Posts Tagged ‘bankruptcy estate’

What property do I include on my petition?

Wednesday, September 15th, 2010

In order for you to be granted relief from your debts by filing for bankruptcy, you are going to have to disclose every property interest you own or are entitled to receive.   These disclosures will be made in your bankruptcy petition.

Living room setWhen you file the bankruptcy petition with the court, your bankruptcy estate is automatically created.  Your property interests include all personal property, all real property, and any other interest in property you might own at the time the bankruptcy petition is filed.  Property of the estate is not limited to property located in the United States.  If you have property anywhere in the world, that property is part of your bankruptcy estate.

Generally, the bankruptcy estate’s interest in property is no greater than the debtor’s interest at the time of the filing of the bankruptcy petition.  The primary exception to this rule is for property recovered by the bankruptcy trustee by use of the trustee’s avoidance powers.  These powers enable the bankruptcy trustee to undue certain transfers of property and payments to creditors that occur before the bankruptcy petition is filed.  Another common exception to this rule includes property acquired by the debtor within 180 days of the petition filing by any of the following means: inheritance, property settlement agreement with the debtor’s spouse, or life insurance policy payout.

Much, if not all, of the property comprising your bankruptcy estate will be protected from creditors and will be yours to keep once the administration of your case is complete.  Before filing your petition, your attorneys will explain to you what property is protected and what, if any, is not.  Your attorney’s goal is to eliminate any unpleasant surprises that could arise in your bankruptcy case.

* Acknowledgment for “The Pug Father” at http://www.flickr.com/photos/fleur-design/1394346975/ for use of his photo.

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What is a Meeting of Creditors in a chapter 7 bankruptcy case?

Monday, September 13th, 2010

The Meeting of Creditors, also known as a “341 meeting,” is an administrative meeting that each person who files a bankruptcy petition is required to attend.  The meeting is held in New Haven, Connecticut and is scheduled between 30 and 45 days following the bankruptcy petition’s filing date.  The meeting itself usually takes between 5 and 10 minutes to complete.  Is it fun?  No.  However, with proper preparation, it should be short and painless.

In addition to the person who filed the chapter 7 bankruptcy petition, the meeting is also attended by the debtor’s attorney and the chapter 7 bankruptcy trustee.  Although creditors rarely attend the meetings, they are notified of the meeting and do have the right to attend.

The bankruptcy trustee is usually a bankruptcy attorney who is hired by the Office of the United States Trustee.  In addition to administrative duties, the bankruptcy trustee is responsible for collecting and selling any unprotected property held by the bankruptcy estate and then distributing the proceeds to creditors.

The bankruptcy trustee will ask the debtor a series of questions about events leading up to the bankruptcy filing and the bankruptcy estate.  All answers must be truthful and as accurate as possible.  The debtor gives all answers under penalty of perjury.  Giving false statements at the meeting of creditors is a crime and every year, some dummy goes to jail for trying to cheat the system.  Don’t be that dummy.

The Law Office of George H. Weber, LLC will prepare you for the meeting.  Either in person or over the phone, your attorney will give you an idea of the questions you will be asked at the meeting.  You will then practice answering the questions with your attorney so that you will feel as comfortable as possible when your meeting takes place.  With proper preparation, there should be no surprises.  Our goal is to make the entire process as efficient and stress-free as possible.

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Careful with Those Retirement Savings!

Monday, April 5th, 2010

If you’re thinking about dipping into your retirement accounts to pay off your credit cards, think again. Even if your lenders agree to take only 50 cents on the dollar to settle your debt, understand what you are giving up when you make such an agreement.
Many IRAs and other retirement plans are protected, or what we call “exempt property,” in bankruptcy. This means that while they are listed as assets on your bankruptcy petition, the bankruptcy trustee will not look at it as an asset to distribute to creditors. Under certain circumstances, your retirement will be fully protected in a bankruptcy while your credit card debts are be fully discharged. While it depends upon the particular facts of your case, the potential for substantial debt relief is real.
Before you act, know whether you’ll have to pay any penalties or fees for taking out from your retirement funds to make debt settlement payments. Also, any debt that is “forgiven” by a lender is reported to the IRS, and can result in additional tax liability. However, debt discharged through bankruptcy is excluded from the general rule for reporting canceled debt as income.
Consider all of your options and all of the costs involved before you embark on a debt management plan. Attorney Weber, at the Law Office of George H. Weber, LLC can review your situation during a free consultation and advise you as to your options, and the consequence, of a variety of debt relief options.
If you’re thinking about dipping into your retirement accounts to pay off your credit cards, think again. Even if your lenders agree to take only 50 cents on the dollar to settle your debt, understand what you are giving up when you make such an agreement.

Many IRAs and other retirement plans are protected, or what we call “exempt property,” in bankruptcy. This means that while they are listed as assets on your bankruptcy petition, the bankruptcy trustee will not look at it as an asset to distribute to creditors. Under certain circumstances, your retirement will be fully protected in a bankruptcy while your credit card debts will be fully discharged. While it depends upon the particular facts of your case, the potential for substantial debt relief is real.

Before you act, know whether you’ll have to pay any penalties or fees for taking out from your retirement funds to make debt settlement payments. Also, any debt that is “forgiven” by a lender is reported to the IRS, and can result in additional tax liability. However, debt discharged through bankruptcy is excluded from the general rule for reporting canceled debt as income.

Consider all of your options and all of the costs involved before you embark on a debt management plan. Attorney Weber, at the Law Office of George H. Weber, LLC can review your situation during a free consultation and advise you as to your options, and the consequence, of a variety of debt relief options.

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Posted in Credit Card Debt, Retirement Savings | No Comments »