Recent Posts in Court Category

Leave it there.

An individual filing a chapter 7 bankruptcy case you may be able to exempt up to $11,200 ($22,400 for a married couple) of cash and bank deposits.

If the money is exempt it will not be touched by the bankruptcy court, trustee, or your creditors. Simply put you can keep.

If you are filing a chapter 13 case there is no liquidation of your assets, unless you want there to be, so here again you can keep the money in your bank.

If you have cash and bank deposits that exceed the exemptions, fear not, you may be able to protect some of the non-exempt money by placing it into an IRA or putting a new roof on your home. I strongly encourage you to meet with a lawyer prior to planning any exemption.

The goal for most individuals in bankruptcy is to receive a discharge of their debts. A discharge is a release of your legal obligation to repay your debt. With limited exception the discharge will discharge all your debt including credit card bills, medical bills, auto loans, home mortgages, and some tax obligations.

Some debts do not typically get discharged in bankruptcy including student loans, some tax obligations, child support, alimony and government or court fines (such as a speeding tickets).

The discharge does not typically affect a lien held on property. Therefore in order to for the debtor to keep property that has been used as collateral to secure a loan, the debtor must continue to make payments.

Some liens can be removed in bankruptcy. Liens held by the second mortgage can be removed, in this case the debtor will be able to keep their home and never again have to pay the second mortgage.

Judicial liens can also be removed. These are liens that have come out of a court action. Typically these occur after a credit card company has sued you over a debt and then they put a lien on your home.  

In all bankruptcy cases there will be a required meeting this is often called the “meeting of the creditors” or the “§341 meeting.” The Case Trustee will conduct the meeting. She represents the interests of all the creditors in the case and is also in charge of administering the debtor’s bankruptcy estate.

All of the Debtor’s creditors are invited to attend the meeting. However, it is very unlikely that a creditor will appear at the meeting in consumer cases. Almost all creditors are satisfied that the Case Trustee will properly examine the Debtor.

In consumer cases the meeting last only 5 – 15 minutes. Typically attendees of the meeting include the Debtor, Debtor’s attorney, and the Case Trustee. During the meeting the Case Trustee will ask the Debtor several questions regarding her financial affairs. The purpose of the examination is to ensure that the Debtor has fairly and honestly represented her assets, income, and debts in the bankruptcy filing.

Typical questions the Case Trustee may ask the Debtor include:

• “Did you review your bankruptcy filing with your lawyer prior to authorizing him to file it?”

• “Have you listed all your assets in your bankruptcy filing?”

• “Could you sue someone for any reason, including a personal injury claim?”

• “Have you given anything worth more than $1,000 to anyone in the last year?”

• “Have you bought or sold any property in the last year worth more than $1,000?”

• “Have you made any one single payment to a creditor of more than $600 in the last 90 days?”

·         “Do you expect to receive any inheritance?”

Currently in Massachusetts the meetings are not held in the Court House. A judge is never present, no one is called to a witness stand, and it is not adversarial in nature. The meetings are an informal and open process.

With the snow that fell this weekend I cannot help but think now may be a good time to mention what happens if a debtor cannot make their assigned time and date for their §341 meeting.

The §341 meeting is often the only meeting a debtor has to attend; they are not a formal Court process and are not held before a judge or even at the Court House. The §341 meeting gives the Case Trustee and others a chance to ask questions about the debtor’s financial affairs.

It is uncommon for anyone other than case trustee and the debtor’s lawyer to be present during the §341 meeting in consumer cases. The meetings are typically short lasting only 5 – 10 minutes for chapter 7 cases and about 15 minutes for chapter 13 cases.

When your bankruptcy case is filed, the Court will automatically assign your case a Case Trustee (who represents the creditors) and a time for the meeting.

If for some reason you are unable to make the scheduled meeting time then you can request that your case trustee reschedule the meeting. The case trustee will give you a new time and date. The debtor, typically through her lawyer, will have to send notice (a letter) to all the creditors stating the new time and date of the meeting. Of course the more notice you can give the case trustee about your need to reschedule the better, however, in the case of an emergency or inclement weather you may not be able to give the case trustee much notice at all.

Warm wishes.

Robert

Attorney Hoffman was recently selected to replace retiring Judge Rosenthal. Attorney Hoffman will have to undergo an FBI background check before taking the bench. Judge Rosenthal will be missed by many but I am excited about the appointment of Judge Hoffman.