Bankruptcy FAQ's
 
DISCLAIMER: The following information should not be relied upon as legal authority nor should it be used as a substitute for reference to the U.S. Bankruptcy Code. Finally, this information should supplement, not substitute, for the advice of competent legal counsel. Please be advised that the Clerk’s Office staff is prohibited from giving legal advice. For additional information, please refer to the United States Bankruptcy Code (title 11, United States Code), the Federal Rules of Bankruptcy Procedure (Bankruptcy Rules), and the Local Rules for the United States Bankruptcy Court for the Western District of Kentucky.

 

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What is bankruptcy?

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What is the automatic stay?

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Who can start a bankruptcy?

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What is a joint petition?

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What are the different "chapters" in bankruptcy?

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Which chapter is right for me?

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Where can I get more information concerning bankruptcy and bankruptcy procedures?

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Do I need an attorney to file bankruptcy?

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What is a Pro Se Debtor?

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Can the Clerk's Office give legal advice?

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What does the Clerk's Office do?

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What documents do I need to start a bankruptcy?

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Where can I obtain petition forms?

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Can the Clerk's Office help me fill out my 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?

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What are exemptions?

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Where do I file my bankruptcy case?

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How do I "file" a document with the Court?

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How much are the Court fees to file a bankruptcy?

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What if I can't pay the filing fees?

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What happens after I file bankruptcy?

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Who has access to my case file?

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What is a bankruptcy trustee? Who is the United State Trustee? What is the difference?

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How do I find out who is the trustee in a case?

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What is the creditors' meeting?  What can I expect to happen at the meeting?

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How long does it take for creditors to be notified that a bankruptcy has been filed?

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What is a discharge?

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What debts are dischargeable?

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What is the difference between a denial of discharge and a debt being non-dischargeable?

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How do I get a copy of my discharge?

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What does it mean if a case is dismissed?

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What is a motion?

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What is a reaffirmation agreement?

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What is a redemption?

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What are claims and claims objections?  How are claims filed?

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What can I do if a creditor keeps trying to collect money after I have filed bankruptcy?

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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?

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What should I do if I cannot make my Chapter 13 payment?

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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?

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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?

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How do I get the bankruptcy removed from my credit report?

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What is a Disclosure Statement?

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What is a Plan of Reorganization in a Chapter 11?

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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?

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I am a creditor in an asset case.  How long before I can expect a dividend payment?

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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?

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I am a creditor in a case that converted to another chapter.  Is it necessary for me to file another Proof of Claim?

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How do I get copies of documents or certified copies?

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What do I do if someone in bankruptcy owes me money?

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Who do I notify about a possible fraudulent filing?

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I received a notice that my case is being audited. What does that mean?

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How do I get my driver's license back?

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Can I speak with the Judge in my bankruptcy case?

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Where can I get a copy of the Federal Rules of Bankruptcy Procedure, Local Bankruptcy Rules, etc?

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Where can I get information of credit counseling?

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Where can I get information on Statement of Current Monthly Income and means testing?

 

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.  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, 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 or 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, objection to exemption deadlines, if applicable, 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.   McVCIS allows a caller to access basic case information from any touch-tone telephone at any time by dialing 866-222-8029.  Enter 59 for the state abbreviation code for KY, then 1 for the Western District of Kentucky. There is no fee charged with this service. Local calls within the Louisville area may be placed by dialing (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 may be required 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 legal advice 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:

Experian
Profile Maintenance
P.O. Box 9558
Allen, TX  75013
Equifax
P.O. Box 740241
Atlanta, GA  30374
 
Trans Union Corporation
Attn:  Public Records Dept.
555 West Adams Street
Chicago, IL  60661

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 visit the U.S. Trustee's web site. Click here.

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Where can I get information on Statement of Current Monthly Income and Means Testing?

Please visit the U.S. Trustee's web site. Click here.

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This page was last edited on 03/07/2013 at 02:59 PM .