CHAPTER 7 CLIENTS | BANKRUPTCY PROCESS
For Tran Singh LLP, easing the burden of the bankruptcy process by providing valuable resources and information to our clients, is a top priority. We endeavor to accomplish that by making as much valuable information available online to you 24/7.
For our Chapter 7 clients, we have provided below the bankruptcy process steps of which you should be aware, including deadlines, responsibilities, obligations and additional information, requirements and resources. We encourage you to read this in conjunction with the Chapter 7 Bankruptcy Timeline.
For our Chapter 7 clients, we have provided below the bankruptcy process steps of which you should be aware, including deadlines, responsibilities, obligations and additional information, requirements and resources. We encourage you to read this in conjunction with the Chapter 7 Bankruptcy Timeline.
PROCESS AND STEPS BEFORE FILING FOR CHAPTER 7 BANKRUPTCY
As illustrated in the Chapter 7 Bankruptcy Timeline, the initial process and steps before filing for Chapter 7 Bankruptcy are as follows:
Each of the foregoing is described on Bankruptcy Process | New Clients and we would refer you to such page for more detailed information with respect to those matters that occur up to the filing of your Chapter 7 bankruptcy case.
Additionally, in either a personal or corporate bankruptcy, the debtor (or its representative(s)) has ongoing legal obligations to the Chapter 7 Trustee, the creditors and to the Bankruptcy Court, as set forth in the Duties and Responsibilities of a Debtor Under Chapter 7, and described in the similarly titled heading below.
- Schedule Initial Consultation
- Pre-Consultation Documentation and Information
- Attend Initial Consultation Meeting
- Establish MyCase Client Portal Account
- Complete Pre-Filing Mandatory Credit Counseling
- Return Outstanding Documentation and Information to Complete Preparation of Required Bankruptcy Filings
- Following the Preparation of the Required Bankruptcy Filings, Client Returns to Review and Sign Bankruptcy Filings
- Bankruptcy Petition Filed
Each of the foregoing is described on Bankruptcy Process | New Clients and we would refer you to such page for more detailed information with respect to those matters that occur up to the filing of your Chapter 7 bankruptcy case.
Additionally, in either a personal or corporate bankruptcy, the debtor (or its representative(s)) has ongoing legal obligations to the Chapter 7 Trustee, the creditors and to the Bankruptcy Court, as set forth in the Duties and Responsibilities of a Debtor Under Chapter 7, and described in the similarly titled heading below.
MEANS TEST
The bankruptcy means test determines who can file for a Chapter 7 bankruptcy case and is a form that must be filed with the bankruptcy court. In a process that can be arduous, the means test clarifies whether you're eligible for Chapter 7 bankruptcy or confined to a Chapter 13 bankruptcy. The means test has two parts, both designed to determine whether you have disposal income that you could put toward paying off debt. The test is only for those who have primarily consumer debts, such as credit card debt or medical debt.
The first part of the means test is to determine whether your household income is below your state's median income. You can view the median family income data set forth in this chart titled, Census Bureau Median Family Income by Family Size, provided by the U.S. Department of Justice. Additional resources from the U.S. Department of Justice include each of the following:
If your average gross income is below the median for your household size in your residential area, you have passed the means test and are only required to file with your Chapter 7 bankruptcy petition the Chapter 7 Statement of Your Current Monthly Income. However, if your income is above the median income for your household size, you will work with your attorney to determine whether your gross income, taken together with your allowable expenses meet the means test, and will be required to file, in addition to the Chapter 7 Statement of Your Currently Monthly Income, a Chapter 7 Means Test Calculation.
The first part of the means test is to determine whether your household income is below your state's median income. You can view the median family income data set forth in this chart titled, Census Bureau Median Family Income by Family Size, provided by the U.S. Department of Justice. Additional resources from the U.S. Department of Justice include each of the following:
- IRS National Standards for Out-of-Pocket Health Care
- Bankruptcy Allowable Living Expenses Local Housing and Utilities Standards (for purposes of bankruptcy only)
- IRS Local Transportation Expense Standards - South Census Region
If your average gross income is below the median for your household size in your residential area, you have passed the means test and are only required to file with your Chapter 7 bankruptcy petition the Chapter 7 Statement of Your Current Monthly Income. However, if your income is above the median income for your household size, you will work with your attorney to determine whether your gross income, taken together with your allowable expenses meet the means test, and will be required to file, in addition to the Chapter 7 Statement of Your Currently Monthly Income, a Chapter 7 Means Test Calculation.
ROLE OF THE CHAPTER 7 TRUSTEE
Once your Chapter 7 bankruptcy case is filed, an impartial Chapter 7 Trustee is randomly assigned from a pool of "panel trustees." Panel trustees are individuals that have been pre-screened and hired to act as Chapter 7 Trustees by the U.S. Trustee for the Houston Division of the Southern District of Texas. The main functions of the Chapter 7 Trustee are to oversee and administer your bankruptcy case. When you file a Chapter 7 bankruptcy petition, all of your assets are placed into a temporary “estate.” The estate is the temporary legal owner of all property in which you have a legal or equitable interest as of the date you file Chapter 7 bankruptcy. The Chapter 7 Trustee examines the estate to determine whether there are assets that can be sold to pay creditors.
Most Chapter 7 bankruptcy cases are considered “no asset" cases, meaning that all the debtor's assets are exempt or subject to valid liens. However, when non-exempt assets are available, the Chapter 7 Trustee may take and sell these assets to pay creditors. The Chapter 7 Trustee oversees the accounting and payment of creditors from funds obtained by liquidating non-exempt assets of the debtor. An additional role of the Chapter 7 Trustee is to determine if the debtor is abusing the bankruptcy process which occurs, generally, when a debtor has sufficient income to pay the consumer debt.
The Chapter 7 Trustee also presides over the debtor’s 341 Meeting. The Chapter 7 Trustee is usually an attorney or accountant with extensive bankruptcy law and auditing experience, but is forbidden from offering legal advice to a debtor in bankruptcy. The Chapter 7 Trustee is under a duty to investigate the debtor’s affairs, examine the debtor under oath, and submit reports to the bankruptcy court and Office of the U.S. Trustee.
Most Chapter 7 bankruptcy cases are considered “no asset" cases, meaning that all the debtor's assets are exempt or subject to valid liens. However, when non-exempt assets are available, the Chapter 7 Trustee may take and sell these assets to pay creditors. The Chapter 7 Trustee oversees the accounting and payment of creditors from funds obtained by liquidating non-exempt assets of the debtor. An additional role of the Chapter 7 Trustee is to determine if the debtor is abusing the bankruptcy process which occurs, generally, when a debtor has sufficient income to pay the consumer debt.
The Chapter 7 Trustee also presides over the debtor’s 341 Meeting. The Chapter 7 Trustee is usually an attorney or accountant with extensive bankruptcy law and auditing experience, but is forbidden from offering legal advice to a debtor in bankruptcy. The Chapter 7 Trustee is under a duty to investigate the debtor’s affairs, examine the debtor under oath, and submit reports to the bankruptcy court and Office of the U.S. Trustee.
TAX RETURNS
In accordance with § 521(e)(2)(A) of the Bankruptcy Code, all Chapter 7 debtors must provide the Chapter 7 Trustee copies of the 2 most recent years of the debtor's federal tax returns no later than 7 days before the first meeting of creditors (341 Meeting).
Failure to timely file tax returns can prevent discharge of a Chapter 7 bankruptcy and result in either dismissal of the Chapter 7 case or conversion to a Chapter 13 case.
To obtain a tax return transcript, please see the options below:
Failure to timely file tax returns can prevent discharge of a Chapter 7 bankruptcy and result in either dismissal of the Chapter 7 case or conversion to a Chapter 13 case.
To obtain a tax return transcript, please see the options below:
- Online—Go to www.irs.gov/transcript to download a copy of your tax return transcript immediately.
- Mail—You can elect the option to Get Transcript by Mail at www.irs.gov/transcript or complete and mail either a Form 4506-T, Request for Transcript of Tax Return, or Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript.
- Call—1-800-908-9946 and follow the voice prompts.
- In Person—You can also file your unfiled federal tax returns at any of the following offices:
Houston (Downtown) |
Monday—Friday 8:30 a.m. to 4:30 p.m. |
Office Information (281) 721-7021 |
Make Appointment (844) 545-5640 |
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Houston (NW) |
Monday—Friday 8:30 a.m. to 4:30 p.m. |
Office Information (713) 209-5499 |
Make Appointment (844) 545-5640 |
|
Houston (SE) |
Monday—Friday 8:30 a.m. to 4:30 p.m. |
Office Information (281) 721-7021 |
Make Appointment (844) 545-5640 |
|
Houston (SW) |
Monday—Friday 8:30 a.m. to 4:30 p.m. |
Office Information (281) 721-7021 |
Make Appointment (844) 545-5640 |
§ 341(a) MEETING QUESTIONNAIRE AND SWORN TESTIMONY
You must have completed, signed and returned to us the § 341(a) Meeting Questionnaire and Sworn Testimony which is required to be delivered to the Chapter 7 Trustee not later than 7 days prior to the 341 Meeting.
Please note that this differs from the § 341 Meeting of Creditors Required Statements/Questions, which we are providing for your reference in preparation for your 341 Meeting.
Please note that this differs from the § 341 Meeting of Creditors Required Statements/Questions, which we are providing for your reference in preparation for your 341 Meeting.
PREPARING FOR YOUR MEETING OF CREDITORS | 341 MEETING
It is normal to feel apprehension surrounding your 341 Meeting. To help ease those worries, we’ve provided steps below to help you prepare for your 341 Meeting and to feel comfortable and confident at your 341 Meeting. In addition to those reminders provided below, we recommend that you review your bankruptcy schedules, which were filed with your bankruptcy petition, and sets forth, among others, your assets and liabilities, executory contracts and unexpired leases (if applicable), and income and expenses. On the day of your scheduled 341 Meeting, please be mindful to select appropriate clothing. Although your 341 Meeting will be held via Zoom, an online virtual meeting platform, it is a legal proceeding and you should dress accordingly. Casual clothing such as t-shirts or sweatshirts are examples of the type of clothing that is frowned upon. Similarly, you should not select clothing such as a business suit which will draw unnecessary attention. The best choice would be to select business casual clothing such as a collared shirt for men, and, for women, a conservative top. Additionally, we would recommend that you not wear any expensive jewelry. Lastly, for electronic devices, we ask that you keep them on silent, or turn them off entirely (to the extent your device is not being used for the meeting), until the conclusion of the 341 Meeting.
During the 341 Meeting we encourage you to relax. Remember that nearly every debtor who attends a 341 Meeting frequently observes that they were surprised that the process was quick and painless. Be sure to address the Chapter 7 Trustee with respect and listen carefully to his or her questions. If you find it helpful, use a notepad and pen to write down the questions. Answer only the question asked and do not volunteer information. Do not try to explain or justify answers. If you don’t know the answer to a question, let your attorney assist you or speak for you. Most importantly—answer truthfully—you are under oath and being recorded. Do not make any agreement with the Chapter 7 Trustee prior to consulting with your attorney. At the conclusion of your 341 Meeting, be sure that you’ve written down any items that you will be required to provide to your Chapter 7 Trustee. At the conclusion of your 341 Meeting, your attorney will call you to ensure you are aware of any responsibilities, in addition to those instructed by the Chapter 7 Trustee, that you may have.
Additionally, please refer to the Instructions for Joining a Zoom 341 Meeting of Creditors and Best Practices for Debtors Attending Virtual 341 Meetings of Creditors in advance of your 341 Meeting.
Your participation at the 341 Meeting is generally less than ten minutes. Creditors or other parties interested in your case rarely attend this meeting. By spending a few minutes preparing for your meeting, you can reduce your stress and ensure that your meeting goes smoothly.
During the 341 Meeting we encourage you to relax. Remember that nearly every debtor who attends a 341 Meeting frequently observes that they were surprised that the process was quick and painless. Be sure to address the Chapter 7 Trustee with respect and listen carefully to his or her questions. If you find it helpful, use a notepad and pen to write down the questions. Answer only the question asked and do not volunteer information. Do not try to explain or justify answers. If you don’t know the answer to a question, let your attorney assist you or speak for you. Most importantly—answer truthfully—you are under oath and being recorded. Do not make any agreement with the Chapter 7 Trustee prior to consulting with your attorney. At the conclusion of your 341 Meeting, be sure that you’ve written down any items that you will be required to provide to your Chapter 7 Trustee. At the conclusion of your 341 Meeting, your attorney will call you to ensure you are aware of any responsibilities, in addition to those instructed by the Chapter 7 Trustee, that you may have.
Additionally, please refer to the Instructions for Joining a Zoom 341 Meeting of Creditors and Best Practices for Debtors Attending Virtual 341 Meetings of Creditors in advance of your 341 Meeting.
Your participation at the 341 Meeting is generally less than ten minutes. Creditors or other parties interested in your case rarely attend this meeting. By spending a few minutes preparing for your meeting, you can reduce your stress and ensure that your meeting goes smoothly.
ATTENDING YOUR MEETING OF CREDITORS | 341 MEETING
During the meeting of creditors, often referred to as the 341 Meeting (derived from § 341 of the Bankruptcy Code), the Chapter 7 Trustee places the debtor under oath, and both the Chapter 7 Trustee and any creditors may ask questions. Despite the name, creditors rarely attend the 341 Meeting. This meeting is recorded and conducted under oath and penalty of perjury. If a husband and wife file a joint petition, they must both attend the 341 Meeting and answer questions. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the 341 Meeting.
The debtor must answer questions regarding his or her debts, assets and budget. The Chapter 7 Trustee's questions are typically focused on two areas, the first is whether the debtor has any non-exempt property, and, if so, is the property valuable enough for the bankruptcy estate to realize a substantial dividend for creditors? Simply put, does the debtor own sufficient non-exempt property to justify taking it, selling it and distributing the proceeds to creditors. The second major focus of inquiry is whether the debtor is abusing the bankruptcy process by filing a Chapter 7 case instead of proposing a repayment plan under Chapter 13. If the debtor's monthly income exceeds his or her monthly expenses, the Chapter 7 Trustee may conclude that the debtor is abusing the process by attempting to discharge his or her debts without making payment, rather than proposing a repayment plan under Chapter 13. The only way to avoid this result is if the debtor's reasonably monthly expenses, as reflected on the budget submitted to the bankruptcy court, is equal to or exceeds his or her monthly income.
Additionally, at some point during the meeting, the Chapter 7 Trustee will ask the following statutorily required questions:
In most cases, at the conclusion of the 341 Meeting, the Chapter 7 Trustee will announce that he or she will allow the exemptions claimed by the debtor, abandon all non-exempt property, and close the case as a "no asset" case, meaning that the Chapter 7 Trustee is satisfied that the debtor does not have any assets worth administering and the debtor has not abused the bankruptcy process.
Consistent with any and all other hearing dates set for your case, you will be notified of the 341 Meeting by the bankruptcy court via first class mail. We will also notify you of this hearing date and it will appear as a calendared event in your MyCase Client Portal.
Failure to appear at the 341 Meeting may result in the dismissal of your case, which could require you to wait at least 180 days before you are eligible to file a second petition. If circumstances will prevent you from attending this meeting, contact your attorney immediately. Work or family commitments are not satisfactory excuses for missing your scheduled 341 Meeting.
All tax returns required to be filed with the Internal Revenue Service must have been filed, or be filed, prior to the date your 341 Meeting is held. Extensions with the Internal Revenue Service do not apply and there are absolutely no exceptions to this requirement. Failure to file your tax returns with the Internal Revenue Service will result in the dismissal of your case, which could require you to wait at least 180 days before you are eligible to file a second petition.
In preparation for your 341 Meeting, please review the § 341 Meeting of Creditors Required Statements/Questions. The Chapter 7 Trustee shall ensure that the debtor answers the substance of each of the questions set forth therein on the record. The Chapter 7 Trustee may exercise discretion and judgment in varying the wording of the statements/questions, if the substance of the statements/questions is covered.
Additionally, please refer to the Instructions for Joining a Zoom 341 Meeting of Creditors and Best Practices for Debtors Attending Virtual 341 Meetings of Creditors in advance of your 341 Meeting.
The debtor must answer questions regarding his or her debts, assets and budget. The Chapter 7 Trustee's questions are typically focused on two areas, the first is whether the debtor has any non-exempt property, and, if so, is the property valuable enough for the bankruptcy estate to realize a substantial dividend for creditors? Simply put, does the debtor own sufficient non-exempt property to justify taking it, selling it and distributing the proceeds to creditors. The second major focus of inquiry is whether the debtor is abusing the bankruptcy process by filing a Chapter 7 case instead of proposing a repayment plan under Chapter 13. If the debtor's monthly income exceeds his or her monthly expenses, the Chapter 7 Trustee may conclude that the debtor is abusing the process by attempting to discharge his or her debts without making payment, rather than proposing a repayment plan under Chapter 13. The only way to avoid this result is if the debtor's reasonably monthly expenses, as reflected on the budget submitted to the bankruptcy court, is equal to or exceeds his or her monthly income.
Additionally, at some point during the meeting, the Chapter 7 Trustee will ask the following statutorily required questions:
- Is the debtor aware of the consequences of seeking a discharge in bankruptcy and the effects on credit history?
- Is the debtor aware of their ability to file under another chapter?
- Is the debtor aware of the effect of receiving a discharge?
- Is the debtor aware of the effect of reaffirming a debt?
In most cases, at the conclusion of the 341 Meeting, the Chapter 7 Trustee will announce that he or she will allow the exemptions claimed by the debtor, abandon all non-exempt property, and close the case as a "no asset" case, meaning that the Chapter 7 Trustee is satisfied that the debtor does not have any assets worth administering and the debtor has not abused the bankruptcy process.
Consistent with any and all other hearing dates set for your case, you will be notified of the 341 Meeting by the bankruptcy court via first class mail. We will also notify you of this hearing date and it will appear as a calendared event in your MyCase Client Portal.
Failure to appear at the 341 Meeting may result in the dismissal of your case, which could require you to wait at least 180 days before you are eligible to file a second petition. If circumstances will prevent you from attending this meeting, contact your attorney immediately. Work or family commitments are not satisfactory excuses for missing your scheduled 341 Meeting.
All tax returns required to be filed with the Internal Revenue Service must have been filed, or be filed, prior to the date your 341 Meeting is held. Extensions with the Internal Revenue Service do not apply and there are absolutely no exceptions to this requirement. Failure to file your tax returns with the Internal Revenue Service will result in the dismissal of your case, which could require you to wait at least 180 days before you are eligible to file a second petition.
In preparation for your 341 Meeting, please review the § 341 Meeting of Creditors Required Statements/Questions. The Chapter 7 Trustee shall ensure that the debtor answers the substance of each of the questions set forth therein on the record. The Chapter 7 Trustee may exercise discretion and judgment in varying the wording of the statements/questions, if the substance of the statements/questions is covered.
Additionally, please refer to the Instructions for Joining a Zoom 341 Meeting of Creditors and Best Practices for Debtors Attending Virtual 341 Meetings of Creditors in advance of your 341 Meeting.
CHAPTER 7 ASSET CASES | CHAPTER 7 NO ASSET CASES
At the conclusion of the 341 Meeting, if your case is deemed a "no asset" case, meaning the Chapter 7 Trustee has determined that there are no assets available to sell to distribute to unsecured creditors, the Chapter 7 Trustee will normally file a "no asset" report with the bankruptcy court. Most Chapter 7 bankruptcy cases for individual debtors are no asset cases. Accordingly, under these circumstances, following the 341 Meeting, you must complete the approved debtor education and financial management course (as described below). There is a mandatory 60-day waiting period following your 341 Meeting during which the Chapter 7 Trustee or a creditor can object to the discharge of your Chapter 7 bankruptcy case, or the dischargeability of a debt. If there are no objections raised during the 60-day waiting period, you should expect a discharge order to be entered by the bankruptcy court approximately two weeks thereafter.
However, if there are (or it appears that there might be) non-exempt assets in the bankruptcy estate, the Chapter 7 Trustee may continue the 341 Meeting to another date and request that you provide additional information and/or documentation. Additionally, the Chapter 7 Trustee's investigation may also include a personal inspection of the assets or any other action necessary to properly investigate the non-exempt assets. If the Chapter 7 Trustee determines that there are non-exempt assets to seize and sell, you will be expected to cooperate in getting such non-exempt assets to the Chapter 7 Trustee for disposition. Under these unique circumstances, the Chapter 7 process will differ from the typical no asset case and your experienced, bankruptcy attorney at Tran Singh LLP will guide you through this process and prepare you for what's next and help manage your expectations. These types of cases are unique depending on your particular circumstances.
However, if there are (or it appears that there might be) non-exempt assets in the bankruptcy estate, the Chapter 7 Trustee may continue the 341 Meeting to another date and request that you provide additional information and/or documentation. Additionally, the Chapter 7 Trustee's investigation may also include a personal inspection of the assets or any other action necessary to properly investigate the non-exempt assets. If the Chapter 7 Trustee determines that there are non-exempt assets to seize and sell, you will be expected to cooperate in getting such non-exempt assets to the Chapter 7 Trustee for disposition. Under these unique circumstances, the Chapter 7 process will differ from the typical no asset case and your experienced, bankruptcy attorney at Tran Singh LLP will guide you through this process and prepare you for what's next and help manage your expectations. These types of cases are unique depending on your particular circumstances.
MANDATORY POST-FILING DEBTOR EDUCATION AND FINANCIAL MANAGEMENT COURSE
Approximately 45 days following your 341 Meeting, you must complete an approved debtor education and financial management course and file a certificate of completion with the court. To receive a discharge in a Chapter 7 bankruptcy, all debtors are required to take an approved education course, the goal of which is to educate you on making wise financial choices including budget preparation; money management; utilizing credit wisely and effectively; consumer protection laws and agencies; and dealing with unexpected financial difficulties. Please note that this debtor education and financial management course is in addition to the pre-bankruptcy credit counseling course you took prior to filing your bankruptcy petition.
We recommend the second course offered by DebtorEdu or Access Counseling, Inc., each of which can be accessed by clicking on the respective logo below.
We recommend the second course offered by DebtorEdu or Access Counseling, Inc., each of which can be accessed by clicking on the respective logo below.
DebtorEdu | Post-Filing Debtor Education
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Access Counseling, inc. | Post-Filing Debtor Education
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If you prefer to take a different course, please navigate to U.S. Department of Justice | U.S. Trustee's Office | List of Approved Providers of Personal Financial Management Instructional Courses by clicking on the logo below.
Approved Personal Financial Management Courses | UST | Department of Justice
Upon completion of your debtor education and financial management course, please provide your certificate of completion to us for filing with the bankruptcy court.
Upon completion of your debtor education and financial management course, please provide your certificate of completion to us for filing with the bankruptcy court.
DEADLINE TO OBJECT TO DISCHARGE OF CHAPTER 7 BANKRUPTCY OR DISCHARGEABILITY OF A DEBT
Although customarily Chapter 7 bankruptcy cases, particularly no asset cases, proceed without challenge from creditors, the Bankruptcy Code provides creditors with the right to object to your Chapter 7 bankruptcy case prior to discharge. There are two types of objections that the creditor can file. Section 727 of the Bankruptcy Code permits a creditor or party-in-interest to object to your entire Chapter 7 discharge because of fraud or misrepresentation. Certain criteria must be proved, including, among many others, 1) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property . . . has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed—(a) property of the debtor, within one year before the date of the filing of the petition; or (b) property of the estate, after the date of the filing of the petition; 2) the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor's financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case; and 3) the debtor knowingly and fraudulently, or in connection with the case—(a) made a false oath or account; (b) presented or used a false claim; (c) gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property or advantage, for acting or forbearing to act; or (d) withheld from an officer of the estate entitled to possession . . . any recorded information, including books, documents, records, and papers, relating to the debtor's property or financial affairs. For the complete statute, we encourage you to review § 727 of the Bankruptcy Code.
The second, more commonly used objection, is under § 523 of the Bankruptcy Code, which permits a creditor to file an action asking the bankruptcy court to declare that a certain debt will not be discharged in your Chapter 7 bankruptcy case. Such debt can be in the form of money, property, or services, or an extension, renewal, or refinancing credit. The most common objections filed are more particularly described below.
In accordance with § 523(a)(2)(A) of the Bankruptcy Code, a creditor may object to discharge of a debt that was obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition. Although the terms, "false pretenses," "false representation," or "actual fraud" are not terms defined by the Bankruptcy Code, they are interpreted by the bankruptcy court in accordance with precedent established by bankruptcy court rulings to determine what meets such requirements.
Under § 523(a)(2)(B) of the Bankruptcy Code, a creditor may object to discharge if the debtor provided a statement in writing (i) that is materially false; (ii) respecting the debtor's or an insider's financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive. The bankruptcy court will make a determination as to whether the debt meets the four statutory requirements illustrated in the foregoing and evidence presented at a hearing on the creditor's petition will be utilized as a basis for such determination.
Creditors may also file an objection to discharge under § 523(a)(4) of the Bankruptcy Code as a result of debts for fraud or defalcation while acting in a fiduciary capacity, or for embezzlement or larceny. If the debtor acted in a fiduciary capacity, § 523(a)(4) provides that the claims of fraud and defalcation against the fiduciary are not subject to discharge. Additionally, all acts of embezzlement and larceny are exempted from discharge whether or not the debtor was acting in a fiduciary capacity.
Under § 523(a)(6) of the Bankruptcy Code, a creditor may object to discharge for willful and malicious injury by the debtor to another entity or to the property of another entity, meaning generally to a person or property. This is triggered when a creditor presents evidence that the debtor intentionally targeted the creditor and inflicted actual harm. Similar to the other objections raised (with the exception of those presumed nondischargeable), the burden of proof is on the creditor.
Please note that the foregoing is not an exhaustive or complete list of all objections that a creditor may raise to preserve its rights to collect a debt against you, as there are numerous set forth in § 523 of the Bankruptcy Code. An objection is an adversary proceeding within your Chapter 7 bankruptcy case, which is also referred to as bankruptcy litigation and each action is a separate, formal court proceeding that is required to be heard before the bankruptcy court and not a Chapter 7 Trustee. If you have a Chapter 7 bankruptcy case pending, and a creditor files an objection to discharge under § 523, it is critical that you do not ignore the objection.
Additionally, if you are concerned about a particular situation that may or could result in a creditor objecting to your Chapter 7 bankruptcy discharge, it is crucial that you communicate that openly and honestly with your attorney at Tran Singh LLP. It is also worth noting that your Engagement Letter and Fee Agreement which sets forth the terms of your representation in your Chapter 7 bankruptcy case provides that representation in any adversary hearing or response filed thereto is not covered therein and will be provided under a separate engagement letter and fee agreement. Therefore, we encourage you to be forthcoming such that we can anticipate potential disputes and, to the extent possible, settle them prior to the commencement of an adversary proceeding, as well as to structure your initial Engagement Letter and Fee Agreement to incorporate these services.
The second, more commonly used objection, is under § 523 of the Bankruptcy Code, which permits a creditor to file an action asking the bankruptcy court to declare that a certain debt will not be discharged in your Chapter 7 bankruptcy case. Such debt can be in the form of money, property, or services, or an extension, renewal, or refinancing credit. The most common objections filed are more particularly described below.
In accordance with § 523(a)(2)(A) of the Bankruptcy Code, a creditor may object to discharge of a debt that was obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition. Although the terms, "false pretenses," "false representation," or "actual fraud" are not terms defined by the Bankruptcy Code, they are interpreted by the bankruptcy court in accordance with precedent established by bankruptcy court rulings to determine what meets such requirements.
- Typically, an objection under § 523(a)(2)(A) of the Bankruptcy Code requires that the creditor prove the debtor's actions or statements were intentionally deceiving or misleading and that the creditor relied on the debtor's representations in advancing money, property or credit. The fraud can occur by the debtor making a misrepresentation through statements or conduct. When presented with the question, "Whether the "actual fraud" bar to discharge under § 523(a)(2)(A) of the Bankruptcy Code applies only when the debtor has made a false representation, or whether the bar also applies when the debtor has deliberately obtained money through a fraudulent transfer scheme that was actually intended to cheat a creditor," the U.S. Supreme Court, in Husky Int'l Electronics, Inc. v. Ritz, 136 S. Ct. 1581 (2016) that "[t]he term 'actual fraud' in § 523(a)(2)(A) encompasses forms of fraud, like fraudulent conveyance schemes, that can be effected without a false representation."
- However, the debtor has the burden of proving that no fraud or misrepresentation was intended if a creditor files an objection to discharge in accordance with § 523(a)(2)(A) which provides that consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the bankruptcy petition was filed; or cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the bankruptcy petition was filed, are presumed to be nondischargeable.
- In the event that a creditor files an objection to discharge, the creditor has the burden of proving the allegations, unless the claim is one of the two circumstances illustrated above where nondischargeability is presumed. Even if there is the presumption of nondischargeability, the creditor must still investigate the facts to make sure there is a basis for filing the objection and present such evidence in court.
Under § 523(a)(2)(B) of the Bankruptcy Code, a creditor may object to discharge if the debtor provided a statement in writing (i) that is materially false; (ii) respecting the debtor's or an insider's financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive. The bankruptcy court will make a determination as to whether the debt meets the four statutory requirements illustrated in the foregoing and evidence presented at a hearing on the creditor's petition will be utilized as a basis for such determination.
Creditors may also file an objection to discharge under § 523(a)(4) of the Bankruptcy Code as a result of debts for fraud or defalcation while acting in a fiduciary capacity, or for embezzlement or larceny. If the debtor acted in a fiduciary capacity, § 523(a)(4) provides that the claims of fraud and defalcation against the fiduciary are not subject to discharge. Additionally, all acts of embezzlement and larceny are exempted from discharge whether or not the debtor was acting in a fiduciary capacity.
- Defalcation is the "misappropriation of trust funds or money held in fiduciary capacity; failure to property account for such funds." Black's Law Dictionary, (5th Ed. 1961). Defalcation does not require an intentional conduct and may simply be a willful neglect of duty.
- Embezzlement is defined as the fraudulent appropriation of property by a person to whom such property has been entrusted or into whose hands it has lawfully come. To establish embezzlement, the creditor must show: 1) the appropriation of money or property; 2) for the debtor's use or benefit; and 3) done with fraudulent intent. For embezzlement, the fraudulent intent is established by a showing of dishonesty in fact. The wrongful conduct is after the property comes into the possession of the debtor.
- Larceny is defined as the wrongful taking of the property of another with fraudulent intent. The fraudulent intent in larceny is merely the intent to convert the property to one's own use without consent. With larceny, the wrongful conduct is in the initial taking of the property.
- In the event that a creditor files an objection to discharge, the creditor bears the burden of proving to the bankruptcy court all of the elements of the claim, including that the debtor was acting in a fiduciary capacity.
Under § 523(a)(6) of the Bankruptcy Code, a creditor may object to discharge for willful and malicious injury by the debtor to another entity or to the property of another entity, meaning generally to a person or property. This is triggered when a creditor presents evidence that the debtor intentionally targeted the creditor and inflicted actual harm. Similar to the other objections raised (with the exception of those presumed nondischargeable), the burden of proof is on the creditor.
Please note that the foregoing is not an exhaustive or complete list of all objections that a creditor may raise to preserve its rights to collect a debt against you, as there are numerous set forth in § 523 of the Bankruptcy Code. An objection is an adversary proceeding within your Chapter 7 bankruptcy case, which is also referred to as bankruptcy litigation and each action is a separate, formal court proceeding that is required to be heard before the bankruptcy court and not a Chapter 7 Trustee. If you have a Chapter 7 bankruptcy case pending, and a creditor files an objection to discharge under § 523, it is critical that you do not ignore the objection.
Additionally, if you are concerned about a particular situation that may or could result in a creditor objecting to your Chapter 7 bankruptcy discharge, it is crucial that you communicate that openly and honestly with your attorney at Tran Singh LLP. It is also worth noting that your Engagement Letter and Fee Agreement which sets forth the terms of your representation in your Chapter 7 bankruptcy case provides that representation in any adversary hearing or response filed thereto is not covered therein and will be provided under a separate engagement letter and fee agreement. Therefore, we encourage you to be forthcoming such that we can anticipate potential disputes and, to the extent possible, settle them prior to the commencement of an adversary proceeding, as well as to structure your initial Engagement Letter and Fee Agreement to incorporate these services.
REAFFIRMATION AGREEMENTS
Secured creditors may retain some rights to seize property securing an underlying debt even after a discharge is granted. Depending on individual circumstances, if a debtor wishes to keep certain secured property (such as an automobile), he or she may decide to "reaffirm" the debt. A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises that it will not repossess or take back the automobile or other property so long as the debtor continues to pay the debt.
If the debtor decides to reaffirm a debt, he or she must do so before the discharge is entered. The debtor must sign a written reaffirmation agreement and file it with the court in accordance with § 524(c) of the Bankruptcy Code. Reaffirmation agreements contain an extensive set of disclosures as more particularly described in § 524(k) of the Bankruptcy Code. Among other things, the disclosures must advise the debtor of the amount of the debt being reaffirmed and how it is calculated and that reaffirmation means that the debtor's personal liability for that debt will not be discharged in the Chapter 7 bankruptcy case. The disclosures also require the debtor to sign and file a statement of his or her current income and expenses which shows that the balance of income paying expenses is sufficient to pay the reaffirmed debt. If the balance is not enough to pay the debt to be reaffirmed, there is a presumption of undue hardship, and the bankruptcy court may decide not to approve the reaffirmation agreement. Unless the debtor is represented by an attorney, the bankruptcy judge must approve the reaffirmation agreement.
If the debtor was represented by an attorney in connection with the reaffirmation agreement, the attorney must certify in writing that he or she advised the debtor of the legal effect and consequences of the agreement, including a default under the agreement. The attorney must also certify that the debtor was fully informed and voluntarily made the agreement and that reaffirmation of the debt will not create an undue hardship for the debtor or the debtor's dependants. The Bankruptcy Code requires a reaffirmation hearing if the debtor has not been represented by an attorney during the negotiating of the agreement, or if the court disapproves the reaffirmation agreement. The debtor may repay any debt voluntarily, however, whether or not a reaffirmation agreement exists.
In the event you desire to reaffirm a debt and/or enter into a reaffirmation agreement, please plan to communicate that to your attorney at Tran Singh LLP, preferably during your initial consultation. The Engagement Letter and Fee Agreement which sets forth the terms of your representation in your Chapter 7 bankruptcy case provides that representation in reaffirmation agreements is not covered therein and will be provided under a separate engagement letter and fee agreement. Therefore, we encourage you to inform us such that we can structure your initial Engagement Letter and Fee Agreement to incorporate these services.
If the debtor decides to reaffirm a debt, he or she must do so before the discharge is entered. The debtor must sign a written reaffirmation agreement and file it with the court in accordance with § 524(c) of the Bankruptcy Code. Reaffirmation agreements contain an extensive set of disclosures as more particularly described in § 524(k) of the Bankruptcy Code. Among other things, the disclosures must advise the debtor of the amount of the debt being reaffirmed and how it is calculated and that reaffirmation means that the debtor's personal liability for that debt will not be discharged in the Chapter 7 bankruptcy case. The disclosures also require the debtor to sign and file a statement of his or her current income and expenses which shows that the balance of income paying expenses is sufficient to pay the reaffirmed debt. If the balance is not enough to pay the debt to be reaffirmed, there is a presumption of undue hardship, and the bankruptcy court may decide not to approve the reaffirmation agreement. Unless the debtor is represented by an attorney, the bankruptcy judge must approve the reaffirmation agreement.
If the debtor was represented by an attorney in connection with the reaffirmation agreement, the attorney must certify in writing that he or she advised the debtor of the legal effect and consequences of the agreement, including a default under the agreement. The attorney must also certify that the debtor was fully informed and voluntarily made the agreement and that reaffirmation of the debt will not create an undue hardship for the debtor or the debtor's dependants. The Bankruptcy Code requires a reaffirmation hearing if the debtor has not been represented by an attorney during the negotiating of the agreement, or if the court disapproves the reaffirmation agreement. The debtor may repay any debt voluntarily, however, whether or not a reaffirmation agreement exists.
In the event you desire to reaffirm a debt and/or enter into a reaffirmation agreement, please plan to communicate that to your attorney at Tran Singh LLP, preferably during your initial consultation. The Engagement Letter and Fee Agreement which sets forth the terms of your representation in your Chapter 7 bankruptcy case provides that representation in reaffirmation agreements is not covered therein and will be provided under a separate engagement letter and fee agreement. Therefore, we encourage you to inform us such that we can structure your initial Engagement Letter and Fee Agreement to incorporate these services.
CHAPTER 7 BANKRUPTCY DISCHARGE
The Chapter 7 bankruptcy petition is designed to result in a discharge of most of the debts you listed on your bankruptcy schedules. A discharge is a court order that says you do not have to repay your debts, but there are a number of exceptions. Debts which may not be discharged in your Chapter 7 bankruptcy case include, for example, most taxes, child support, alimony and student loans; court-ordered fines and restitution; debts obtained through fraud or deceptions; and personal injury debts caused by driving while intoxicated or taking drugs. Your discharge may be denied entirely if you, for example, destroy or conceal property; destroy, conceal or falsify records; or make a false oath. Creditors cannot ask you to pay any debts which have been discharged. You can only receive a Chapter 7 discharge once every 6 years.
If, following the 60 day period in which an objection to your Chapter 7 bankruptcy case may be raised, there are no objections, approximately two weeks thereafter, the bankruptcy court will enter a discharge order declaring that all of the dischargeable debts have been discharged (i.e. released, forgiven). At the same time the bankruptcy court issues the discharge order, it will also normally issue and order closing the case. The order closing the case is the last event that will occur in the case.
Please note that this applies in non-asset cases only; for Chapter 7 cases with non-exempt assets that the Chapter 7 Trustee will liquidate/sell, the timing will vary.
If, following the 60 day period in which an objection to your Chapter 7 bankruptcy case may be raised, there are no objections, approximately two weeks thereafter, the bankruptcy court will enter a discharge order declaring that all of the dischargeable debts have been discharged (i.e. released, forgiven). At the same time the bankruptcy court issues the discharge order, it will also normally issue and order closing the case. The order closing the case is the last event that will occur in the case.
Please note that this applies in non-asset cases only; for Chapter 7 cases with non-exempt assets that the Chapter 7 Trustee will liquidate/sell, the timing will vary.
DUTIES AND RESPONSIBILITIES OF A DEBTOR UNDER CHAPTER 7
As set forth above under "Process and Steps Before Filing for Chapter 7 Bankruptcy," in either a personal or corporate bankruptcy the debtor (or its representative(s)) has ongoing legal obligations to the Chapter 7 Trustee, the creditors and to the bankruptcy court. Failure to fulfill the obligations can result in a denial of discharge, revocation of discharge or criminal prosecution. It is a debtor's legal obligation to fully comply with all statutory requirements of Title 11 of the Bankruptcy Code. A debtor must advise the Chapter 7 Trustee if any of the conditions and circumstances stated below apply to you. Please note that the items illustrated below were pulled directly from the Duties and Responsibilities of a Debtor Under Chapter 7 which we recommend that you consult throughout your Chapter 7 bankruptcy case.
1. You must provide written notice to the Chapter 7 Trustee if you remember or become aware of any property (of any kind or value) that you owned or were entitled to at the date you filed your Chapter 7 bankruptcy that you forgot to list or that you did not become aware of until after you filed your Chapter 7 bankruptcy.
2. You must provide written notice to the Chapter 7 Trustee of any inheritance or monies that you receive or become entitled to as a result of a death that occurred either before you filed Chapter 7 bankruptcy or within the six (6) months after your Chapter 7 bankruptcy filing.
3. You must provide written notice to the Chapter 7 Trustee of any money or property you may receive as a result of a final divorce decree (excluding child support) that occurred either before you filed Chapter 7 bankruptcy or within six (6) months after the date you filed your Chapter 7 bankruptcy petition. A copy of the Divorce Decree and the Property Settlement Agreement or Agreement Incident to Divorce should be sent with the notice.
4. You must provide a written statement to the Chapter 7 Trustee regarding the status of any domestic support obligations you owe, i.e., the amount you owe; when it is owed; are you current or delinquent; if delinquent for how long and how much is owed; and the name and address to whom you pay domestic support obligations.
5. You must provide written notice to the Chapter 7 Trustee of any monies you may receive as a beneficiary of a life insurance policy or as a result of a death benefit plan that you acquire or become entitled to prior to the filing of Chapter 7 bankruptcy or within six (6) months after the date you filed your Chapter 7 bankruptcy petition.
6. You must turn over to the Chapter 7 Trustee any money that you receive as a result of rental properties that are not claimed as exempt.
7. You must provide written notice to the Chapter 7 Trustee of any leases, contracts or agreements that require you to provide services or property in the future that entitle you to compensation, services or property in the future.
8. You must turnover to the Chapter 7 Trustee the names and addresses of each and every party to whom any transfers, conveyances of gifts or your property that you made and that were not scheduled and that were made within one (1) year prior to the date you filed Chapter 7 bankruptcy.
9. You must provide written notice to the Chapter 7 Trustee of all debts repaid within the year prior to filing Chapter 7 bankruptcy. You need not advise the Chapter 7 Trustee of debt repayments that are properly scheduled or if the total amount of the debt was less than $1,000.00.
10. You must provide written notice to the Chapter 7 Trustee of any tax refund in excess of $2,500.00 you anticipate receiving or actually receive.
11. Please be aware that you remain responsible for filing your own personal income tax return. You should inform your tax advisor of the filing of your Chapter 7 bankruptcy petition, as it affects your own personal tax return. If necessary for the administration of the bankruptcy estate, the Chapter 7 Trustee will request copies of pre-petition tax returns. If you believe that you need to amend a pre-petition tax return, you must notify the Chapter 7 Trustee in writing.
12. CORPORATE OR PARTNERSHIP DEBTORS ONLY. In order to comply with the Federal Income Tax Laws applicable to a Chapter 7 bankruptcy estate, you must give the Chapter 7 Trustee copies of your last two (2) income tax returns. If you are not current in your tax filings, please advise the Chapter 7 Trustee and provide copies of the two (2) most recent returns, regardless of the year. You are responsible for filing all required unfiled tax returns.
13. CORPORATE DEBTORS ONLY. Debtor's Representatives must advise the Chapter 7 Trustee in writing of all bank accounts owned by the corporation, both open and closed, on the day of filing the Chapter 7 bankruptcy petition, including the name and address of the bank, account numbers, and who is authorized to withdraw on the account. This is property of the estate from the date of the Chapter 7 bankruptcy petition filing and no withdrawals should be made by anyone after such date. You must promptly advise the Chapter 7 Trustee of any post-petition withdrawals and provide the Chapter 7 Trustee with a complete accounting of those transactions.
14. You are required to file and complete your statement as to your intention concerning secured consumer debt. The Chapter 7 Trustee will assume that you have done so within the time provided unless you advise the Chapter 7 Trustee in writing to the contrary, and state your plans to remedy any default.
15. Pursuant to the rules regarding electronic filing, you are required to provide the Chapter 7 Trustee as least ten (10) days prior to your scheduled 341 Meeting, with a copy of your schedules, statement of financial affairs, means test form, certificate of credit counseling, two years of tax returns, the bank statements for the two months prior to the Chapter 7 bankruptcy petition filing including the month of filing and proof of income for the 60 days prior to filing. Failure to provide this information within ten (10) days in advance of the first 341 Meeting will cause your meeting to be reset. Additionally, if you fail to provide these documents it could result in dismissal of your case.
16. You are required to appear and attend your 341 Meeting. The clerk of the U.S. Bankruptcy Court provides notice of this meeting. If you have not received notice of your meeting within 20 days after your Chapter 7 bankruptcy case is filed, contact your attorney at Tran Singh LLP. The 341 Meeting can only be rescheduled as a result of an emergency or an unavoidable or unforeseen conflict. Work related conflicts must be resolved by the debtor. Travel and/or vacation plans are not grounds for rescheduling. If you are not represented by counsel, requests for a new date and time must be in writing and received more than 15 days prior to your scheduled 341 Meeting and you must provide a statement as to the nature of the emergency or conflict. It is in the Chapter 7 Trustee's sole discretion as to whether a reset date and time will be given. You or your attorney will be responsible for re-noticing all creditors of the date and time of the reset. Do not call the Chapter 7 Trustee and ask for a reset.
17. You must bring picture identification issued by a governmental authority, such as a driver's license and your social security card. If you do not have a social security card, you must bring a pay stub, Form W-2, 1099 or other documents not created by you with the complete number. Your tax return is not sufficient. Failure to bring proper identification or proof of social security will cause your 341 Meeting to be reset.
18. If your 341 Meeting is reset, you and your attorney must sign and file with the bankruptcy court a written statement that the reset date is the new date for the first 341 Meeting, and that you agree and acknowledge that all deadlines associated with the date set for the first 341 Meting run from the new date.
19. Do not contact the Chapter 7 Trustee or the Chapter 7 Trustee's Office if you are represented by counsel. The Chapter 7 Trustee and the Chapter 7 Trustee's Office cannot provide you with legal advice. if you need to request information, you or your attorney must do so in writing. You must provide your name, case number and current address when making such request. If you do not receive a copy of your discharge contact your attorney or the clerk of the U.S. Bankruptcy Court, the Chapter 7 Trustee does not issue the discharge.
20. You must swear under oath that you have read the Duties and Responsibilities of a Debtor Under Chapter 7 and have complied with all of its provisions. If you have any questions regarding any of the duties or statements made, you or your counsel should address those to the Chapter 7 Trustee at the 341 Meeting or in a written request.
1. You must provide written notice to the Chapter 7 Trustee if you remember or become aware of any property (of any kind or value) that you owned or were entitled to at the date you filed your Chapter 7 bankruptcy that you forgot to list or that you did not become aware of until after you filed your Chapter 7 bankruptcy.
2. You must provide written notice to the Chapter 7 Trustee of any inheritance or monies that you receive or become entitled to as a result of a death that occurred either before you filed Chapter 7 bankruptcy or within the six (6) months after your Chapter 7 bankruptcy filing.
3. You must provide written notice to the Chapter 7 Trustee of any money or property you may receive as a result of a final divorce decree (excluding child support) that occurred either before you filed Chapter 7 bankruptcy or within six (6) months after the date you filed your Chapter 7 bankruptcy petition. A copy of the Divorce Decree and the Property Settlement Agreement or Agreement Incident to Divorce should be sent with the notice.
4. You must provide a written statement to the Chapter 7 Trustee regarding the status of any domestic support obligations you owe, i.e., the amount you owe; when it is owed; are you current or delinquent; if delinquent for how long and how much is owed; and the name and address to whom you pay domestic support obligations.
5. You must provide written notice to the Chapter 7 Trustee of any monies you may receive as a beneficiary of a life insurance policy or as a result of a death benefit plan that you acquire or become entitled to prior to the filing of Chapter 7 bankruptcy or within six (6) months after the date you filed your Chapter 7 bankruptcy petition.
6. You must turn over to the Chapter 7 Trustee any money that you receive as a result of rental properties that are not claimed as exempt.
7. You must provide written notice to the Chapter 7 Trustee of any leases, contracts or agreements that require you to provide services or property in the future that entitle you to compensation, services or property in the future.
8. You must turnover to the Chapter 7 Trustee the names and addresses of each and every party to whom any transfers, conveyances of gifts or your property that you made and that were not scheduled and that were made within one (1) year prior to the date you filed Chapter 7 bankruptcy.
9. You must provide written notice to the Chapter 7 Trustee of all debts repaid within the year prior to filing Chapter 7 bankruptcy. You need not advise the Chapter 7 Trustee of debt repayments that are properly scheduled or if the total amount of the debt was less than $1,000.00.
10. You must provide written notice to the Chapter 7 Trustee of any tax refund in excess of $2,500.00 you anticipate receiving or actually receive.
11. Please be aware that you remain responsible for filing your own personal income tax return. You should inform your tax advisor of the filing of your Chapter 7 bankruptcy petition, as it affects your own personal tax return. If necessary for the administration of the bankruptcy estate, the Chapter 7 Trustee will request copies of pre-petition tax returns. If you believe that you need to amend a pre-petition tax return, you must notify the Chapter 7 Trustee in writing.
12. CORPORATE OR PARTNERSHIP DEBTORS ONLY. In order to comply with the Federal Income Tax Laws applicable to a Chapter 7 bankruptcy estate, you must give the Chapter 7 Trustee copies of your last two (2) income tax returns. If you are not current in your tax filings, please advise the Chapter 7 Trustee and provide copies of the two (2) most recent returns, regardless of the year. You are responsible for filing all required unfiled tax returns.
13. CORPORATE DEBTORS ONLY. Debtor's Representatives must advise the Chapter 7 Trustee in writing of all bank accounts owned by the corporation, both open and closed, on the day of filing the Chapter 7 bankruptcy petition, including the name and address of the bank, account numbers, and who is authorized to withdraw on the account. This is property of the estate from the date of the Chapter 7 bankruptcy petition filing and no withdrawals should be made by anyone after such date. You must promptly advise the Chapter 7 Trustee of any post-petition withdrawals and provide the Chapter 7 Trustee with a complete accounting of those transactions.
14. You are required to file and complete your statement as to your intention concerning secured consumer debt. The Chapter 7 Trustee will assume that you have done so within the time provided unless you advise the Chapter 7 Trustee in writing to the contrary, and state your plans to remedy any default.
15. Pursuant to the rules regarding electronic filing, you are required to provide the Chapter 7 Trustee as least ten (10) days prior to your scheduled 341 Meeting, with a copy of your schedules, statement of financial affairs, means test form, certificate of credit counseling, two years of tax returns, the bank statements for the two months prior to the Chapter 7 bankruptcy petition filing including the month of filing and proof of income for the 60 days prior to filing. Failure to provide this information within ten (10) days in advance of the first 341 Meeting will cause your meeting to be reset. Additionally, if you fail to provide these documents it could result in dismissal of your case.
16. You are required to appear and attend your 341 Meeting. The clerk of the U.S. Bankruptcy Court provides notice of this meeting. If you have not received notice of your meeting within 20 days after your Chapter 7 bankruptcy case is filed, contact your attorney at Tran Singh LLP. The 341 Meeting can only be rescheduled as a result of an emergency or an unavoidable or unforeseen conflict. Work related conflicts must be resolved by the debtor. Travel and/or vacation plans are not grounds for rescheduling. If you are not represented by counsel, requests for a new date and time must be in writing and received more than 15 days prior to your scheduled 341 Meeting and you must provide a statement as to the nature of the emergency or conflict. It is in the Chapter 7 Trustee's sole discretion as to whether a reset date and time will be given. You or your attorney will be responsible for re-noticing all creditors of the date and time of the reset. Do not call the Chapter 7 Trustee and ask for a reset.
17. You must bring picture identification issued by a governmental authority, such as a driver's license and your social security card. If you do not have a social security card, you must bring a pay stub, Form W-2, 1099 or other documents not created by you with the complete number. Your tax return is not sufficient. Failure to bring proper identification or proof of social security will cause your 341 Meeting to be reset.
18. If your 341 Meeting is reset, you and your attorney must sign and file with the bankruptcy court a written statement that the reset date is the new date for the first 341 Meeting, and that you agree and acknowledge that all deadlines associated with the date set for the first 341 Meting run from the new date.
19. Do not contact the Chapter 7 Trustee or the Chapter 7 Trustee's Office if you are represented by counsel. The Chapter 7 Trustee and the Chapter 7 Trustee's Office cannot provide you with legal advice. if you need to request information, you or your attorney must do so in writing. You must provide your name, case number and current address when making such request. If you do not receive a copy of your discharge contact your attorney or the clerk of the U.S. Bankruptcy Court, the Chapter 7 Trustee does not issue the discharge.
20. You must swear under oath that you have read the Duties and Responsibilities of a Debtor Under Chapter 7 and have complied with all of its provisions. If you have any questions regarding any of the duties or statements made, you or your counsel should address those to the Chapter 7 Trustee at the 341 Meeting or in a written request.
NOTICE REGARDING MORTGAGE PAYMENTS AND/OR INSTALLMENT LOANS
If, prior to filing your Chapter 7 bankruptcy petition, your mortgage payments and/or installment loan payments (i.e., car note) were scheduled to be automatically drafted from your account, please be aware that the mortgage company and/or finance company will stop automatically pulling your payments upon receiving notice of your Chapter 7 bankruptcy petition. Regardless of whether you receive a monthly statement, you remain obligated to make your monthly mortgage payment and/or installment loan payment. We recommend that you maintain copies of your payments. Failure to continue payments in the ordinary course could result in the creditor (i.e., mortgage company and/or finance company) filing a Motion to Lift the Stay and commence foreclosure proceedings (in the case of your home) or repossession (in the case of your automobile).
NOTICE REGARDING SOLICITATION LETTERS
It is common after you file for Chapter 7 bankruptcy petition to begin receiving solicitation letters. Particularly, we want to make you aware that the company financing your automobile loan will cease reporting your monthly payments to all credit bureaus upon receipt of notice of the filing of your Chapter 7 bankruptcy petition. Therefore, it is common that local dealerships will send you solicitation letters with offers for a new car. This is a typical occurrence in Chapter 7 bankruptcy filings.
It is important to make you aware that any pertinent information about your Chapter 7 bankruptcy case will either come from the Bankruptcy Court or your attorneys at Tran Singh LLP.
It is important to make you aware that any pertinent information about your Chapter 7 bankruptcy case will either come from the Bankruptcy Court or your attorneys at Tran Singh LLP.