Tag Archives: debtor

Your Meeting of Creditors….Don’t be Intimidated

 

When you file for bankruptcy protection, you are required to attend a meeting of creditors. This meeting is required by 11 USC §341, so it is also commonly referred to as the “341 meeting.” It is normal to feel nervous about attending this meeting. For guidance on what generally occurs at the 341 meeting, please read our blog titled “The “Meeting of Creditors” in Bankruptcy.”

mtg of creditors pic

Meeting of Creditors

The reality is that you should look forward to attending your meeting of creditors. Consider the following:

  • In a typical personal bankruptcy case, the 341 meeting does not last long. In fact, most debtors answer routine questions asked by the trustee assigned to the case that takes approximately 10 minutes. It may take longer for you to have your case called than it does for you to actually answer questions!
  • It is common for very few, if any, creditors to attend the 341 meeting. Even though the meeting is designed to allow the trustee and your creditors to ask you questions under oath, the more sophisticated creditors understand how their debt will be treated in your filing. Thus, they do not spend the time or money to attend the hearing. If you should have creditors attend, your attorney is there to assist you.
  • An experienced bankruptcy attorney has handled hundreds of meetings of creditors. Thus, he or she will likely have anticipated any issues that may arise. It is our practice to ensure that you are fully prepared for your 341 meeting and that you know what to expect in advance.
  • Most debtors only have to attend one meeting of creditors. Thus, once your 341 meeting is over, you probably do not have to go back to the courthouse for the remainder of your case. You can sit back and wait to receive your discharge order.

Most of our clients tell us that their meeting of creditors was “no big deal” or much easier than they had expected. Don’t waste time stressing over your 341 meeting and have the peace of mind that your bankruptcy lawyer will ensure that you are prepared.

Contact a Brevard County Bankruptcy Attorney

If you have questions about filing for bankruptcy protection, we have the answers. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the Brevard County and Space Coast area.


Clarifying the Chapter 7 Means Test

Amendments to the Bankruptcy Code were made in 2005 and one of the most significant additions to the law was the requirement of a debtor to pass the “means test” to be eligible to file a Chapter 7 bankruptcy. The means test is a calculation used by the bankruptcy courts to verify that a debtor is not abusing the bankruptcy system to discharge debts he/she can afford to pay.

Chapter 7 Means Test | Brevard County Bankruptcy Attorney

If you pass the means test, you qualify to file a Chapter 7 case. If you do not pass the test, the court assigns a “presumption of abuse” designation. This means that in order to continue with your Chapter 7 filing, you must provide evidence to overcome this designation. In other words, you must prove to the court that although you failed the means test, you are not abusing the system and you still qualify for Chapter 7 relief. The state median income figures can be viewed at the U.S. Trustee’s website:http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm.

There are certain individuals that are not required to pass the means test. For example, the means test does not apply to disabled veterans who incurred the debt while on active duty or if your debts are primarily business debts. You automatically “pass” the means test if your income is below the median for your state. Many individuals seeking Chapter 7 relief qualify based solely on their income level.

If your income exceeds your state’s median income, you are allowed to deduct numerous expenses from your income. For example, you can deduct your living expenses. When all of the deductions have been made, the remaining amount is multiplied by sixty. If the amount that is remaining indicates that you have the ability to pay a significant portion of your unsecured debt, the court will presume your filing is an abuse of the system. An experienced bankruptcy attorney can assist you with claiming all of your available deductions in order to improve your chances of passing the means test and also help you determine if a Chapter 13 filing would be beneficial to you.

You have the ability to challenge a presumption of abuse designation. You have the burden of proof in establishing special circumstances that warrant the court allowing you to file a Chapter 7 case. If you have questions regarding filing a Chapter 7 bankruptcy or other ways we can help you, contact us for a free consultation.


The “Meeting of Creditors” in Bankruptcy

Atty mtg

Pursuant to 11 U.S.C. §341, whether you file a Chapter 7, 11 or 13 bankruptcy case, you are required to attend a meeting of creditors. The meeting of creditors is a time for the trustee and your creditors to ask you questions regarding your finances. It is also commonly called the “341 meeting” and it is typically scheduled about 40 days from your petition date. Failure to attend the meeting of creditors can result in your case being dismissed.

Common Questions Asked

The trustee often asks each debtor a variety of questions regarding his/her income, debts and assets. Below are a few examples of questions you may be asked at your 341 meeting:

  • Have you reviewed your bankruptcy petition and schedules?
  • Where are you currently employed?
  • Where do you live?
  • Do you expect a windfall (such as an inheritance, lawsuit, etc.) anytime soon?
  • Have you listed all of your assets and debts in your pleadings?
  • Have you transferred any assets within the last two years?

General Tips

seasoned bankruptcy lawyer will help you prepare for your 341 meeting, but below are some general tips:

  • Arrive at your meeting early so you have plenty of time to proceed through the security line. Dress can be casual, but it should be appropriate attire for a court appearance.
  • Make sure you bring the paperwork requested by your attorney and the trustee. Every trustee in Florida’s Middle District requires a valid government issued identification, and proof of your social security number. Proof of your social security number can be your social security card, a medicare card (with your social security number printed on it), an employer-issued W-2, or a 1099. Your tax return will not prove your social security number because you prepare your tax return. If you fail to bring either, the trustee will make you go get them and return either that day or the next time that trustee holds 341 meetings. Examples of additional documents you may be asked to provide include bank statements, tax returns, and payroll statements. If you do not bring documents requested by the trustee, it could result in your hearing being postponed to a later date.
  • The most important tip is to answer all questions to the best of your ability and to be honest.

In most cases, creditors do not attend the meeting of creditors. However, if you have a creditor attend and start asking questions, it is very helpful to have a knowledgeable bankruptcy attorney by your side. Contact us today for a free initial consultation!

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

Understanding the “Meeting of Creditors”

All debtors are required to attend a meeting of creditors, as required by Section 341 of the Bankruptcy Code. It is normal for you to feel nervous about appearing before the trustee and your creditors to answer questions under oath about your finances, but a seasoned bankruptcy attorney will make sure you are fully prepared and walk you through each step of the process. Below are a few helpful tips for getting prepared for your meeting of creditors:

Financial Records

As your bankruptcy lawyer, we will provide you with a list of the documents you must bring to the meeting of creditors. Examples of the paperwork you will need to provide to the trustee include:

  • Driver’s license (or other government from of ID) and social security card
  • Proof of mortgage on home
  • Title and liens on all vehicles (autos, motorcycles, boats, motor homes, 4-wheelers, tractors, etc.)
  • Bank statements
  • Pay stubs

The trustee assigned to administer your case may also provide you with a list of records to bring. Failure to provide the requested documents could result in your meeting of creditors being postponed to a later date. Continued failure to provide the records could result in your case being dismissed.

Questions You May be Asked

The meeting of creditors is a time for the trustee (and any creditors who appear) to ask questions and make sure the court has a full understanding of your financial situation. Below are examples of questions commonly asked:

  • Have you reviewed your bankruptcy pleadings? Is everything correct?
  • Did you list ALL of your assets and your debts?
  • Do you expect any kind of windfall (like an inheritance) in the near future?
  • Do you have any claims against anyone (like a lawsuit)?
  • Confirm your current address
  • Do you own any real property other than your home?

The most important piece of advice is to tell the truth. If you have concerns regarding any of your assets or debts, be sure to discuss it with your lawyer before your meeting of creditors.

If you are considering filing for bankruptcy, contact our office for a free consultation with attorneys who help you get a fresh and fair start.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

How Will Bankruptcy Impact My Credit Score?

If you are considering filing an individual Chapter 7 or Chapter 13 case, it is important to understand all of the pros and cons associated with bankruptcy. One of the primary concerns debtors have is how it will impact their credit score. The answer differs for each person, since no two situations are identical. However, for many individuals, their history of past due payments, repossessions or lawsuits have already negatively impacted their credit score. As a result, the bankruptcy filing does not have a huge effect, especially when compared to the benefit of eliminating debt and getting your finances back on track.

A Chapter 7 and a Chapter 13 filing effect your credit score differently. A Chapter 7 will remain on your credit report for 10 years from the date you file. A Chapter 13 filing remains on your report for only seven years from the time you file. The reason Chapter 13 is removed from your report sooner is because a Chapter 13 debtor repays a portion of what is owed to his/her creditors. Thus, the Chapter 13 debtor’s credit score is not as negatively affected by the filing as a Chapter 7 debtor’s score.

It is important to understand that in both types of cases, the longer you have been out of bankruptcy, the lower the impact of the filing on your credit score. Additionally, while a Chapter 7 notation remains on your credit report longer, it also allows you to eliminate more debt in a quicker amount of time. A typical Chapter 7 case lasts four to six months while a Chapter 13 case lasts three to five years. Thus, a Chapter 7 debtor receives a discharge of debt sooner and can start rebuilding his/her credit quicker.

For help understanding the pros and cons of filing a personal bankruptcy, contact our office for a free initial consultation. Office located in Melbourne, Florida.


Understanding Preferential Transfers in Bankruptcy

Cash Gift

If your company is considering filing bankruptcy and you deal with several vendors, it is important to understand what is meant by the term “preferential transfer.” A preferential transfer is a payment (in money, goods or other) that is made to a creditor within the 90 days preceding the filing of the bankruptcy petition that results in that creditor receiving more than it otherwise should have. The result is that the creditor was “preferred” over other similarly-situated creditors.

What happens if a preference occurs?

If a preferential payment is made, the trustee has the ability to recover the money or goods in order to administer them as part of your bankruptcy estate for the benefit of all the creditors. This can be accomplished by the trustee asking the creditor to return the payment or, if necessary, a lawsuit called a “preference action” can be filed within the bankruptcy case.

What about payments to secured creditors?

A question can arise for secured creditors because foreclosing on collateral pledged to secure a loan does not provide the creditor more than it would have received if the collateral had been liquidated in the bankruptcy case. Naturally, there are some exceptions to this rule. If a secured creditor’s claim is greater than the value of the collateral, the amount of the secured claim is typically limited to the value of the collateral as of the petition date. Any remaining deficiency balance becomes an unsecured claim. Thus, some bankruptcy judges have ruled that any payment made to a secured creditor within the 90-day period is assumed to have been made for the unsecured part of the lender’s claim and therefore potentially subject to a preference action.

Secured creditor defenses

If you are a secured creditor and you are facing a preference action, it is important to understand you may have valid defenses to the preference action. The primary defense used by secured creditors is the “ordinary course of business” defense, which means the payment was made during the ordinary course of business between the debtor and creditor so it is not extra-ordinary or preferential.

To learn more about preferential transfers, contact us for a free consultation.


Florida’s Mortgage Modification Mediation Program

Auction house

The United States Bankruptcy Court for the Middle District of Florida, as well as the other districts of the state, has initiated the Mortgage Modification Mediation (MMM) program (also referred to as the Loss Mitigation Mediation program) in an effort to assist individuals with obtaining mortgage modifications. The program allows debtors who own an interest in real property with a mortgage on it, to explore modifying the mortgage loan.

Orlando launched the pilot program for MMM and kept statistics regarding the outcome of its mediations, which show a loan modification average success rate of 70%. This is significantly better than the state court mediation system which averaged less than a 3.6% success rate.

The MMM program can assist a debtor as follows:

  • Currently, an individual Chapter 7 debtor may request MMM to modify a mortgage or surrender any real property that the debtor has an interest in.
  • An individual Chapter 11 debtor can request MMM to modify a mortgage or surrender real property that the debtor has an interest in and is used as the debtor’s primary residence.
  • An individual Chapter 13 debtor may request MMM to modify a mortgage or surrender any real property that the debtor has an interest in.

The debtor, the lender, or the court may request referral to MMM. If you participate in the program, MMM provides an online portal which allows debtors and lenders to submit documents via a secure website and correspond online with each other and a mediator. The goal of the website is to allow the parties access to easily view all documentation and avoid multiple submissions or lost records. The MMM program also requires all parties to act in good faith and diligently work to modify the debtor’s loan and avoid foreclosure. Finally, the MMM program allows a neutral mediator to supervise the negotiations, which increases the likelihood of a resolution being reached.

If you are have questions regarding the MMM program or how bankruptcy could benefit you, contact us for a free consultation.


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