Required Bankruptcy Disclosures #1

BAPCPA REQUIRED NOTICE NO 3. (§342(b)(2) of the Bankruptcy Code)



If you decide to file bankruptcy, it is important that you understand the following:


  1. Some or all of the information you provide in connection with your bankruptcy will be filed with the bankruptcy

court on forms or documents that you will be required to sign and declare as true under penalty of perjury.

  1. A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of

perjury in connection with a bankruptcy case shall be subject to fine, imprisonment, or both.

  1. All information you provide in connection with your bankruptcy case is subject to examination by the Attorney



Types of Bankruptcy


The Bankruptcy Code is divided into chapters. The chapters that usually apply to consumers are Chapter 7, where most of all of your debt is wiped out, and Chapter 13, which involves a repayment plan.


In most cases, once you file your case, the “Automatic Stay” immediately goes into effect. The Automatic Stay means that a bankruptcy filing automatically stops, or stays, and brings to a halt most lawsuits, repossessions, foreclosures, evictions, garnishments, attachments, utility shut-offs, and debt collection harassment. Generally, creditors cannot take any further action against you or your property without permission from the Bankruptcy Court.


Chapter 7. Chapter 7 is designed for people who are having financial difficulties and are not able to re-pay their debts.


Under the changes to the Bankruptcy Code that took effect October 17, 2005, you can usually qualify for a Chapter 7 if your average gross monthly income for the last six months is below your state’s Median Income, your gross income less certain expenses is below your state’s Median Income, or you can show “special circumstances” that would allow you to qualify for Chapter 7. The filing fee for Chapter 7 is $335.00.


Under Chapter 7, you can usually exempt, or keep, most or all of your assets under Federal law. Most retirement accounts and pensions are also exempt. With secured property such as your home or car, you are allowed to exempt up to a specific dollar amount in equity, in which case you can keep it as well. The trustee liquidates most non-exempt property and uses the proceeds to pay your creditors according to priorities of the Bankruptcy Code.


Once your Chapter 7 case is over, you receive a Discharge Notice from the Court. The discharge prevents your creditors from taking any steps to try to collect their unsecured debt. They cannot call you, write you, sue you, or take any steps that could be considered an attempt to collect its debt. If you want to keep property that has a lien on it, you must keep your payments current, and may be required to reaffirm your debt. Some debts cannot be discharged. Typical examples are child support, alimony, and other domestic support obligations, some taxes, student loans, criminal restitution, and debts for death or personal injury caused by operating vehicles while intoxicated with alcohol or drugs.


Chapter 13. Chapter 13 is a valuable tool that lets you catch up overdue mortgage or car payments, taxes and domestic support obligations. It also applies where you have the ability to repay some or all of your debts over time. You must have less than $360,475.00 in unsecured debt (such as credit cards and doctor’s bills) and less than $1,081,400.00 in secured debt (such as mortgages and car loans) to qualify for Chapter 13. The filing fee for a Chapter 13 is $310.00. Under Chapter 13, you keep all of your property, both exempt and non-exempt, as long as you resume making your regular payments on secured debt and keep current under the repayment plan that you propose. A repayment plan can last for us to five years. After finishing your payments, most of your unsecured debts are discharged.


Chapter 11. Chapter 11 is designed primarily for business reorganization, but is also available to consumer debtors.

Its provisions are quite complex. In the vase majority of cases, Chapter 11 is unnecessary and too expensive for most consumer debtors. The filing fee for Chapter 11 is $1,550.00.


Chapter 12. Chapter 12 lets family farmers repay their debts over a period of time. And is in many ways similar to a Chapter 13. The filing fee for Chapter 12 is $275.00.


Credit Counseling. Reputable credit counselors can advise you on managing your money and your debts. They may also be able to develop a plan to repay your debts. Unfortunately, many credit counselors are not reputable and charge high fees and contributions that will cause you to fall deeper into debt and damage your credit rating. Furthermore, many misrepresent their non-profit status and/or their affiliations with religious or charitable organizations, and are little more than collection agents for the credit card companies.*


Under the changes to the Bankruptcy Code that took effect October 17, 2005, you are required to take two short credit counseling courses, one before you file bankruptcy, and one after you have filed. We will refer you to a reputable credit counselor what has been approved by the United States Trustee Department for these courses.


*In the opinion of the Conner Law Firm, credit counseling companies routinely engage in the unlicensed practice of law, and, in many cases, do more harm to debtors seeking relief than good.   Attorney Jeff Conner generally does not recommend engaging in debt counseling through any debt-counseling agency. However, Federal law now requires that the Conner Law Firm send you to a credit-counseling agency. Make no mistake in that our sending you to see a credit-counseling agency is in no way, shape or form intended to be an endorsement of any credit counseling agency and/or what they do. Attorney Jeff Conner does not recommend debt management and/or credit counseling.

Read Bankruptcy Required Notice #2 here