Tag Archives: trustee

Is my 401K Safe in Bankruptcy?

When you are struggling financially and being harassed by creditors, the idea of getting safe refuge in bankruptcy can be quite appealing. However, most people are afraid to take this step because they fear what will happen to their assets. A significant assets for most individuals is their retirement account. Fortunately, federal bankruptcy law provides protection for qualified retirement accounts. In fact, the law sets forth an exemption that removes a qualified 401k, pension, profit sharing or Individual Retirement Account (IRA) from being included in your bankruptcy estate. Most state bankruptcy laws have a similar exemption as well.

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When it comes to protecting an IRA, the maximum amount that can be exempted is $1,245, 475 per individual. This is a substantial sum and most debtors have accounts that are well below this amount, so they are protected fully. However, if your IRA account exceeds the cap, you should consult with your bankruptcy lawyer to discuss your options.

In fact, if you are planning to file a personal bankruptcy, you should consult with an attorney to verify that all of your retirement accounts qualify for the exemption. This is also true if you have taken a loan against your 401k account. A loan against your retirement account may add some complexity to your filing, so it is important for you and your attorney to be prepared to address the issues.

Claiming all of the applicable exemptions to safeguard your assets is essential to having a successful bankruptcy case. When you have your initial consultation with your bankruptcy attorney, you should provide all of the records regarding each of your retirement accounts to confirm that the funds will be protected.

Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


Can Social Media Negatively Impact Your Bankruptcy?

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You might be surprised to learn that attorneys are using social media to gather evidence for lawsuits. Facebook, Twitter, Instagram and numerous other websites provide a wealth of information about people. It is important to remember that what you post on social forums can be used against you by creditors and/or the trustee in your bankruptcy case. Consider the following:

  • When you file a personal bankruptcy, you must make full financial disclosures. This means you must list all of your assets, debts, income and expenses. Thus, if you post a picture of a new motorcycle you just bought and it is not listed in your bankruptcy filings, it can raise issues in your case.
  • When you disclosed your income, did you remember to include your side-job selling crafts on Etsy? Failure to disclose a source of income can negatively affect your bankruptcy case.
  • A Chapter 7 or Chapter 13 debtor must follow strict guidelines regarding their budget while their case is pending. In other words, you cannot make unnecessary or frivolous purchases while not paying all of your creditors in full. Any posts you make regarding vacations, expensive purchases or other questionable expenditures can cause trouble for you.

Bankruptcy trustees typically do not actively search social media websites trying to catch you in a lie, but a disgruntled creditor might. Thus, the wisest thing you can do to ensure your bankruptcy filing is a success, is to be honest and make full financial disclosure in your pleadings. Additionally, you should think before posting and refrain from putting anything out there that you would not want the trustee or your creditors to see!

If you are considering filing for bankruptcy protection, contact the skilled attorneys at Faro & Crowder to schedule a free consultation. We are located in Melbourne and proudly serve all of Central Florida.


The “Meeting of Creditors” in Bankruptcy

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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.

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