November 10, 2011

What Happens After Filing Bankruptcy?

Posted in Bankruptcy tagged at 9:19 am by demetriagraves

This is a series of articles that go over in more detail the timeline of a bankruptcy filing and what to expect on each step. In last week’s article I discussed what to expect prior to your bankruptcy case being filed. In this article I will go over what you can expect after your case is filed up through the day when the bankruptcy court grants you a discharge of your debts.

Immediately upon filing your bankruptcy case the bankruptcy court issues an order called the Automatic Stay that stops all collection efforts against you. The Automatic Stay is one of the most powerful tools in bankruptcy law. Whether you are being sued, your house foreclosed, your wages garnished, or are dealing with never ending collection calls, the Automatic Stay mandates that all collection efforts stop immediately. The bankruptcy court will mail out notice to your creditors within about 2-3 business days.

Every Chapter 7 bankruptcy case is assigned a trustee. The trustee assigned to your case works under the Department of Justice and their job is to evaluate your case, review your documents, and collect any non-exempt assets that can be distributed to your creditors.

A week or two after your case is filed you will receive a letter from your bankruptcy trustee informing you of the date for the Meeting of Creditors (more about that below), and requesting some bank statements, pay stubs, and tax returns. It is vital that you respond to your trustee’s request for documents in a timely manner. If you don’t, your bankruptcy case can be delayed.

If you have assets that you own free and clear that are not protected under California’s exemption laws, in a Chapter 7 bankruptcy your trustee can seize those assets, sell them, and distribute the proceeds to your creditors. Your clothing,  personal possessions and the home you live in are usually protected by exemption laws, so you don’t have to worry about losing all your assets.

The Meeting of the Creditors, or “341” meeting sounds a lot scarier than it is. While it is the creditor’s meeting, it is usually a meeting between you, your attorney and your bankruptcy trustee. Rarely do creditors actually appear at the meeting.

This meeting is an opportunity for your bankruptcy trustee to meet with you and ask you questions about your bankruptcy filing while under oath. You will be required to show government issued photo ID – i.e. your driver license, and proof of your social security number.

Once the meeting begins you will be asked a few questions by the trustee. Specifically, you will be asked if you reviewed and signed your bankruptcy documents prior to filing. If you owe or pay child support or spousal maintenance, and if you are a beneficiary under a will or trust. Then, if the bankruptcy trustee has any specific questions about your case he/she will ask them at that time.

The typical Meeting of Creditors lasts about 5 minutes – literally 5 minutes. I know it is easy for me to say, but the Meeting of Creditors, while important, is nothing to lose sleep over.

Once the Meeting of Creditors is over the only thing you have left to do is to complete a Financial Management Course. This course must be completed within 30 days after the Meeting of Creditors.

About 60 to 90 days after the Meeting of Creditors is held you will receive your Discharge Order from the bankruptcy court if you are in a Chapter 7 bankruptcy case. This order is the official document that says you are no longer legally obligated on your debts. It also signals the end of your bankruptcy case in most instances. Creditors who try and collect on debts that have been discharged are subject to being sanctioned.

Once you get through this second stage of the bankruptcy process you are well on your way to becoming debt free. In most cases the hard part is over and it is time to merely wait for the bankruptcy court to finalize your case.

If you have further questions about the bankruptcy process and if it’s the best option for you. I offer a free 30 minute telephone consultation where you can get your questions answered.

November 3, 2011

Kim Kardashian Divorce

Posted in Uncategorized at 8:09 am by demetriagraves

After spending $10 million on a spectacular highly publicized wedding on August 20, 2011. Then a having dream honeymoon, its seems like its over for newlyweds Kim Kardashian, 31 and Kris Humphries, 26 after only 72 days of marriage. Perhaps Kim only wanted the big ring and the celebrity wedding for her reality show but didn’t think much about the actual realities of marriage because she has filed for divorce on Oct 31, 2011. It’s a good thing neither of them actually paid for the wedding, in fact they made more than $17 million out of their wedding in TV and magazine deals. There are rumors that the split comes from a difference of opinion on where the couple wanted to live. Kris was planning on settling down in Minnesota while Kim wanted to stay in California so she could be close to her family.

The reality star cited “irreconcilable differences” in her divorce papers and she is not asking for spousal support. She is also requesting that no spousal support be paid to her future ex. So the NBA star won’t be getting any of Kardashian’s money. Kardashian also asks that each party pay their own attorney fees.

Indeed, there’s a huge financial gulf between the future exes. Kim helped her family rake in $65 million in 2010 alone thanks to endorsement deals, a Sears clothing line, her own perfume and earnings from her E! reality shows.

By contrast, Humphries – currently not working thanks to the NBA lockout – made a reported $3.2 million a year as a forward for the New Jersey Nets.

There are rumors that the athlete was the victim of an “investment fraud,” thanks to Andrey C. Hicks, a scam artist and a guest at their doomed August wedding. Humphries is said to have lost hundreds of thousands of dollars for investing in Hicks’ bogus “billion dollar” hedge fund.

This is Kardashian’s second divorce, she wed music producer Damon Thomas in 2000 when she was just 19 and he filed for divorce two years later.

“I hope everyone understands this was not an easy decision,” Kardashian said, “I had hoped this marriage was forever but sometimes things don’t work out as planned.”

What Can I Expect Before My Bankruptcy Case is Filed?

Posted in Uncategorized at 7:57 am by demetriagraves

Last week I went over the whole timeline of a bankruptcy filing and how long the whole process takes. This week I want to provide more detail on the various stages of the bankruptcy process and I want to focus more on what happens prior to filing. Often, the scary part of bankruptcy is not knowing what to expect. There are a lot of bankruptcy myths out there that cause many people to not seek out bankruptcy help, even though it can really help them out of a tough spot. Having an accurate understanding of the bankruptcy process usually relieves a lot of stress and can help you work towards becoming debt free. Chapter 7 bankruptcy cases can basically be broken down into three parts: pre-filing, pre-meeting of creditors, and post -meeting of creditors.  In this article I will focus on the pre-filing stage of your case.

Usually the first step is the bankruptcy consultation. I, like many bankruptcy attorneys, offer a free bankruptcy consultation where we can discuss your specific situation, go over the basics of a Chapter 7 bankruptcy and determine if bankruptcy is a good option for you. Prior to your consultation it is helpful to have at least a general idea of what your debts are. Sometimes things have gotten so bad people have thrown their hands up and completely checked out when it comes to what they owe and who they owe it to.

There is a lot of information required to file a bankruptcy case. The typical Chapter 7 case is about 50-60 pages long when completed. Information like income, expenses, debts, assets, financial transactions, business information, contracts, and the like are required to be disclosed to the bankruptcy court. I work with my clients to gather this information and then prepare the bankruptcy petition, schedules, and statement of financial affairs.

Throughout this process it is vital that the information you provide to my office is accurate. I know this is a pain. Getting information on assets, debts, income, pay stubs, bank statements, etc. are time consuming and tedious. But the more accurate we can be in your bankruptcy filing the smoother the process will go for you once your case is actually filed. Also, be completely honest with your attorney. The penalties for failing to disclose an asset or transaction are severe. When it doubt, disclose. I promise, it will save you a lot of grief down the road.

Before your case can be filed you must complete a court approved bankruptcy credit counseling course. My clients are able to do this online and it takes a little over an hour. It is not a big deal, but must be done before I can file your case.

In a Chapter 7 bankruptcy case you will be required to pay all legal fees and court costs prior to your case actually being filed with the court. I go over this at the initial consultation with clients so that arrangements can be made for payment in full prior to filing.

The final step before your bankruptcy case is filed is the review and sign. This is where we meet and go over all of the documents we intend to file with the court. The purpose of the meeting is two-fold: first, we want to make sure that all the information we are providing the court is thorough and accurate. Second, after your case is filed you will meet with your bankruptcy trustee and be required to testify under oath that you reviewed and signed the documents prior to filing. After this meeting you will have accomplished both purposes.

After all the work has been done in gathering information and preparing the documents the day finally arrives to file your case. At the final Review and Sign we will set a date when your case will be filed.

While this is just a brief overview of the pre-bankruptcy process, it is important to note that this is an important time in your case. The accuracy of the information we provide to the court will help in determining if your case will proceed smoothly or if you will have problems that will delay the final discharge.