It’s wise to do some research when choosing a credit counseling organization. If you are in search of credit counseling to fulfill the bankruptcy law requirements, make sure you receive services only from approved providers for your judicial district. Check the list at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm or at the bankruptcy clerk’s office for the district where you will file. Once you have the list of approved organizations in your judicial district, call several to gather information before you make your choice. Some ...Continue → Share
A pre-bankruptcy counseling session with an approved credit counseling organization should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online. The counseling organization is required to provide the counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee ...Continue → Share
The U.S. Trustee Program promotes strength in the nation’s bankruptcy system by enforcing bankruptcy laws, providing oversight of private trustees, and maintaining operational excellence. The Program has 21 regions and 95 field offices, and oversees the administration of bankruptcy in all states except Alabama and North Carolina. For more information – www.usdoj.gov/ust.
If you have concerns about approved credit counseling agencies or debtor education courses, such as the failure to provide good service, please contact the U.S. Trustee Program by ...
A debtor education course by an approved provider should include information on developing a budget, managing money, using credit wisely, and other resources. Like pre-filing counseling, debtor education may be provided in person, on the phone, or online. The debtor education session might last longer than the pre-filing counseling – about two hours – and the typical fee is between $50 and $100. As with pre-filing counseling, if you are unable to pay the session fee, you should seek a ...Continue → Share
As a rule, pre-bankruptcy credit counseling and pre-discharge debtor education may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtor education must take place after you file.
In general, you must file a certificate of credit counseling completion when you file for bankruptcy, and evidence of completion of debtor education after you file for bankruptcy – but before your debts are discharged. Only credit counseling organizations and debtor education course providers ...
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era: With limited exceptions, people who plan to file for bankruptcy protection must get credit counseling from a government-approved organization 180 days before they file. They also must complete a debtor education course to have their debts discharged.
The Department of Justice’s U.S. Trustee Program approves organizations to provide the mandatory credit counseling and debtor education. Only the counselors and educators that appear on the U.S. Trustee ...Continue → Share
Changes to the bankruptcy law in 2005 added a “means test.” The means test keeps filers with higher incomes from filing for Chapter 7 bankruptcy. Some people believe you must be completely broke to file chapter 7, but that is not the case. Actually, most people who would have qualified before the changes, will still qualify under the new law.
The means test deducts specific monthly expenses from the debtor’s income to find the debtor’s “disposable income.” ...Continue → Share
“At the end of every seven years you shall grant a remission of debts. This is the manner of remission: every creditor shall release what he has loaned to his neighbor; he shall not exact it of his neighbor and his brother, because the LORD’S remission has been proclaimed.” – Deuteronomy 15:1,2
The origin of the word “bankruptcy” are the Latin words bancus (bench) and ruptus (broken). When a banker could no longer continue lending money, his bench was broken as ...Continue → Share
A lawsuit arising in or related to a bankruptcy case that is commenced by filing a complaint with the court. A nonexclusive list of adversary proceedings is set forth in Fed. R. Bankr. P. 7001.
An agreement to continue performing duties under a contract or lease.
An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
The value of a debtor’s interest in property that remains after liens and other creditors’ interests are considered. (Example: If a house valued at $100,000 is subject to a $80,000 mortgage, there is $20,000 of equity.)
executory contract or lease
Generally includes contracts or leases under which both parties to the agreement have duties remaining to be performed. (If a contract or lease is executory, a debtor may assume it or reject it.)
exemptions, exempt property
Certain property ...Continue → Share
The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.
A sale of a debtor’s property with the proceeds to be used for the benefit of creditors.
A creditor’s claim for a fixed amount of money.
Section 707(b)(2) of the Bankruptcy Code applies a “means test” to determine whether an individual debtor’s chapter 7 filing is presumed to be an abuse ...Continue → Share
party in interest -
A party who has standing to be heard by the court in a matter to be decided in the bankruptcy case. The debtor, the U.S. trustee or bankruptcy administrator, the case trustee and creditors are parties in interest for most matters.
petition preparer -
A business not authorized to practice law that prepares bankruptcy petitions.
A debtor’s detailed description of how the debtor proposes to pay creditors’ claims over a fixed period of time.
A person or business that ...Continue → Share
Any mode or means by which a debtor disposes of or parts with his/her property.
The representative of the bankruptcy estate who exercises statutory powers, principally for the benefit of the unsecured creditors, under the general supervision of the court and the direct supervision of the U.S. trustee or bankruptcy administrator. The trustee is a private individual or corporation appointed in all chapter 7, chapter 12, and chapter 13 cases and some chapter 11 cases. The trustee’s responsibilities ...Continue → Share
Bankruptcy cases cannot be filed in State Court. The 94 Federal Judicial districts handle bankruptcy matters, and in almost all districts, bankruptcy cases are filed in the Federal Bankruptcy Court.
Bankruptcy laws help people who can no longer pay their creditors and help them get a fresh start by liquidating their assets to pay their debts, or by creating a repayment plan.
Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation. These procedures ...Continue → Share