What Happens at my 341 Hearing?

After filing for chapter 7 or chapter 13 bankruptcy several events will need to take place before you can receive a discharge. The most important event you should be aware of is the 341 hearing, also known as the meeting of creditors. This event will take place 30 days after you file, and is a meeting between you and the bankruptcy trustee assigned to your case. The gist of the meeting is for the trustee to confirm that the financial details you’ve listed when filing for bankruptcy are accurate, just to make sure that you aren’t fraudulently excluding creditors or lying about how much property you own and what it’s worth. In chapter 13 cases specifically trustees will also ask you about your ability to make payments on the debt repayment plan as a part of your hearing. As well as verifying information, the trustee will make sure you understand the consequences of filing for bankruptcy, including its effects on your credit, your ability to file under another chapter (if applicable), what happens when you receive a discharge, and what happens if you reaffirm a debt. The hearing takes at most half an hour, and in the majority of bankruptcy cases it will be the only time you have to attend a hearing.

To better understand if filing for bankruptcy is the right action for you to take, it would be to your benefit to schedule a consultation with a local bankruptcy attorney.

Do I Have to File for Bankruptcy with my Spouse?

If you want to file for bankruptcy individually you are certainly able to, but the nature of your case will depend on if your spouse lives in the same house you do. The means test, which determines the chapter under which you are able to file, will need to consider your non-filing spouse’s income if they reside in the same house as you. The courts won’t need any other identifying factors like social security number from your non-filing spouse outside of both of your income and both of your expenses. If your non-filing spouse does not live in the same house you do, you will be listed as being married but being solely responsible for the income of your particular household. The bankruptcy court must be notified that your non-filing spouse is not living in the same house you are.

To better understand if filing for bankruptcy is the right action for you, it is recommended that you set up an appointment with a local bankruptcy attorney.

Smart Money: Your Tax Return Could be a Ticket to Financial Freedom

This tax season, the average American taxpayer is receiving a $3,000 return. What

will you spend your tax return on this spring? Studies have shown that 43% of

Americans put their tax return into savings, 36% put the money towards paying off

their debt, 10% put money towards vacation, 6% purchase a luxury item, and 5%

make a necessary purchase, such as a house or car. While all are worthy ways to

spend money, paying off your debt could be the best investment you can make

with your tax return if you are in debt. Carrying around high-interest debt, with

interest compounding against you every month can be especially stressful. Surveys

tell us that debt is the most common cause of financial stress in the United States.

Your tax return could be a ticket to financial freedom.

If you have excessive amounts of debt that you are struggling to pay off, you could

spend your tax return most efficiently by putting the money towards filing for

bankruptcy. Bankruptcy offers the opportunity for you to get caught up on mortgages

or car loans without the threat of repossession or foreclosure and sometimes you can

be relieved from the legal obligation to pay some debts. To better understand if this

is something worthy of investing your tax return in, set up a consultation with your

local bankruptcy attorney to learn more.

After Bankruptcy: What is Next?

Bankruptcy gives you a fresh start in your financial life. But once you’ve received
your discharge from your bankruptcy, you may not know exactly what steps to do
moving forward.

1. Collect and file all your bankruptcy paperwork

Be sure to keep a copy of your bankruptcy petition, the 40-50 page document that
details your financial information. Also keep your notice of bankruptcy filing  as
well as a copy of your discharge order that you received from the court.

Why should you do this? Sometimes when lenders are considering you for new
credit, they want to see your bankruptcy papers. It is also important to keep these
documents in case anyone wants to collect on your old debt in the future.

2. Start a budget and review it frequently

Many bankruptcies begin as a result of unforeseen medical expenses, job losses,
or sudden family changes such as divorces or birth of children. Creating a budget
allows you to prepare and set goals for the future. There are many great budgeting
tools you can access through apps on your phone.

3. Start an emergency fund

As part of starting a budget, you will want to designate some funds for
unforeseeable emergency financial events. This fund could even turn into
retirement savings or college tuition savings in the future.

Why should you do this? This fund will prevent you from creating new debt when
emergencies
arise. This fund will also make you feel less anxious about your finances and
prevent panic when emergencies happen.

4. Think about ways to improve your credit

Fresh out of your bankruptcy, you will have little to no debt. This is a great
opportunity to build your credit. However, be careful not to let yourself get carried
away. Begin with a small credit limit, monitor your charges, and pay more than
just the minimum amount every month. Another opportunity for building credit is
by investing in a secured-CD.

5. Explore financial management resources in the area

Because bankruptcy allows a fresh start on your financial life, it never hurts to
learn more tips and tricks to navigating personal finance in the future. You can check
out free seminars offered by local non-profits or community colleges.

Discharging Student Loans

If you are looking to discharge your student loans, it is a complex process,
but not impossible.After 1990, student loans are no longer considered
“dischargeable.” This means that in order to seek relief, an adversary
proceeding is required--a lawsuit must be filed separate from the bankruptcy
case. You must prove that the payment on your student loans causes an undue

hardship. Most courts use the Brunner test to measure the burden of the debt.
It is a three-pronged evaluation that requires the following: 1) the individual
and their dependents cannot maintain a minimal standard of living if they
were required to pay the student loan,2) there must be additional factors that
guarantee this poor standard of living will continue throughout the whole
payment period, and 3) the individual has made good faith effort to pay the
loans. If you can demonstrate that you meet these conditions, your student loan

could be cancelled as a whole.

There are advantages and disadvantages to discharging student loans. To better
understand if filing for an adversary proceeding is for you, it is recommended
that you set up a consultation with your local bankruptcy attorney.

Should Bankruptcy Be Filed Jointly?

In most circumstances it is better for both a husband and wife to file jointly for bankruptcy.  The filing fees for a joint filing are the same as an individual filing and the married couple gets the benefit of having the debt of both spouses dismissed, instead of just one.  It is also very common that spouses share debt ownership on major purchases, such as homes and automobiles.  Spouses that do not file, could remain liable as a co-debtor for a portion of their husband’s/wife’s debut.  

There are some exceptions to this general guideline in which it is better for an individual to file separately.  Some examples can be related to timelines (if the other spouse has previously filed for bankruptcy and not enough time has passed)and property protection (exemptions).

To find out if a joint bankruptcy filing would be right for your spouse and you, it is recommended to set up a consultation with a local bankruptcy attorney.

Chapter 13 Bankruptcy Payment Plans

Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy offers an individual the opportunity to pay back a portion of, or all of, their creditors through a payment plan agreed upon by the individual, the attorney, and the bankruptcy Trustee.  Payment plans are constructed by the individual and the attorney based upon the filer’s income level, monthly budget, and level of debt to be repaid.  It should also be noted that Chapter 13 bankruptcies are often viewed as more favorable by future creditors as it shows a willingness to pay back a portion of one’s obligations.  

To find out if a Chapter 13 bankruptcy would be right for your circumstances, it is recommended to set up a consultation with a local bankruptcy attorney.