Monthly Archives: April 2015

Can I use an expired driver’s license for my 341 Meeting of Creditors in bankruptcy?

Yes.

When we meet with the bankruptcy trustee for your 341 Meeting of Creditors, you are required to show proof of identify and proof of social security number.expired license

Proof of social comes from your social security card, or a W2, or a 1099, or even an SSI or SSDI award letter, but it does NOT come from the front page of your tax return.

Proof of identity comes from a government issued photo id.  I have had clients try to show their Costco membership cards, and even a Seven Peaks Waterparks Pass of All Passes before, and the bankruptcy trustee does not like this.  Not at all.  A government issued photo id is something like your:

driver’s license

concealed carry permit

military photo id

It does NOT matter if the id is expired.  The trustee won’t be calling the highway patrol to advise them that your license may not be quite up to date.

 

Is there any way to keep my truck/car loan out of bankruptcy?

Kind of, but not in the way you think.

Chapter 7

When you file a chapter 7, you cannot pick and choose your creditors:  you must list them all.  However, if you have a secured loan, like a car or truck loan, you can check a box that says, “Reaffirm.”  This means that you are effectively pulling the loan back out of bankruptcy.  You will still be liable for it with the same payments, interest rate, and balance.

So no, you cannot keep it out of the bankruptcy when you file, but you can “Reaffirm” and keep the loan.  keep it out

Chapter 13

Same as in a chapter 7, you must list all creditors.

You can choose to pay your truck/car loan as part of your 5 year chapter 13 plan, or you can list them as a “direct pay,” where you make payments directly to that secured lender instead of funneling them through the bankruptcy trustee.

Either way, you must list the loan, but you can make it possible to pay that creditor back and keep the collateral (car/truck).

I financed a Kirby vacuum through Preferred Credit, Inc. What happens in bankruptcy?

Hopefully, you surrender it, give it back, and wipe out the balance you owe to Preferred Credit, Inc.  kirby

I don’t like to judge my clients.  Everyone makes bad decisions, most people suffer surprise health issues, and job loss can hit you at any time.  However, I will go out on a limb and say that you don’t need to finance a vacuum cleaner.  Yes, I’ve had the demonstration where the door-to-door salesman holds the vacuum up to my couch and sucks out about 5# of dried human flesh and food debris, and it is impressive.  But, you still don’t need to finance a vacuum.

So, when you finance a Kirby vacuum through Preferred Credit Inc., you can list that debt in your bankruptcy.  You can chose to keep it, keep the vacuum, and reaffirm the debt, where you agree to pay the remaining balance and effectively pull that loan out of bankruptcy, re-assuming liability for it.

Or, you can surrender the vacuum and wipe out the debt.  Yes, they will probably come pick it up, but at least you don’t owe that debt anymore.

How long does it take to prepare the bankruptcy paperwork in an emergency?

It depends.

Short answer:  30 minutes for a skeletal petition.

(A skeletal petition only has your name/social/address along with your pre-bankruptcy course certificate and a list of your creditors.  This gets you a case number and stops a foreclosure dead in its tracks)

Long answer:

Here is what you need for an emergency or skeletal petition:

1.  Pre-bankruptcy class:  You can NOT file an emergency petition (or a full petition) without taking this class first.  The class takes one hour to complete.  If you need to file bk in a hurry, then you’d better take this class immediately. And no, your attorney won’t file your case without that certificate.  We don’t file cases with the intention of letting them get automatically dismissed.

2.  Personal identifying information:  At a minimum, we need your name/social/address.

3.  List of creditors:  You need to have a list of your creditors that will be affected by this bankruptcy.

4.  Consultation:  You need to have previously met with your attorney, had a full consultation, and had him review the Form 22 Means Test to determine whether you qualify for a chapter 7, chapter 13, or other kind of bankruptcy.  You really can’t just walk into an office and plunk down a fee as if you were ordering a #1 at McDonald’s (even though the Big Mac combo is excellent for the price).  He also needs to review your assets, because it would be fairly awful to file a chapter 7 bankruptcy, not realizing that the chapter 7 trustee immediately put an intercept on your $12,000 tax refund you were hoping to receive and spend.

Here are the approximate times:

30+ minutes…initial consultation.

60 minutes….pre-bankruptcy class.

30 minutes…..Prepare a skeletal petition from start to finish.

240 minutes…Prepare a full petition.

No one likes to prepare or file a skeletal petition, and I will only do it in a true emergency, like a foreclosure sale that is scheduled today in two hours instead of next week like we initially thought.

I also like to take my time on crafting the bk petition.  Bankruptcy is heavily form and paperwork oriented, and there are a lot of moving pieces that you have to line up to get it done correctly.  (Yes, I am watching Stargate SG1 on the second screen.  It makes the paperwork process a little more endurable).  20150406_113346

What is the best way to keep track of all of my creditors before bankruptcy?

Before you file bankruptcy, you have to fill out a standard bankruptcy packet for your attorney.  It lists your assets, your creditors, your income/expenses, and has a few fairly random questions.

The hardest part for most people is listing your creditors.  Your attorney can help by running a credit report, but many, many creditors don’t report on your credit.  You don’t want to miss them, and there is no magical super-database that your attorney can use to track down all of your creditors for you.  Let me repeat that, because I get asked this question over and over and over:  there is no magical super-database that your attorney can use to track down all of your creditors!

Some attorneys and firms will even advertise that your attorney is lazy if he makes you do your own work.  Those advertisements are false and misleading:  you need to keep track of your creditors, because your attorney cannot find all of your creditors without your assistance.

For my clients, I will sit down and run a credit report with them.  However, I also direct them to keep track of every single collection notice they receive.  I direct them to bring me the original collection notices along with any follow-up letters/notices that they receive.

Here is what a client’s recent packet of paperwork looked like, along with his stack of collection notices:  20150402_094809

I would rather that you bring me too much material instead of too little, so if you start to think that you are giving me too much information, stop and look at the above picture again, and then give it all to me.  That way, we can make sure that your bankruptcy paperwork is really complete.

However, I really don’t need used earplugs or soda bottle caps in the same box.