Important Information

Before You File . . . 

1) NEW DEBT: Do not incur any new debt within the 90 days prior to filing bankruptcy. Debts incurred within the 90 days before filing your bankruptcy petition are not dischargeable through bankruptcy, and in some situations, can even lead to having your case dismissed.

2) TRANSFERRING ASSETS: Do not give away, trade-in, or sell (that includes money, cars, real estate, jewelry, personal belongings) prior to filing your bankruptcy case. If you have done so within a year prior to filing (two years for relatives), you must disclose that information to the Trustee. Also, do not try to hide assets by putting them in someone else's name. This can be construed as a "fraudulent transfer of assets" and the trustee has the authority to reclaim the transferred asset. Also, you cannot transfer any assets without the trustee's permission, because while your case is pending, your assets are then technically owned by the "bankruptcy estate" and do not fully belong to you.

3) PAYMENTS TO CREDITORS: Do not make any large payments to any unsecured creditors within the 90 days prior to filing (especially if the creditor is a family member or a business associate)! The only creditors that you should continue to pay prior to (and after) filing bankruptcy are secured creditors; i.e. your mortgages or car payments. If you have made any payments totaling more than $600 to any one unsecured creditor within 90 days prior to filing, the trustee can demand the money back from that creditor so that it can be broken up evenly among all unsecured creditors.

This rule, of course, does not apply to secured creditors (mortgages, car payments). You must keep paying those creditors if you want to be able to keep those assets.

4) KNOW WHO YOU OWE:  Make certain that you have given us a complete list of your creditors and their addresses. If a creditor is not given proper notice that you have filed bankruptcy that creditor may be able to enforce their claim against you later on, even if you receive a discharge from the court on all your other debts.

5) TAX REFUNDS: If you receive an income tax refund just before you file you cannot spend it. It may be an asset of the bankruptcy and the trustee can demand it be paid into the bankruptcy estate, or if you have already spent it, he can demand you send him an  equivalent sum of money.

6) FILING FEES: The court filing fee is $299 for a Chapter 7 bankruptcy and $274 for a Chapter 13 bankruptcy. The filing fee must be paid in advance.

7) CREDIT COUNSELING: The new bankruptcy laws require you to take two classes. First, you must take a credit counseling class with an approved credit counseling agency within the 180 days before you file. Second, you must take a debtor education class after you file to get your discharge.  These classes are offered on-ground, over the telephone, and on the Internet.  We will provide you with a list of approved agencies, some of whom offer a discount if you sign up for both classes with them.

After you file . . .

1) THE AUTOMATIC STAY:  The “automatic stay” is a bankruptcy rule that prevents creditors from doing anything at all to enforce a claim against a debtor during the bankruptcy case. It stops all state civil cases that have been filed against you, such as foreclosure, repossession, eviction, wage garnishments, or creditor actions (but it cannot stop a criminal prosecution, child support or alimony payments, or IRS audits.) It also prevents utilities companies from disconnecting your service for at least 20 days. When your case is discharged, the automatic stay is replaced by a permanent injunction that prohibits creditors from trying to collect any debts that have been discharged.

2) IMPORTANT NOTE FOR CHAPTER 7 FILERS CONCERNING SECURED DEBTS: (mortgages, car payments, etc.): To protect your property, you must continue to make your payments to secured creditors ON TIME both before and after filing Chapter 7 bankruptcy. NOTE. After you file, automatic payments that are deducted from your checking account may be stopped, and creditors may stop sending bills, but you must continue to make the payments, because if you get behind on a secured payment after filing bankruptcy, that creditor has every right to make a motion to vacate the automatic stay and take the asset away from you (and they most likely will). So in order to keep that property, a debtor must agree to reaffirm the debt and also make arrangments with the creditor to continue making payments while the bankrupcty is proceeding.

3) TAX REFUNDS: If you receive an income tax refund within 180 days after your bankruptcy has been discharged, you cannot spend it until you have notified the trustee. It may be an asset of the bankruptcy.