|
Assets and Exemptions
After You File
Bankruptcy and Credit Reports
Questions for Creditors
What happens to my personal property, real property and other assets?
What is an "exemption" and what would be "exempt"?
Can I keep my home and automobile?
Are pension plans and 401(k) plans exempt?
Are IRA accounts exempt?
What happens
to my personal property, real property and other assets?
Once the bankruptcy is filed, all of your
property at the time of the filing and certain other property
to be received in the future, becomes the property of
the bankruptcy estate. This means that the bankruptcy
trustee may take control of this property to satisfy your
creditors. You are required to file a schedule with the
court describing all of your assets.
Certain property is either
"excluded" from the bankruptcy estate or "exempt,"
and you will be able to keep that property. The law describes
what property is "excluded" from the bankruptcy
estate and what property is exempt.
Often, all of your assets
can be protected. However, if any question exists regarding
protection of assets, you should hire an attorney to ensure
that the exemptions are properly chosen and applied to
maximize the value of assets retained.
What is an "exemption"
and what would be "exempt"?
Certain property is protected
from creditors in bankruptcy and is known as "exempt"
property. Exactly what property is protected depends on
the exemption scheme chosen. In many states, you can either
exempt the certain property or exempt any "property
that is exempt under [other] Federal law...or State or
local law that is applicable..." In other states,
you can only choose the "other Federal and State
law exemption scheme." These states have "opted
out" of the bankruptcy exemption scheme. Determining
what property in Colorado is exempt requires a complete
understanding of the laws governing residency within states
and the exemption laws of the state of Colorado.
Can I keep my
home and automobile?
In many cases you can retain
your home and automobile in a chapter 7 bankruptcy proceeding.
You will lose your home or automobile in a chapter 7 if
(1) you are behind in making payments on a loan secured
by the home or automobile and can not reach a payment
agreement with the creditor, or (2) the home or automobile
has equity (i.e.. a liquidation value in excess of the
amount owed to creditors with liens against the property)
in excess of what you are allowed to exempt.
If either of these two
conditions exist, you might consider filing a chapter
13 petition, which allows you to develop a plan for repaying
your creditors without necessarily liquidating assets.
Are pension plans
and 401(k) plans exempt?
The United States Supreme Court has held
that pension plans, 401(k) plans, and other "ERISA-qualified
plans" are generally "excluded" from the
bankruptcy estate
Are IRA accounts
exempt?
Unlike 401(k) plans, IRA accounts
are not ERISA-qualified plans. However, Colorado law protects
IRA's from the bankruptcy estate. Some bankruptcy court
judges have held that an IRA may be partially exempt.
After You File
What happens after I file a bankruptcy petition?
Who deals with my creditors and bill collectors during the bankruptcy?
What is the "automatic stay?"
My creditors ignored the automatic stay. What do I do?
What happens
after I file a bankruptcy petition?
First, the bankruptcy court will send
your creditors a "Notice of Commencement of Case"
informing them that you have filed the petition.
About 40 to 60 days after
filing the bankruptcy petition, you will have to attend
a hearing presided over by a bankruptcy trustee. This
hearing is called the First Meeting of Creditors. The
trustee is not a judge, but an individual appointed by
the United States Trustee to oversee bankruptcy cases.
At the First Meeting of Creditors the trustee will ask
you questions under oath regarding the content of your
bankruptcy papers, your assets, debts and other matters.
Under normal circumstances,
in a chapter 7 proceeding the Bankruptcy Court will automatically
issue you a discharge 70 to 85 days after the First Meeting
of Creditors. In a chapter 13 proceeding, the Court will
enter an order confirming your chapter 13 plan. In a chapter
13 proceeding you receive your discharge upon completion
of the chapter 13 plan.
Who deals with
my creditors and bill collectors during the bankruptcy?
Usually, your attorney deals with all
creditors.
What is the "automatic
stay?"
When you file a bankruptcy petition,
your creditors are automatically barred from taking any
action to collect the debts owed them or seizing your
property. There are some exceptions. For example, a bankruptcy
petition does not stay the commencement or continuation
of a criminal action (unless brought to collect a debt),
an action to collect alimony, maintenance or support from
certain assets or income, or an action to enforce a government's
police or regulatory power.
My creditors
ignored the automatic stay. What do I do?
First, make sure the creditor
is aware that you filed bankruptcy and ask it to stop
collection efforts. If the creditor does not respond,
contact your attorney if you have one. If not, ask the
bankruptcy court to enter an order specifically enjoining
the creditor from further action.
If you are an individual
and are injured by your creditor's willful failure to
comply with the automatic stay, the law allows you to
recover actual damages, including costs and attorneys'
fees, and, in appropriate circumstances, punitive damages.
Finally, in some states
you may have to obtain an order from the bankruptcy court
reversing the action taken by the creditor.
Bankruptcy and Credit Reports
Will the fact that I filed bankruptcy appear on credit reports?
How can I re-establish my credit rating after bankruptcy?
Will the fact
that I filed bankruptcy appear on credit reports?
The bankruptcy is treated as judgment and will be listed in credit reports for a period
of up to 10 years.
How can I re-establish my credit rating after bankruptcy?
The best way is to obtain
new credit and make the payments religiously. Sometimes
an existing creditor may continue to grant you credit
based upon a reaffirmation agreement made during the bankruptcy.
You may also be able to obtain a secured credit card,
where the credit limit is based upon the amount of security
given, or obtain credit using a co-signer. There are also
numerous books that show how to rebuild your credit.
Questions for Creditors
My ex-spouse filed bankruptcy. What do I do?
My employer filed bankruptcy. How do I get paid?
Are there bankruptcy crimes?
How do I report a bankruptcy crime?
My ex-spouse
filed bankruptcy. What do I do?
Consult an attorney. In most cases your spouse must continue
to make alimony, maintenance and child support payments.
If your spouse agreed to pay certain joint obligations,
pay the mortgage on your home, or transfer assets to you,
you may be able to obtain a bankruptcy court order excepting
those obligations from the bankruptcy discharge. Finally,
if your spouse discharges a joint debt, that fact may
appear on your credit report.
My employer filed
bankruptcy. How do I get paid?
If you are a union employee, contact your union. Often
unions will represent the employees in the bankruptcy
proceeding. If not, file a proof of claim for any unpaid
wages, vacation benefits, etc. owed from before the date
of filing. You can obtain a proof of claim form from the
local bankruptcy court.
Follow the instructions
on the proof of claim. File the
proof of claim with the bankruptcy court. Make sure you
send them a copy and ask to have it returned to you with
a date stamp. Call the bankruptcy court and obtain the
name and address of the debtor's attorney or the attorney
for the trustee if a trustee has been appointed. Send
them copies of the proof of claim.
Are there bankruptcy
crimes?
Yes. Examples of bankruptcy crimes
are knowingly and fraudulently concealing assets, lying
under oath or on bankruptcy schedules, or knowingly and
fraudulently filing a false proof of claim. Bankruptcy
fraud can also be used to support a RICO claim.
How do I report
a bankruptcy crime?
If you are aware of a bankruptcy crime, you should report
the crime to the trustee assigned to oversee the case.
If no trustee is appointed, contact the U.S. Trustee's
Office. The trustee will, if he or she has reasonable
grounds for believing that a crime was committed, report
the facts to the United States Attorney for investigation.
|
Minds Over Media
