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After
you file chapter 7 bankruptcy The Automatic Stay. The
automatic stay acts like a shield between you and your
creditors by prohibiting the commencement or
continuation of creditors’ judicial proceedings against
you as well as all collection efforts. The automatic
stay begins begins the moment your bankruptcy petition
is filed.
Limits on Automatic Stay in
Subsequent Bankruptcy. If you file a bankruptcy
petition under Chapter 7 or Chapter 13 within one (1)
year of the dismissal of an earlier case, the automatic
stay in the second case terminates thirty (30) days
after the second bankruptcy unless you demonstrate that
the second bankruptcy was filed in good faith with
respect to the creditor sought to be stayed. A second
repeat bankruptcy filing within the same one (1) year
period will not effect the automatic stay.
Trustee Meeting After Filing the Petition.
Notice of Meeting of Creditors. When the petition is
filed, a combined Order Scheduling a Meeting of
Creditors and Fixing Filing Dates for Claims, Complaints
Objecting to Discharge, and Complaints Seeking Exception
to Discharge will be sent by the Court to all creditors,
to you, and to our office. This is commonly referred to
as the “341 Notice” or the “Creditor Meeting Notice.”
You should receive this Notice from the bankruptcy court
approximately ten (10) days after your petition is
filed.
What
is a Trustee and What Does He/She Do? The
“Bankrupt Estate” consists of all legal and equitable
interests you have in property as of the date the case
is filed. In Chapter 7 one primary job of the Trustee is
to gather all of your non-exempt assets, sell those
assets, and distribute the proceeds among all your
unsecured creditors. A Trustee is randomly appointed by
the Court immediately upon the filing of a Chapter 7
petition. The Trustee is usually a private attorney and
is compensated primarily by a percentage of the
non-exempt assets he or she is able to collect and
distribute to your creditors.
Meeting with Trustee.
The
meeting with your Chapter 7 trustee (the “creditors
meeting” or “341 meeting”) is held in a conference room,
not the courtroom, and the federal bankruptcy judge is
prohibited by law from being there. Typically this
meeting will last about five minutes.
Who attends? You are required
to attend the creditors meeting with the bankruptcy
trustee (if filing jointly, both husband and wife must
attend). Your bankruptcy attorney will accompany you and
represent you at the meeting. As a practical matter very
few, if any, unsecured creditors attend.
What Happens at the Creditors
Meeting? The Chapter 7 Bankruptcy Trustee
will ask you questions, but will not interrogate you,
cross-examine you, or threaten you. Typical
questions include:
Why are you filing bankruptcy?
Do you have a pending lawsuit or settlement?
Are you expecting a tax refund or inheritance?
Did you make extra payments to any creditors?
Did you transfer any property into someone else's name?
Did you list all of your assets and debts?
Tax Returns. The new
bankruptcy law gives the Chapter 7 Trustee (or the
Judge) the right to verify information about your income
by reviewing copies of your income tax returns. Upon
request of the court, the Chapter 7 Trustee (or the US
Trustee) may request that you file a copy of your
federal tax return (or a tax transcript) for the tax
year ending during the time the case is pending and/or
for the three years prior to the filing of the petition.
OTHER THINGS THAT HAPPEN AFTER FILING
Suggestion of Bankruptcy.
This is a two page fill in the blank document that is filed
with the civil court (usually county court or small
claims court) if you are being sued. It tells the
court you filed bankruptcy and that you are
under the protection of the bankruptcy court and ensures
a judgment is not entered against you.
Relief
from Stay. This is a legal document creditors
file that asks the bankruptcy court if they can continue
legal proceedings against you. This must be
responded to IMMEDIATELY by an attorney to stop whatever
action the creditor is trying to take against you.
Transferring Property After
Filing.
Immediately upon the filing of a bankruptcy petition, a
legal “estate” is created by the law which consists of
everything you own at the time you filed bankruptcy.
This is called the “bankruptcy estate.” In fact, one of
the Trustee’s principal duties is to collect the
bankruptcy estate (that is, locate and assume
jurisdiction over all the property). You should never
sell, give away, or transfer any of your real or
personal property which is part of your bankruptcy
estate either immediately before or after the filing of
your petition without checking with your bankruptcy
trustee.
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