What is bankruptcy?
Bankruptcy is a legal procedure for dealing with debt
problems of individuals and businesses; specifically, a case filed under
one of the chapters of Title 11 of the United States Code (the
Bankruptcy Code).
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What is the automatic stay?
Generally, the filing of the bankruptcy case
automatically stays certain collection and other actions against the
debtor and the debtor's property. There are some exceptions
provided for in 11 U.S.C. Section 361. If you attempt to collect a
debt or take other action in violation of the Bankruptcy Code, you may
be penalized. Consult a lawyer if you are uncertain of your rights
with regard to the automatic stay in a bankruptcy case.
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Who can start a bankruptcy?
Any person, partnership, corporation or business
trust may file a bankruptcy. If the debtor ( person or entity who owes
the money) files a petition to start the bankruptcy, it is a voluntary
bankruptcy. If the creditors (people or entities to whom the money is
owed) file a petition against a debtor to start the bankruptcy, it is an
involuntary bankruptcy. If an involuntary case is filed, the debtor has
a specific number of days in which to contest the petition and contend
it should not be in bankruptcy.
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What is a joint petition?
A joint petition is the filing of a single petition
by an individual and the individual's spouse. Only people who are
married as of the date they file may file a joint petition.
Unmarried persons, corporations and partnerships must each file separate
cases. If you are an individual and have a business, you may not
file a single petition for yourself and your business, each must be a
separate bankruptcy case.
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What are the different "chapters"
in bankruptcy?
Chapter 7 is the liquidation chapter of the Bankruptcy Code. Chapter
7 cases are commonly referred to as "straight bankruptcy" or
"liquidation" cases, and may be filed by an individual, corporation or a
partnership. Under Chapter 7, a Trustee is appointed to collect and sell
all property that is not exempt and to use any proceeds to pay
creditors. In the case of an individual, the debtor is allowed to claim
certain property as exempt. Chapter 7 individuals may receive a
discharge, which means that the debtor does not have to pay certain
types of debts. Corporations and partnerships do not receive discharges.
Consequently, any individuals legally liable for the partnership's or
corporation's debts will remain liable. Therefore, individual
bankruptcies may be necessary as well as the corporation or partnership
bankruptcy.
Chapter 9 is only for municipalities and
governmental units, such as schools, water districts and so on.
Chapter 12 offers bankruptcy relief to those
who qualify as family farmers or family fishermen. There are debt
limitations for Chapter 12, and a certain portion of the debtor's income
must come from the operation of a farming or fishing business.
Family farmers or fishermen must propose a plan to repay their creditors
over a period of time from future income and it must be approved by the
Court. Plan payments are made through a Chapter 12 Trustee who
also monitors the debtor's farming or fishing operation while the case
is pending.
Chapter 11 is the reorganization chapter
available to businesses and individuals who have substantial assets
and/or income to restructure and repay their debts. Creditors vote
on whether to accept or reject a plan of reorganization which must be
approved by the Court. In addition to the filing fee paid to the
Bankruptcy Clerk, a quarterly fee is paid to the U.S. Trustee in all
Chapter 11 cases.
There is no debt limit under Chapter 11.
However, only a Chapter 11 debtor that qualifies as a small business may
request expedited treatment under Chapter 11. To qualify as a "small
business," the Debtor must be engaged in commercial or business
activities, other than the ownership of real property, and the total of
secured plus unsecured debts must be less than $200,000.00. Due to
the expense and complexity of Chapter 11, the decision to file a Chapter
11 petition should be made in consultation with an attorney.
Chapter 13 is the debt repayment chapter for
individuals with regular income whose debts do not exceed $1,230,650
($307,675 in unsecured debts and $922,975 in secured debts), including
individuals who operate businesses as sole proprietorships. This
chapter is not available to corporations or partnerships . Chapter
13 generally permits individuals to keep their property by repaying
creditors out of future income. Chapter 13 debtor proposes a repayment
plan which must be approved by the Court. The amounts set forth in
the plan must be paid to the Chapter 13 Trustee who distributes the
funds for a small fee. Many debts that cannot be discharged can
still be paid over time in a Chapter 13 Plan. After completion of
payments under the plan, Chapter 13 Debtors receive a discharge of most
debts.
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Which chapter is right for me?
You have a choice in deciding which chapter of the
Bankruptcy Code will best suit your needs. The decision whether to
file a bankruptcy, and under which chapter to file depends on the
particular circumstances of the debtor. Also, considering your personal
facts, comparing them to each chapter's requirements, and deciding which
chapter to select, is considered legal advice. Clerk's Office
staff, Bankruptcy Petition Preparers, typing services and paralegals are
prohibited by law from giving legal advice. Only a lawyer can give
legal advice.
The decision
whether to file a bankruptcy and under what chapter is an extremely
important decision and should be made only with competent legal advice
from an experienced bankruptcy attorney after a review of all the
relevant facts of the debtor's case.
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Where can I get more information
concerning bankruptcy and bankruptcy procedures?
The easiest way to get low or no-cost bankruptcy
advice is to make an appointment with a private attorney. Many
will provide a free initial consultation during which you can have your
questions regarding bankruptcy procedures and their application to your
situation answered.
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Do I need an attorney to file
bankruptcy?
While it is possible to file a bankruptcy case "Pro
Se", that is, without representation by an attorney, it is extremely
difficult to do so successfully. Hiring a competent attorney is highly
recommended. The Court is not able to give legal advice or help fill out
forms. For more information on
filing without an attorney click
here.
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What is a Pro Se Debtor?
A Pro Se debtor is a person who files bankruptcy
without an attorney. A Pro Se debtor is responsible for all
proceedings of his/her case. Failure to comply with the Bankruptcy
Code and Rules or with court orders may result in the dismissal of the
debtor's case. It is recommended that all debtors seek legal
advice before filing bankruptcy.
Please view the Pro Se section on this web site.
Click here.
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Can the Clerk's Office give legal
advice?
A bankruptcy case is a legal proceeding affecting the
rights of debtors, creditors and other parties in interest.
Pursuant to 28 U.S.C. Section 955, the Clerk's Office staff is
prohibited from giving information which may be characterized as legal
advice.
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What does the Clerk's Office do?
The Clerk's Office provides a variety of services to
the bankruptcy judges, attorneys and the public. The Clerk's
Office staff provides clerical and administrative support to the court
by maintaining case-related documents, sending notices and setting
hearings. The services provided to attorneys and the public by the
Clerk's Office include responding to requests for information and making
copies of documents in bankruptcy court files.
Although Clerk's Office staff cannot give you legal
advice, the U.S. Bankruptcy Court is a source for many forms and local
rules which you will need to file your bankruptcy petition and related
documents.
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What documents do I need to start
a bankruptcy?
Click here to see
the listing of filing requirements
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Where can I obtain petition
forms?
Petition forms can be found at most local office
supply stores, through the court's website and at
www.uscourts.gov.
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Can the Clerk's Office help
me fill out my forms?
No, members of the Clerk's Office are prohibited from assisting with
the completion of any forms.
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How do I know if a debt is
secured, unsecured, priority or administrative so I can fill out my
schedules correctly?
A.
Secured Debt
A secured debt
is a debt that is backed by property. A creditor whose debt is "secured"
has a right to take property to satisfy a "secured debt". For
example, most homes are burdened by a "secured debt". This means
that the lender has the right to take the home if the borrower fails to
make payments on the loan. Most people who buy new cars give the
lender a "security interest" in the car. This means that the debt
is a "secured debt" and that the lender can take the car if the borrower
fails to make payments on the car loan.
B. Unsecured Debt
A debt is unsecured if you have simply promised to
pay someone a sum of money at a particular time and you have not pledged
any real or personal property as collateral for that debt.
C. Priority Debt
A priority debt is a debt entitled to priority in
payment, ahead of most other debts. A listing of priority debts is
given, in general terms, in 11 U.S.C. Section 507 of
Bankruptcy Code. Examples of priority debts are some taxes, and
wage claims of employees. If you have questions deciding which of
your debts are entitled to priority status, you should consult an
attorney.
D. Administrative Debt
An administrative debt is also a priority debt and is
one created when someone provides goods or services to your bankruptcy
estate. The best example of an administrative debt is the fee
generated by an attorney or another authorized professional in
representing the bankruptcy estate.
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What are exemptions?
11 U.S.C. Section 522(b) allows an individual debtor
to exempt real, personal, or intangible property from the property of
the estate. Exempt assets are protected from distribution to your
creditors by state law. Bankruptcy exemptions for the state of
Kentucky and the dollar amounts of those exemptions are listed in
Chapter 427 of the Kentucky Statute. Typically, exempt assets
include jewelry, vehicles up to a certain dollar amount, the equity in
your home up to a certain amount and tools of the trade.
Exemptions are claimed on Schedule C.
As with all schedules, it is important to complete fully and provide all
the information requested. If no one objects to your exemptions in
the time frame specified by the bankruptcy court, these assets will not
be a part of your bankruptcy estate and will not be used to pay
creditors through your bankruptcy case.
Deciding which assets are exempt and how and if you can protect
these assets from creditors can be one of the most important and
difficult aspects of your bankruptcy case. It is extremely
important to consult an attorney if you have any questions regarding the
issue of exempt assets.
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Where do I file my bankruptcy
case?
The bankruptcy court is a Federal Court. The Federal
Court system divides the United States into judicial districts. Every
state has at least one Federal Judicial District. Some states have more.
In Kentucky, for example, there are two Federal Judicial Districts. Our
Court handles bankruptcy matters for the Western District of Kentucky.
Due to its size, the U.S. Bankruptcy Court for the Western District of
Kentucky is split into four divisions, with the Louisville office being
staffed by the Bankruptcy Clerk's Office. The Clerk's Office is open
from 8:30 a.m. until 4:30 p.m. on all days except Saturdays, Sundays and
legal holidays. All correspondence should be mailed to the Clerk's
Office at the following address:
Clerk of the Bankruptcy Court
Gene Snyder Courthouse
601 W. Broadway, Suite 450
Louisville, KY 40202 - 2264
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How do I "file" a document with
the court?
Effective
December 1, 2004, all attorneys must file electronically. For
non-electronic filers, bankruptcy petitions, pleadings and other papers
may be submitted for filing by mail or in person at the Clerk's Office
public counters. When unusual and rare circumstances require
delivery of a document to a divisional office, a filing after hours or a
filing by facsimile, an emergency filing can be arranged by contacting
the Louisville divisional Clerk's Office during business hours.
You should prepare an additional copy of every
petition and pleading you submit. The Clerk's Office will file
stamp and return the additional copy to you. If your petition is
mailed, you must include a self-addressed, stamped envelope of
sufficient size to obtain your file stamped copy. The file stamped
copy will serve as your record that the original document was filed.
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How much are the Court fees to
file a bankruptcy?
For information regarding fees, please refer to the
Fee Schedule.
The Clerk's Office does not accept personal checks
from debtors; payments should be made by cash (correct change),
cashier's check, certified check or money order payable to "Clerk, U.S.
Bankruptcy Court." For your protection do not send cash in the
mail.
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What if I can't pay the filing
fees?
Can pay installments unless you have a
previous case that was dismissed for failure to pay filing fee.
To do so, you must complete an application to pay filing fees in
installments and submit it with your petition. To obtain a
copy of an Application to Pay the Filing Fee in Installments
click here.
An individual Chapter 7 debtor may file an
application for waiver of the filing fee along with the bankruptcy
petition. The application must conform to
Official Form 3B.
The court may waive the Chapter 7 filing fee for an individual debtor
who: (a) has income less than 150 percent of the poverty guidelines last
published by the United States Department of Health and Human Services
based on family size; and (b) is unable to pay the fee in installments.
You will have to justify your request to waive the filing fee and the
court will make a determination. If the court denies the fee
waiver application, you will be ordered to pay the fee in installments.
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What happens after I file
bankruptcy?
The court
issues a notice of bankruptcy to all creditors advising them of the
filing of the bankruptcy, the case number, information regarding actions
creditors may take, the name of the trustee assigned to the case (if
filed under Chapter 7, 12, or 13), the date set for the Section 341
Meeting of Creditors, the deadline, if any, set for filing objections to
the discharge of the debtor and/or the dischargeability of specific
debts and instructions for filing a claim.
In a Chapter 7 case involving an individual debtor,
the creditors generally have sixty (60) days from the first date set for
the meeting of creditors to object to the discharge of the debtor and/or
the dischargeability of a specific debt. If the deadline passes
without any objections to the debtor's discharge being filed and the
debtor has met all requirements for discharge, the court will issue the
discharge order. If any objections to the dischargeability of
specific debts are filed, they will be heard by the court, but will not
delay the granting of a discharge with respect to other debts. An
objection to discharge or to the dischargeability of certain debts is
considered a separate lawsuit (an adversary proceeding) within the
bankruptcy and may result in a trial presided over by the judge assigned
to the case. Corporate and partnership Chapter 7 debtors do not
receive discharges. If there are no assets from which a dividend
can be paid, the trustee will prepare a report of no distribution and
the case will be closed. If there are assets that are not exempt,
funds will be available for distribution to creditors. The court
will set a claims deadline and notify all creditors to file their
claims. The trustee will proceed to collect the assets, liquidate
them and distribute the proceeds to creditors. When the assets
have been completely administered, the trustee will prepare a final
report and final accounting and the case will be closed.
In a Chapter 13 case, creditors are given an
opportunity to object to the plan. If no objections are filed by
creditors or the trustee, the plan may be confirmed as filed. Once
the plan is confirmed, the trustee will distribute the proceeds of the
debtor's plan payments to creditors until the debtor completes the plan
or the court dismisses or converts the case. Upon completion of
the Chapter 13 Plan, the trustee will prepare a final report, the court
will issue a discharge order if the debtor has met all requirements for
discharge and the case will be closed.
In a Chapter 12 case, creditors are given an
opportunity to object to the plan. If no objections are filed by
creditors or the trustee, the plan may be confirmed as filed. Once
the plan is confirmed, the trustee will distribute the proceeds of the
debtor's plan payments to creditors until the debtor completes the plan
or the court dismisses or converts the case. Upon completion of
the Chapter 12 Plan, the trustee will prepare a final report, the court
may issue a discharge order if the debtor has met all requirements for
discharge and the case will be closed.
In a Chapter 11 case, a debtor's conference is
held with the United States Trustee's staff before the creditors
meeting. At the debtor's conference, the United States Trustee
will go over the responsibilities and restrictions on the
debtor-in-possession, explain the quarterly fees and monthly
operating reports, and generally discuss the financial situation of
the debtor and the scope of the anticipated plan of reorganization.
A disclosure statement must be filed with the plan and approved by
the court before votes for or against the plan can be solicited.
After the estate has been fully administered, the court will enter a
final decree closing the case. A Chapter 11 estate may be
considered fully administered and closed before the payments
required by the plan have been completed.
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Who has access to my case
file?
As bankruptcy cases are considered public
records, any individual or business can review your case file.
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What is a bankruptcy trustee? Who
is the United State Trustee? What is the difference?
In all Chapter 7,12,13 and in some Chapter 11 cases,
a trustee is assigned. The trustee's job is to administer the
bankruptcy estate, by making sure creditors get as much money as
possible, and to conduct the first meeting of creditors (also called the
"Section 341 Meeting" because 11 U.S.C. Section 341 of the Bankruptcy
Code requires that the meeting be held). The trustee either
collects and sells non-exempt estate property, as in a Chapter 7 case,
or collects and pays out money on a repayment plan, as in a Chapter 13
case. The trustee can require you to provide, under penalty of
perjury, information and documents, either before, during or after the
meeting of creditors. You should always cooperate with the
trustee, since failure to cooperate with the trustee could be grounds to
have your discharge denied. Trustees are not necessarily lawyers,
and they are not paid by the court. They are appointed by the
United States Trustee. Trustees report to the court, but their
fees come out of the bankruptcy filing fee or as a percentage of the
money distributed in the bankruptcy.
The United States Trustee's Office is part of the
U.S. Department of Justice and is separate from the court. The
United States Trustee's Office is a watchdog agency, charged with
monitoring all bankruptcies, appointing and supervising all trustees and
identifying fraud in bankruptcy cases. The United States Trustee's
Office cannot give you legal advice, but they can give you information
about the status of a case, and you can contact them if you are having
problems with a trustee, or if you have evidence of any fraudulent
activity.
Click here for more information about reporting suspected bankruptcy
fraud. In monitoring cases, The United States Trustee
reviews all bankruptcy petitions and pleadings filed in cases, and
participates in many proceedings affecting the case, but they do not
administer the case themselves. They can bring motions in the
bankruptcy, such as ones to dismiss the case or to deny the debtor's
discharge.
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How do I find out who the trustee
is in a case?
The trustee's
name and address is printed on the notice of the Section 341(a) Meeting
of Creditors. You also can obtain the trustee's name from the
court's automated public information systems, VCIS 502-627-5660 or
1-800-263-9385 and PACER or by calling the court at (502) 627-5700.
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What is the creditors' meeting?
What can I expect to happen at the meeting?
A "meeting of creditors" is the single hearing all
debtors must attend in any Bankruptcy proceeding. It is held outside the
presence of the judge and usually occurs between twenty one (21) and sixty
(60) days from the date the original petition is filed with the court.
In Chapter 7, Chapter 12 and Chapter 13 cases, the trustee assigned by
the court on behalf of the United States Trustee conducts the meeting.
In Chapter 11 cases where the debtor is in possession and no trustee is
assigned, a representative of the United States Trustee's office
conducts the meeting.
The meeting permits the trustee or a representative
of the United States Trustee's Office to review the debtor's petition
and schedules with the debtor face-to-face. The debtor is required
to answer questions under penalty of perjury concerning the debtor's
acts, conduct, property, liabilities, financial condition and any matter
that may affect administration of the estate or the debtor's right to
a discharge. This information enables the trustee or
representative of the United States Trustee's Office to understand the
debtor's circumstances and facilitates efficient administration of the
case. Additionally, the trustee or a representative of the United
States Trustee's Office will ask questions to ensure that the debtor
understands the positive and negative aspects of filing for bankruptcy.
The meeting is referred to as the " meeting of
creditors" because creditors are notified that they may attend and
question the debtor about the location and disposition of assets and any
other matter relevant to the administration of the case. However,
creditors rarely attend these meetings and, in general, are not
considered to have waived any of their rights by failing to appear.
The meeting usually lasts only a few minutes and may be continued if the
trustee or a representative of the United States Trustee's Office is
not satisfied with the information provided by the debtor.
If the debtor fails to appear at the meeting and/or fails to provide the
information requested at the meeting or by an Order to Produce
Documents, the trustee or a representative of the United States
Trustee's Office may request that the bankruptcy case be dismissed or
that the debtor be ordered by the court to cooperate or be held in
contempt of court for willful failure to cooperate.
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How long does it take for
creditors to be notified that a bankruptcy has been filed?
As long as the creditor was listed in the original
mailing matrix that accompanied the filing of the petition, notification
will typically be received within seven days.
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What is a discharge?
The discharge order is issued by the court and
permanently prohibits creditors from taking action to collect
dischargeable debts against the debtor personally; this does not
prevent secured creditors from seizing collateral if payments are not
kept up, or other creditors from pursuing property of the estate.
The granting of a discharge does not
automatically result in the closing of a case. All contested
matters, adversary proceedings, and appeals must be resolved and the
appointed trustee or debtor-in-possession must file a final report
and account and request entry of a final decree before the Clerk's
Office will close the case.
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What debts are dischargeable?
11 U.S.C. Section 523 lists
exceptions to discharge. In general, all other debts are
dischargeable.
Some debts listed in 11 U.S.C.
Section. 523, such as those based on fraudulent conduct,
embezzlement or willful and malicious injury to another, are
discharged unless a complaint to deny discharge of that debt is
timely filed with the bankruptcy court. Ordinarily, these
complaints must be filed within sixty (60) days of the first date
set for the meeting of creditors.
Additionally, debts that were not
listed on your bankruptcy schedules or that were incurred after you
filed bankruptcy are generally not discharged.
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What is the difference
between a denial of discharge and a debt being non-dischargeable?
Denial of a discharge applies to
the debtor's entire proceeding, while determination of non-dischargeability
applies to a particular debt only. A request for denial of
discharge is usually granted because the debtor has defrauded a
creditor, concealed property of the estate, made a false oath,
presented or used a false claim, refused to obey any lawful order of
the court and other reasons contained in the Bankruptcy Code.
On the other hand, non-dischargeability
of a debt excepts a particular debt from the discharge. This
means that if the debt is determined non-dischargeable the debtor is
still obligated to that creditor.
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How do I get a copy of my
discharge?
You will receive a copy of your
discharge in the mail after it is entered. However, if some
time has passed and you have not received your discharge or you need
another copy please call the Clerk's Office at 502-627-5700.
After filing, it is very
important that the debtor retain his/her bankruptcy papers for
future reference. Sometimes the information may be needed for
a future home purchase or other business transactions that will
require proof of filing and discharge.
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What does it mean if a case
is dismissed?
A dismissal order ends the case.
Upon dismissal the "automatic stay" ends and creditors may start to
collect debts, unless a discharge is entered before the dismissal
and is not revoked. An order of dismissal itself will not free
the debtor from any debt. Often, a case is dismissed when the debtor
fails to do something he/she must do (such as attend the creditors'
meeting, answer the trustee's questions honestly, produce books and
records that the trustee requests), or if it is in the best interest
of the creditors. Unless the debtor appeals the order or seeks
reconsideration of the order within fourteen (14) days after entry of the
order of dismissal, the Clerk may close the case.
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What is a motion?
A motion is a written formal
statement in which the party who is requesting an action, the movant,
sets forth his grounds for the action requested. The party
against whom the action is requested is the respondent. An
order granting the relief requested must be attached to each motion
filed.
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What is a reaffirmation
agreement?
A reaffirmation agreement is an
agreement by which a bankruptcy debtor becomes legally obligated to
pay all or a portion of an otherwise dischargeable debt. Such
an agreement must generally be filed within sixty (60) days after
the first date set for the meeting of creditors.
The reaffirmation agreement must
be filed on form B240. If a reaffirmation agreement is filed
without an attorney's declaration or affidavit, or creates
presumption of undue hardship, a hearing is required. You must
appear in person at the hearing. The judge will ask you
questions to determine whether the reaffirmation agreement imposes
an undue burden on you or your dependents and whether it is in your
best interest. Since reaffirmed debts are not discharged, the
bankruptcy court will normally only reaffirm secured debts where the
collateral is important to your daily activities.
Reaffirmation agreements are
strictly voluntary. They are not required by the Bankruptcy
Code or other state or federal law. You can voluntarily repay
any debt instead of signing a reaffirmation agreement, but there may
be valid reasons for wanting to reaffirm a particular debt.
Since a reaffirmation agreement
takes away some of the effectiveness of your discharge, legal
counsel is advisable before agreeing to a reaffirmation. Even if you
sign a reaffirmation agreement, you have a minimum of sixty (60)
days after the agreement is filed with the court to change your mind
or rescind. If your discharge date is more than sixty (60)
days after the agreement is filed with the court, you have until
your discharge date to change your mind. If you reaffirm a
debt and fail to make the payments as agreed, the creditor can take
action against you to recover any property that was given as
security for the loan and you may remain personally liable for any
remaining debt.
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What is a redemption?
Redemption allows an individual
debtor (not a partnership or a corporation) to keep tangible,
personal property intended primarily for personal, family, or
household use by paying the holder of a lien on the property the
amount of the allowed secured claim on the property, which typically
means the value of the property. Otherwise, in order to retain
the property, the debtor would have to pay the entire amount of the
secured creditor's debt, enter into a reaffirmation agreement and
become legally obligated on the debt again. The property
redeemed must be claimed as exempt or abandoned by the Trustee.
With redemption, a debtor can
often get liens released on personal household possessions for much
less than the underlying debt on those secured possessions.
Unless the creditor consents to periodic payments, redemption must
generally be made in one lump sum payment to the creditor.
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What are claims and claims
objections? How are claims filed?
A. Claims
In the broadest sense, a claim is
any right to payment held by a person or company against you and
your bankruptcy estate. A claim does not have to be a past due
amount but can include an anticipated sum of money which will come
due in the future. In filling out your Schedules, you should
include any past, present or future debts as potential claims.
B. Claims Objections
You may be entitled to object to
any claim filed in your bankruptcy case if you believe that the debt
is not owed or if you believe the claim misrepresents the amount or
kind of debt (e.g. secured or priority) which you owe. In some
circumstances, an objection to claim can be initiated by filing a
motion in the bankruptcy court; in other circumstances, it must be
initiated by filing an adversary proceeding (like a lawsuit in your
bankruptcy case). If you anticipate objection to claims,
you should seek the advice of an attorney as soon as possible since
the objection process can be complicated and time sensitive.
C. Filing of Claims
The written statement filed in a
bankruptcy case setting forth a creditor's claim is called a proof
of claim. The proof of claim should include a copy of the
obligation giving rise to the claim as well as evidence of the
secured status of the debt if the debt is secured. Under the
Federal Rules of Bankruptcy Procedure, with limited exceptions,
claims filed by creditors, except governmental units, in Chapter 7,
12 and 13 cases must be filed within ninety (90) days after the
first date set for the meeting of creditors. If a creditor
files a claim after the specified deadline, you may object to the
claim as being untimely filed.
For purposes of obtaining your
discharge, it may be important for you to file a claim on behalf of
a creditor if that creditor should fail to do so. Under the
Federal Rules of Bankruptcy Procedure, you (or in Chapter 7 and some
11 cases, the trustee) may file a proof of claim on behalf of a
creditor within thirty (30) days after the last day for filing
claims.
Proof of
Claim form
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What can I do if a creditor
keeps trying to collect money after I have filed bankruptcy?
If a creditor continues to
attempt to collect a debt after the bankruptcy is filed, the
creditor may be in violation of the automatic stay. You should
immediately notify the creditor in writing that you have filed
bankruptcy and provide them with either the case number and filing
date, or a copy of the petition that shows it was filed. If
the creditor still continues to try to collect, the debtor may be
entitled to take legal action against the creditor to obtain a
specific order from the court prohibiting the creditor from taking
further collection action and, if the creditor is willfully
violating the automatic stay, the court can hold the creditor in
contempt of court and punish the creditor. Any such legal
action brought against the creditor will be complex and will
normally require representation by a qualified bankruptcy attorney.
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How do I change or correct
information in the petition, schedules and statements I already
filed with the clerk's office?
The information contained in your
petition, schedules, and statement of affairs is submitted under
penalty of perjury. Therefore, you must be certain that it is
correct when you sign these documents. If, however, you later
discover that something is inaccurate or missing, the documents may
be corrected by the filing of an amendment with the Clerk's Office.
A
fee must be paid to
amend schedules D, E or F. The amendment should be made
using
Local Form B,
which is contained in the Local Bankruptcy Rules for the Western
District of Kentucky. All amendments must be served upon the
United States Trustee and case trustee, and certain amendments must
be served upon the creditors affected by the amendment.
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What should I do if I cannot
make my Chapter 13 payment?
If the debtor cannot make a
Chapter 13 payment on time according to the terms of the confirmed
plan, the debtor should contact his or her attorney or the trustee
by phone and by letter advising of the problem and whether it is
temporary or permanent. Significant changes in the debtor's
circumstances may require that the plan be formally modified.
If the problem is permanent and the debtor is no longer able to make
payments to the plan, the trustee will request that the case be
dismissed or converted to another chapter. The determination
of whether to modify, dismiss or convert a case requires the same
kind of analysis as is needed for the initial decision whether to
file bankruptcy and under what chapter. Therefore, the debtor
should seek counsel from a qualified bankruptcy attorney before
attempting to make such a decision. If the debtor delays
making a voluntary decision and cannot make the plan payments, the
court may dismiss the case.
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My ex-spouse has filed
bankruptcy. He/she has listed me as a co-signer on a scheduled
debt. What can I do? Does my divorce decree protect me?
If you are a co-obligor with your
ex-spouse on a debt, the creditor can require the entire payment of
that debt from your share of the community property even though the
divorce decree assigns the debt to your ex-spouse. Depending
on the terms of your divorce decree, you may be able to have certain
support obligations under it determined to be non-dischargeable by
the bankruptcy court or in state court. You should seek legal
advice for a thorough explanation of your rights and obligations in
this area as soon as you find out that your ex-spouse has filed for
bankruptcy.
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How many years will a
bankruptcy show on my credit report? How long will it take
before I can get credit?
The bankruptcy petition,
schedules and plan are public documents and are available to the
general public for viewing. Credit reporting agencies
regularly collect information from the petitions filed and report
the information on their credit reporting services.
Bankruptcies normally will remain on your credit report for up to
ten (10) years and may be taken into consideration by any person
reviewing a credit report for the purpose of extending credit in the
future. The decision whether to grant you credit in the future
is strictly up to the creditor and varies from creditor to creditor
depending on the type of credit requested.
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How do I get the bankruptcy
removed from my credit report?
The bankruptcy court has no
jurisdiction over credit reporting agencies. The Fair Credit
Reporting Act, 6 U.S.C. Section 605, is the law that controls credit
reporting agencies. The law states that credit reporting
agencies may not report a bankruptcy case on a person's credit
report after ten years from the date the bankruptcy case is filed.
Other bad credit information is removed after seven years. The
larger credit reporting agencies belong to an organization called
the Associated Credit Bureaus. The policy of the Associated
Credit Bureaus is to remove Chapter 11 and Chapter 13 cases from the
credit report after seven years to encourage debtors to file under
these chapters.
The three main credit Reporting
Agencies are:
You may contact the Federal Trade
Commission, Bureau of Consumer Protection, Education Division,
Washington, D.C. 20580. The telephone number is (202) 326-2222
or at www.ftc.gov.
The office can provide further information on re-establishing credit
and addressing credit problems. For information on credit
practices, contact (202) 326-3324.
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What is a Disclosure
Statement in a Chapter 11?
The Disclosure Statement is a
document which provides a profile of the corporation, financial
information and an overview of the proposed Plan of Reorganization.
This information is useful to creditors in deciding whether to
accept or reject the proposed Plan of Reorganization.
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What is a Plan of
Reorganization in a Chapter 11?
The Plan of Reorganization is a
document that sets out how a debtor-in-possession will repay
creditors. The plan divides creditors into classes. It
specifies the treatment of claims for each class of creditor and
provides a means for the plan's implementation. The
debtor-in-possession has the exclusive right to file a plan for up
to 120 days after the filing of the petition. After this
exclusivity period has expired, creditors may file a plan.
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I am a creditor in a Chapter
11 case and the Plan of Reorganization has been approved. Can
the Clerk's Office explain to me why I have not yet received any
payments and when will payments commence?
All questions regarding payments
under a confirmed plan should be directed to the attorney for the
Debtor-in-Possession or trustee if one has been appointed.
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I am a creditor in an asset
case. How long before I can expect a dividend payment?
The court cannot answer this
question. It is dependent upon the length of time it takes the
trustee to liquidate the assets in a case. There are times
when liquidation involves lengthy and complex litigation.
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I have received a notice and summary of the
Trustee's Final Report and Account in a Chapter 7 case. How
long will it be before I receive payment on my claim?
Once the Notice and Summary of
the Trustee's Final Report and Account has been sent to all
creditors, it takes approximately 6 to 8 weeks before the money is
distributed to creditors. If an objection is filed to the
Final Report and Account, a hearing may be scheduled. Should
this occur, the monies in a case cannot be distributed until the
matter has been resolved.
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I am a creditor in a case that has converted
to another chapter. Is it necessary for me to file another
Proof of Claim?
No. Once you have filed a
Proof of Claim with the court, it is recorded on a claims
register and is considered part of the case regardless of conversion
to another chapter.
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How do I get copies of
documents or certified copies?
Copies of documents and certified
copies are available at the Clerk's Office in the Louisville
division. There is a cost for photocopying a paper document or
printing a document from the court's Electronic Case Files system.
There is an additional fee
for a certification.
Click here for
information regarding these fees.
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What do I do if someone in
bankruptcy owes me money?
If you are a creditor in an asset
case you should receive a claim form and a notice setting a deadline
to file the claim.
Proof of
Claim forms
are also available from this web site. File the original claim and
copies of any supporting documents at the Clerk's Office. If
you wish to have a copy returned to you, please enclose an extra
copy of the claim, and a self-addressed stamped envelope.
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Who do I notify about a
possible fraudulent filing?
The Office of the United States
Trustee reviews complaints about possible fraudulent filings and, if
appropriate, notifies the U.S. Attorney for further investigation.
For more information on this topic
click here or contact:
Office of the U.S. Trustee
United States Courthouse
601 West Broadway, Suite 512
Louisville, KY 40202
(502)582-6000
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I received a notice that my case is being
audited. What does that mean?
Beginning with cases filed on or after 10/20/2006, Chapter 7 and Chapter
13 cases will be randomly selected for audit. These audits will be
focused on determining the accuracy, veracity and completeness of the
petition, schedules and other information provided by the debtor.
If you are a debtor and receive notice that your
case is being audited, you and/or your attorney will be asked to provide
additional documents as needed. After receiving and reviewing all
documents, the auditor will file a report with the Court.
For more information regarding debtor audits,
please refer to the
U.S. Trustee’s Debtor Audits Information Page.
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How do I get my driver's
license back?
You must contact the county or city district
court in which the judgment was obtained for further information.
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Can I speak with the Judge in
my bankruptcy case?
No. Federal law prohibits any contact
with the Judge outside of the courtroom in order to preserve the
impartiality of the Court and to prevent the appearance of any
impropriety of preferential treatment of any party.
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Where can I get a copy of the
Federal Rules of Bankruptcy Procedure, Local Bankruptcy Rules, etc?
Copies of the Federal Rules can
be obtained from your local law library or the internet. The
Local Rules for the Western District of Kentucky can be found under
the
Local Rules
section of the this website.
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Where can I get information
on credit counseling?
Please view the BAPCPA section on
this web site.
Click here.
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Where can I get information
on Statement of Current Monthly Income and Means Testing?
Please view the BAPCPA section on
this web site.
Click here.
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