In both Chapter 7 and Chapter 13 cases, each debtor must attend a “meeting of creditors”. The name implies that all the creditors will attend that meeting. However, only a few of the secured creditors normally attend. The hearings are generally held at the Hancock Bank building in Gulfport, Mississippi on the 9th Floor. The location of the meeting depends upon the county in which the debtor resides on the date of filing of the Bankruptcy. At the hearing, the trustee will ask the debtor some basic questions about information in the schedules (papers filed with the bankruptcy petition). In a Chapter 13, the trustee will review the Chapter 13 Plan and determine if payments have been made pursuant to the plan. Secured creditors that attend may inquire as to insurance on the collateral, how they are being treated in the chapter 13 plan or whether or not the collateral will be surrendered in a chapter 7.
One of our attorneys will attend the meeting of creditors with you and we will provide you with the normal questions you will be asked at that meeting.
In some cases (more often in reorganization cases such as chapter 13), a hearing to resolve a dispute will be held and a debtor will be required to attend that hearing. However, most disputes are resolved or settled without the necessity of a hearing. If a hearing is required, then one of our attorneys will help you prepare for that hearing and will also attend the hearing with you.
As a general rule, most unsecured debts will be discharged in a chapter 7 and the portion which was not paid pursuant to the chapter 13 plan will be discharged in a chapter 13. An unsecured debt is a debt where the creditor is not holding any collateral or security to enforce payment of the debt. The most common examples of unsecured debts are credit cards/credit lines, medical bills, and utility bills.
About 3 months after the Chapter 7 meeting of creditors, each debtor will receive a notice in the mail indicating that their debts have been discharged. This discharge, however, will not include secured debts to be reaffirmed, and any non-dischargeable debts (See Above). If a creditor objects to discharge of a debt or other litigation is filed, the discharge may be delayed.
In a Chapter 13 the case is audited after receipt of the final plan payment to make sure that the debts were paid in the manner that was set out in the plan. Afterwards, the trustee sends a notice to the bankruptcy court, which in turn mails a discharge notice to all creditors and the debtor. This usually occurs about 3 months after the last payment is made.
Pre-filing bankruptcy certification:
The amendments to the Bankruptcy Code added a requirement for all individuals that file a bankruptcy case must go through a pre-bankruptcy credit counseling session. Many people assume that the credit counseling will be a long, drawn out course that takes several days or weeks. However, the session generally lasts approximately one hour and can take less time than that. The session can be completed by telephone or by internet with any one of numerous credit counseling agencies that have been approved to offer the pre-filing credit counseling course. The primary reason for the pre-filing session is to make sure that everyone that files a bankruptcy case knows that there are other options that they may want to consider before making the final decision to file. The costs varies, but many companies charge $10.00 or less when the certification is performed via the internet.
After filing or pre-discharge bankruptcy education (sometimes called a Financial Management Course).
The bankruptcy education must be completed before an individual is entitled to receive a discharge in a chapter 7 and in a chapter 13 case. The course generally takes about 2 hours and as in the pre-filing course, it can be completed by telephone or by internet.
Our staff will help you determine whether you would like to take each course by internet or by telephone and if you want to take it by internet. If you do not have internet access, you can use a computer that we have set up especially for our clients.
There are particular situations where a married couple may not need for both spouses to file bankruptcy. Examples are:
However, the income of both husband and wife is considered to determine if the filing spouse is entitled to file a chapter 7 or how long a chapter 13 plan must be and the amount of the plan payment. But the expenses of the entire family will also be considered.
If you are separated from your spouse, you will have not have to provide income information about your spouse’s income to determine if you qualify for a chapter 7. However, his or her income may be considered to determine the length of a chapter 13 plan.
The short answer is no in most cases. Since a credit report is an individual matter, one person can have a very good credit score while his wife’s or her husband’s credit score is very low. When a credit check is performed by a lender or bank or by a department store, the check is perfomed on one person based upon his or her credit history and his or her social security number. Thus, a bankrupcy by one spouse will not show up on his wife’s or her husband’s credit score.
This is the case even if the married couple have joint debts as long as the non-filing spouse stays current on his or her debts. However, if there is a co-signed debt and after one person files, his or her spouse does not pay the debt timely, then that debt is shown as being paid late on the credit report which will adversely effect non-filing spouse’s credit score.
The most important thing to keeping a high credit score is not over extending one’s monthly payment obligations and paying all debts timely. So many times we find that if a husband or wife is considering bankruptcy, then the couple will be better off by filing jointly to get a fresh start for the both of them. This is especially true since the cost of filing a bankruptcy is usually the same for a husband and wife filing as a couple as it would be for one of them to file by himself or herself.
Another mistake we find people making is assuming that bankruptcy will hurt their credit when that person’s credit is already in very bad shape. For example: multiple finance company loans (by refinancing with the same loan company over and over) and maxed out credit cards have already seriously hurt a person’s credit score and that person does not realize that has happened.