptcy Petition

A week ago we explained the difference between a voluntary bankruptcy case and involuntary one. Involuntary ones are so rare, especially in non-business settings, that there’s not much need to discuss them any further.

We also got into individual and joint bankruptcies. Voluntary individual and voluntary joint cases are both “commenced by the filing with the bankruptcy of a petition.” (See Sections 301(a) and 302(a) of the U.S. Bankruptcy Code.)

The petition is a document that currently, in its official version, is about 8 pages long. But at its heart are three simple, short words: “I request relief.”

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 Posted on September 30, 2016 in Bankruptcy Options

Your domicile, and sometimes your residence, determines whether you can file bankruptcy, where to file, and what property you keep.

1. Who Can File Bankruptcy? A person can file a bankruptcy case in a U.S. bankruptcy court if he or she “resides or has a domicile, a place of business, or property in the United States.” (Section 109(a) of the U.S. Bankruptcy Code.)

2. Where Can You File? The bankruptcy case must be filed in the bankruptcy court of the federal judicial district in which the person filing the bankruptcy has his, her, or its domicile, residence, principal place of business... , or principal assets.” (28 U.S. Code Section 1408.)

3. What Property Can You Keep? The person filing bankruptcy (the “debtor”) uses the set of “exemptions” (to protect property from creditors) available “at the place in which the debtor’s domicile has been located for the 730 days immediately preceding” the date of the bankruptcy filing. (Section 522(b)(3) of the Bankruptcy Code.)

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 Posted on September 28, 2016 in Bankruptcy Procedure

These two requirements are quite straightforward to accomplish, but can trip you up if you don’t take care of them when you need to.

“Credit Counseling”

Before you can file a personal bankruptcy case, you have to go through what is essentially a simple bureaucratic formality. But it IS a strict legal requirement that can cause unnecessary headaches if not done correctly. So it’s important to understand the “credit counseling” requirement.

The U.S. Bankruptcy Code requires the following during the 180 days before filing a bankruptcy case. You must get, “from an approved nonprofit budget and credit counseling agency,” “an individual or group briefing (including... by telephone or on the Internet) that outline[s] the opportunities for available credit counseling and assist[s]… in preforming a related budget analysis.” (See Section 109(h) of the Bankruptcy Code.)

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 Posted on September 26, 2016 in Bankruptcy Options

Almost all consumer bankruptcies are voluntary. Involuntary ones are mostly for businesses. Joint cases with your spouse save time and money.

Voluntary Bankruptcy Filing

People who need bankruptcy relief usually file voluntarily. This is the overwhelming way that bankruptcy cases are filed.

A voluntary case starts by your filing of a petition at the bankruptcy court. (See Section 301 of the United States Bankruptcy Code.) This is usually done electronically by your bankruptcy lawyer without anyone physically going to the court.

Your voluntary petition states which Chapter under which you are filing. You have to qualify to be a debtor in the Chapter you designate. If you are an individual (instead of a corporation or other business entity) you can file under Chapter 7, 11 or 13. (See our most recent blog post for a description of each of these options.)

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 Posted on September 23, 2016 in Bankruptcy Options

You file bankruptcy most likely under Chapter 7 or 13, or possibly 11. Ch. 12 is for farmers and fisherman, Ch. 9 for governmental entities.

Chapter 7

Chapter 7, or "straight bankruptcy,” is the most common type of bankruptcy. Nearly 2/3rds of all bankruptcy cases filed in 2015 were Chapter 7s

It’s what most people think of when they hear “consumer bankruptcy.” Chapter 7 often provides the quickest way to a financial fresh start. But it isn’t the best type of bankruptcy for everyone.

A Chapter 7 case legally eliminates (“discharges”) many but not always all debts. Certain kinds of debts, such as child or spousal support obligations owed to an ex-spouse under a divorce decree or settlement, are never discharged under Chapter 7. Other debts, such as income taxes, can be discharged if they meet certain conditions. Student loans are very rarely dischargeable.

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