What these classes actually do is simple, however: they cost you a little more money, and they comprise one more hoop to jump through on your way to achieving a legal discharge of your debts through bankruptcy. They will waste a little of your time and, most likely, provide little to no information to you that is actually in any way useful. What I tell my clients in the Detroit, Michigan area when they ask me what they will hear in the bankruptcy course is that they will hear the sorts of things that Congressmen and Senators of a certain political inclination to believe that anyone who files bankruptcy is somehow immoral or cheating the system thinks that people of that sort ought to hear. In other words, obviousness peppered with a little condescension.

The classes usually only take 20-30 minutes of your time (although I have had a couple of clients report that the post-filing debtor education course took them up to 1.5 hours), and the high end of the costs for the classes is around $50 each. It is not a terrible burden. There are a number of companies that provide these courses, and some of them are better than others in that they quickly provide the certificate of completion to the participants’ attorneys and in that they are more or less likely to provide pseudo-legal advice to participants that is more rightfully delivered by actual attorneys. Many attorneys recommend one provider over another, as I do myself, but, always, you are free to choose your own provider, so long as the certificates of completion are delivered to your attorney in a timely manner.

None of my clients have reported actually enjoying these courses, and I don’t blame them. I do hear a healthy amount of complaining about the requirement, especially from those who have filed for bankruptcy before, prior to 2005—but a requirement it is. It is best to understand beforehand that this is one of the requirements of current bankruptcy law and to just get it over with with a reasonable amount of good humor and courtesy to the company providing the course.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

Other times, leaving a creditor off of a listing is just a matter of simple error. No big deal. It happens. I try to avoid such error with my clients by working with them to obtain their latest credit report prior to filing their petitions. Most of the time, this nets all of the creditors swimming around them, and it will usually ensure that at least the original debts owed by my clients are successfully listed in the petition, even if a debt happens to have been recently sold off to some random collection agency.

So long as the error or omission is caught early enough in the roughly 4 month bankruptcy process, it is a simple matter to add a missed or missing creditor to a filed petition. The court charges a $23 fee for such amendments, but it is worth the cost. Although, in a Chapter 7, a non-listed debt will still be discharged, if the creditor has a claim against the debtor for fraud, theft, some willful or malicious act against the filing debtor, or if the creditor would have received funds from the filing debtor’s bankruptcy estate if they had been listed, that debt may not be discharged.

Additionally, it goes without saying that all debts and creditors must be disclosed. When you file a bankruptcy petition, your signature on the petition in several places indicates that you have completely and accurately disclosed all of your assets and liabilities. At the 341 Meeting of Creditors, about halfway through the bankruptcy process, you likewise will swear under oath that you have completely disclosed all of your assets and liabilities. A missing creditor that you are aware of or should have been aware of means that this cannot be true.

It is, thus, very important to work closely—and patiently—with your attorney when filing bankruptcy to ensure that all of the necessary information (especially creditors!) gets included. If your attorney works as I and most other bankruptcy attorneys that I am acquainted with do, you will be required to fill out a lengthy questionnaire at the beginning of your bankruptcy process from which your attorney will create your bankruptcy petition. It is not fun to fill out these questionnaires, but it is extremely necessary. Bankruptcy, like every legal process, is only worth doing if it is done right. It is always worth taking the time and effort up front to ensure that your bankruptcy filing is completely accurate in every way.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

The question I want to address here, in my first post of the year, is an extremely basic question but one which has been popping up a lot recently. Perhaps because of the economic climate, many of the potential clients I’ve spoken to have asked me about the possibility of leaving one debt or another off of the petition, such as a personal loan from a family-member or friend, or even a debt to a trusted doctor whose services they wish to continue using during and after the bankruptcy.

Unfortunately, the answer to the question is rather quick and easy from my point-of-view: no, you cannot knowingly exclude a debt from your bankruptcy petition. All known debts with a greater-than-zero balance must be listed and, in a Chapter 7, therefore discharged.  Failure to list all of your debts may result in your petition being dismissed entirely or in criminal fraud charges.

If you accidentally leave a debt off of the petition, it is a simple matter to amend the petition to include it prior to receiving your discharge. The court charges a small amount for amendments which add a creditor to your petition, however, the cost of which your attorney may pass back to you. If the debt is not listed but your discharge is granted with no assets to distribute to creditors (i.e., yours was a “no-asset” case), the debt is discharged regardless of not having been listed.

Needless to say, the best policy is to forget nothing and omit nothing and to never have to make such an amendment in the first place. Working patiently with your bankruptcy attorney, who cannot know anything about your financial state of affairs that you don’t tell him or her, is a must. Remember, although it can be aggravating to comb through your personal papers for what is needed to compile a bankruptcy petition completely and accurately, your attorney is there to help you, and it will all be worth it in the end when each of those debts is finally discharged.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

A Chapter 7 bankruptcy, in general, takes about 4 months from the filing of the petition to the receipt of the discharge. That is the official process, however, and does not take into consideration the amount of time the collection of the necessary information and documentation by the filing debtor and his or her attorney requires up front. That up-front time aside, which can take anywhere from a handful of days to a few weeks, depending upon the level of organization and the assets and liabilities in question of each client. The “official process,” however, begins when the debtor’s attorney has utilized all of that collected documentation to draft the bankruptcy petition. When that petition is filed with the court, it sets into place the Automatic Stay against creditors’ collection attempts. This means that, beginning in the exact moment of the petition’s filing, creditors may no longer call with harassing collection phone-calls, send invoices or other mailings, pursue or collect garnishments, or repossess or foreclose on property. This Automatic Stay remains in place for the entire length of the bankruptcy proceeding.

After the petition is filed, what is usually the one-and-only “court date” for a Chapter 7 debtor is scheduled. This is the “341 Meeting of Creditors,” named after the section of the Bankruptcy Code (Sec. 341) which allows for the meeting. This meeting, which is held, generally, at the Federal Bankruptcy Court in your district (in my own Eastern District of Michigan, Southern Division, it is held on the 3rd floor of the Bankruptcy Court at 211 W. Fort St. in downtown Detroit), is generally very short. Typically, the filing debtor simply meets briefly with the Bankruptcy Trustee overseeing the case and not with a judge at all. The Trustee will ask the debtor to verify his or her identity by producing a Social Security Card and Driver’s License and will then ask the debtor any questions he or she has about the petition. The 341 Meeting is generally an opportunity for creditors to make an appearance on the record and ask questions regarding the debt. For most Chapter 7 debtors, creditors generally do not appear, though it does happen. Once this meeting is concluded, there is a mandatory 60-day waiting period before the discharge is granted. This is, again, an opportunity for creditors to challenge the discharge. Provided that none do, the discharge is granted at the end of the 60 days. If the discharge is granted, all of the petitioners’ debts are discharged and need, then, not be paid. If, for any reason, a discharge is not granted, it is after this 60-day period that the Automatic Stay is lifted and creditors may again renew collection efforts.

Any challenge of any sort at any point along this timeline can complicate it significantly, but, by and large, this is the timeline that most Chapter 7 debtors can expect, particularly those who do not own real estate or other secured property more likely to be pursued by creditors than other personal possessions are.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.