98 Bankruptcy

Q: I need to file for Bankruptcy as soon as possible as collectors from various credit cards are really harassing me. I lost my job and I simply cannot pay the credit card bills. I barely have enough money to pay my rent and my food and I cannot pay for anything absolutely essential at this time. What do I need to do?
A: You have to complete credit counseling before you file for bankruptcy. A certificate of completion will need to be filed with the bankruptcy. After you file bankruptcy, but before you get discharged by the Bankruptcy Court, you will need to go through a debtor’s credit handling education course. These are required by new Bankruptcy laws, set up in 2005. To be honest, I consider the pre-bankruptcy requirement totally useless, apparently designed to make the debtor spend more money to get credit counseling that comes much too late. However, the credit handling education course required post bankruptcy filing may turn out to be helpful in many cases. The counseling and the educational course may be obtained from online services that can also provide the counseling and educational requirement via telephone. It is inexpensive (approximately $30 to $40, depending whether for a single person or a couple). After going through the credit counseling, you will need to fill out a bankruptcy questionnaire. I would not advise you to do this alone. An attorney can help you through the process and better prepare you to appear for your 341 hearing, also known as a “debtor’s examination”. This hearing takes place approximately 4 weeks after you file your papers with the Bankruptcy Court. The examiner conducting the hearing is called a Bankruptcy Trustee. He/she is a person hired by the Bankruptcy Court to establish whether your “estate” can pay your debts. Your estate (the sum of your assets) is entitled to exemptions, items of your estate exempt up to a certain amount of money from being sold to pay your creditors. If you have more equity in certain household items than you are entitled to keep as exemption, the Trustee may force you to sell that item, or more likely, to pay the difference between the amount of equity and the exempted amount to your creditors. By the way, I would not advise you to transfer your house, your car or the funds in your bank account to your mother or your sister just before you file for bankruptcy. These are fraudulent transfers and the Trustee will found out. This may simply cause you not to get discharged.
There are other transfers, such as a payment to one creditor for more than $500 that may be reversed by the Trustee. If such a payment has been made within 90 days from the date of the filing of your bankruptcy, it may be viewed as “preferential treatment” of one creditor over another creditor. Again, Bankruptcy laws are complicated and it is not a good idea to go it alone if you have already decided to go that route.

I will be happy to provide a half-hour bankruptcy consultation for the discounted price of $50 (my normal consultation fee is $75 for a half hour). I do not charge that fee if you retain my services to represent you.

Maxine de Villefranche