February 18, 2020

Bankruptcy Hearing – What If I Cannot Attend on the Date the Hearing is Set For?

Every time a bankruptcy is filed, a corresponding bankruptcy hearing is set.  This hearing is commonly called the “Meeting of Creditors” hearing, or the 341(a) hearing (which is the section of the bankruptcy code that establishes this mandatory hearing requirement).  At this hearing, a bankruptcy trustee will ask a series of questions (as described in an earlier post) of the debtor, and creditors have a chance to ask the debtor (the person who has filed bankruptcy) questions under oath, as well.  Creditors, however, largely do not appear at this bankruptcy hearing, although they have the legal right to do so. [Read more…]

Bankruptcy Filing Fees Set to Increase

The Judicial Conference has announced that filing fees for bankruptcy will increase.  This increase will affect all new bankruptcy cases filed on and after June 1, 2014.  Chapter 7 bankruptcy and Chapter 13 bankruptcy filing fees will increase by $29 each.


  • The Chapter 7 bankruptcy filing fee will increase from $306 to $335.
  • The Chapter 13 bankruptcy filing fee will increase from $281 to $310.

These fees can still be paid on installments after the bankruptcy is filed.  

Please note that my attorney fee will remain the same.

If you have any questions regarding bankruptcy or the court fee for filing bankruptcy, please contact my office for a free consultation.  




Wage Orders & Chapter 13 Bankruptcy

A chapter 13 bankruptcy is a reorganization bankruptcy, lasting usually between 3 and 5 years. Each month of the bankruptcy, a payment must be made by the debtor for the benefit of the debtor’s creditors.  This post discusses the logistics of these monthly chapter 13 bankruptcy payments.

To make these payments, the chapter 13 trustee will require, in most cases, a wage order, or a “voluntary garnishment” served on the debtor’s place of employment.  The debtor’s employer, then, makes the payment each much to the bankruptcy, and this payment is a wage deduction for the debtor.  With the wage order in place, the chapter 13 often enters a “cruise control” phase, whereby the payments are automatic to the chapter 13 bankruptcy.  Statistically, chapter 13 bankruptcies that contain a wage order are more successful than chapter 13 bankruptcies that do not contain a wage order and where the debtor directly makes the payment each month.  Due, in large part, to the higher success rates of a chapter 13 bankruptcy with a wage order in place, the chapter 13 trustee advocates for the wage order strongly.

Once the wage order is in place, a debtor’s employer will make the chapter 13 payment and deduct this amount from the debtor’s payroll.  If the debtor is paid twice a month, then the chapter 13 monthly payment is usually paid half each pay period.

There are certain situations that may warrant not having a wage order.  The most common situation is if a debtor owns his or her business, and therefore must make the payments without a wage deduction.  In this instance, the chapter 13 trustee allows the debtor to make payments directly.  Another example of when a waiver of a wage order may be obtained is when a debtor has just started a new job, and does not want the wage order to potentially negatively effect his or her employment.  If a debtor has been in a job for quite some time, this argument is not very strong, however.  If a wage order is waived by the trustee or by the court, then the debtor will need to send payments directly to the chapter 13 trustee; the chapter 13 trustee, however, will only accept money orders or cashier’s checks in this situation, and not personal checks or automatic bill pay through a bank.

What if you do not want a wage order in your chapter 13 bankruptcy and the chapter 13 trustee insists that we have one?  Well, we can appear before a judge and if our reasons are compelling, we can potentially obtain a waiver of the wage order with the provision that should a payment be missed, the wage order will be implemented immediately.

If you have questions about chapter 13 bankruptcy and wage orders, please feel free to call me today to set up your free in-office bankruptcy consultation.

How Can Bankruptcy Stop My Foreclosure?

Bankruptcy is an extremely useful tool when encountering a foreclosure on real property.  As part of my practice, I do foreclosure defense.  In many cases, bankruptcy is a fall-back option should my clients be unable to obtain a timely mortgage modification.  Sometimes we choose bankruptcy first to stop a foreclosure, rather than alternative options that fall under the spectrum of foreclosure defense.  This article discusses how bankruptcy may stop a foreclosure and when filing a chapter 13 bankruptcy is appropriate when facing a foreclosure action against your home.

The first question I ask when clients are facing a foreclosure, though, is: What is your objective with your home?  Are you trying to save your home, or looking at walking away from your home with the least amount of liability exposure?  If clients are looking at saving their home, we move on to a discussion about the benefits of a chapter 13 bankruptcy.

Chapter 13 bankruptcy allows a client to stop immediately a foreclosure action.  As soon as we file a chapter 13 bankruptcy, we will provide the opposing party (the bank) and the court handling the foreclosure case with notice of the chapter 13 bankruptcy filing.  After stopping the foreclosure action with the bankruptcy filing, we propose a plan in which the arrears on the mortgage can be paid over 3-5 years.  Now, as soon as we file a chapter 13 bankruptcy, current payments on the mortgage will need to be made going forward; otherwise, the bank can move the court for relief from the bankruptcy in order to foreclose on the property.

An Example of How A Chapter 13 Bankruptcy Can Stop a Foreclosure & Save a Home:

Let’s say Ted, a consumer, loses his job and cannot make his mortgage payment for 1 year ($1,100 mortgage payment x 12 months = $13,200).  The bank who holds the mortgage initiates a foreclosure proceeding, and Ted comes to see me.  (Fortunately, Ted has found a new job and can make current mortgage payments going forward.) We are able to file a chapter 13 bankruptcy and immediately stop the foreclosure.  We are also able to place the arrears (the 1 year missed payments on the mortgage, or $13,200) into the bankruptcy to be paid over 3 to 5 years.  Now, Ted must start making his current monthly mortgage payment, and for the next 3 to 5 years, he can pay down on the mortgage arrears (or $13,200) through the bankruptcy.  Ted has successfully saved his home from foreclosure.

A chapter 7 bankruptcy, or liquidation bankruptcy, may disrupt a foreclosure proceeding, but does not have the tools necessary (such as a chapter 13 bankruptcy) to cure the mortgage arrears over time.

If you are facing a foreclosure and would like to learn more about how a chapter 13 bankruptcy filing may stop the foreclosure, please call today to set up your free in-office bankruptcy consultation.


Can I Take on New Credit While in a Chapter 13 Bankruptcy?

The Order Confirming Plan in a Chapter 13 Bankruptcy contains tight restrictions regarding obtaining new credit (for example, credit cards, car loans, etc.) while in a Chapter 13 Bankruptcy.  This post details these credit restrictions and when it is potentially allowable to obtain credit while you are in a Chapter 13 Bankruptcy.

Specifically, the Order Confirming Plan in a Chapter 13 Bankruptcy, that a Bankruptcy Judge signs off on, states that the “debtor shall incur no credit or debt obligations during the life of the plan without the trustee’s written consent unless made necessary by emergency or incurred in the ordinary course of operating the debtor’s business.” Therefore, in order to obtain credit, the trustee needs to approve such an activity, unless it is necessitated by emergency or incurred in the ordinary course of operating a business.  “Necessitated by an emergency” usually is very narrowly construed, and therefore I hardly ever rely on this provision when clients ask about obtaining credit.  An example of an emergency for which this provision could apply to would be a catastrophic medical occurrence, where obtaining timely trustee approval would be impossible.

The normal course, then, to obtain credit is to seek the Chapter 13 Trustee’s approval first.  The Chapter 13 Trustee will usually deny a request for an unsecured credit card, though.  The more usual forms of credit we may seek approval for would be in the form of student loans and car loans, for example.  In fact, the trustee has a special form designated for car loans, called the vehicle request form.  With the vehicle request form, a debtor in chapter 13 bankruptcy can find a vehicle and lending, complete the form, and send to the trustee for approval.  If the trustee approves this vehicle purchase (we usually know within a few days), the debtor in bankruptcy can purchase the car provided his or her budget can afford the car payments.

If you operate a business and your business relies on credit, there is a special provision that allows a debtor to incur credit without prior trustee approval if it is in the ordinary course of operating a business.  Usually, we let the trustee know at the beginning of the Chapter 13 Bankruptcy that we will be obtaining continuing credit while in bankruptcy for the purpose of operating the business.

If you have questions about bankruptcy and if you will be allowed to obtain credit during a Chapter 13 Bankruptcy, please call today to schedule your free in-office bankruptcy consultation.


What is the Chapter 13 Bankruptcy Plan?

For every chapter 13 case that is filed, a chapter 13 plan must be submitted to the court and to your creditors.  The chapter 13 plan is probably the most crucial document of your chapter 13 bankruptcy.  This article details what the chapter 13 plan is and why it is so important.

The chapter 13 plan must be filed along with, or shortly after, your chapter 13 bankruptcy petition is filed with the bankruptcy court.  The plan proposes to the court and your creditors the following items:

1. The length of the plan (36 – 60 months)

2. The monthly payment into the plan by the debtor

3.  If mortgage arrears or vehicle loan arrears will be paid through the plan

4.  If secured debt, such as a car, will be paid through the plan (including if the interest rate and loan amount will be altered)

5.  How much your attorney will be paid through the plan

6.  What percentage will your unsecured creditors be paid through the plan

7.  If there is a best interest amount in your bankruptcy, or the minimum amount your unsecured creditors must be paid through the plan

8.  Indication of what debt may be paid outside of the plan

9.  If any judicial liens will be avoided through the plan

10.  And other provisions depending on the circumstances of a particular case

Once the plan is filed with the court, the court will provide notice to your creditors and chapter 13 trustee.  At the hearing before the trustee, the trustee will review the plan to determine if you filed it in good faith and it is fair and reasonable to your creditors, given your particular set of facts.  The trustee will also make certain that the plan is feasible, meaning the amount you propose to pay into the plan will adequately fund the plan.

Creditors and the trustee will have an opportunity to object to the plan.  If the trustee or creditors object (usually based on if the plan is adequately funded or if a creditor receives fair treatment through the plan), we work to resolve the objections.  Once all objections are resolved, we submit to the trustee a document called an Order Confirming Plan and Resolving All Motions.  A bankruptcy judge will review the Order Confirming Plan, and a hearing will be held regarding the plan, called a Confirmation Hearing.  If all objections are resolved, the bankruptcy judge will sign off on the Order Confirming Plan and your plan takes legal effect.

If you are interested in learning more about chapter 13 bankruptcy and the mechanics of the bankruptcy and plan requirements, please call today to schedule your free in-office bankruptcy consultation.

Disecting a Credit Report for Bankruptcy

I have previously written an article on obtaining free credit reports each year from Annual Credit Report.  This present post goes into detail on how to read a credit report once it is obtained, and how the credit report is used for constructing a chapter 7 bankruptcy or a chapter 13 bankruptcy.

Under Federal Law, the three main credit bureaus must provide a free credit report every year to consumers.  The three major credit reports are: Exquifax, Transunion, and Experian. But once you pull your reports, how do you read the reports in the context of preparing a bankruptcy petition?  What information is contained in these reports?

The information contained in the reports are fairly uniform throughout each of the three reports.  For each account that is reported to the credit bureaus, certain information is provided by the creditor.  First, the kind of credit a particular account is will be reported.  Generally, credit falls into two categories, installment or revolving.  Installment credit is credit based on installment payments, such as a car loan or a mortgage loan.  Revolving credit represents credit cards, and other forms of credit, that you can build up the balance and pay down the balance over time.  Second, the credit report will indicate if the account is owned by you alone (individual), or jointly owned (co-signer) or if you are an authorized user.  Third, the credit report will indicate information regarding the account in terms of total amount of credit allowable and the highest balance you may have maintained, and so forth.  Fourth, the credit report will indicate how much you actually still owe on the account (credit reports are updated monthly). Fifth, the credit report will also indicate if there is a fixed or minimum payment amount that is contractually required. Sixth, the credit report will indicate the status of the account.

Status of the account is a factor I pay extremely close attention to when constructing a bankruptcy.  An account can be open, closed, inactive, paid, charged-off, or transferred.  If an account has a balance, or has been charged off, or transferred, these are the accounts we must include in the bankruptcy filing, even if such account shows a zero balance (we list it as precautionary, then, in the bankruptcy).  Accounts that have a zero balance and that are closed and paid off, we do not list in the bankruptcy.  There is, however, a certain level of errors contained in credit reports.  I will review the credit reports with clients to ensure we have all the creditors listed.  (I also have clients bring in any bills they may have, and write down any creditors they can recall for which they may not have a bill for or that may not be included on the credit report.)

We always list charged-off accounts in a bankruptcy filing.  What are charged-off accounts?  This is a statement from the creditor that this account is probably not collectable.  This does not mean the debt is no longer valid.  Therefore, we always list charged-off accounts when constructing a bankruptcy.  A creditor can, theoretically, pull the account back and pursue the debt, sell the debt to a third party (such as a junk debt buyer), or cancel the debt and issue a 1099c income statement to the borrower (to be discussed in more depth in a future post).

In conclusion, credit reports, and what is reported by creditors, form part of the basis of what we use in constructing a bankruptcy.  As part of my document production, I always have clients pull credit reports as the reports provide quite a bit of useful information when constructing a bankruptcy petition.

If you are interested in bankruptcy or learning more about bankruptcy, please call for a free in-office bankruptcy consultation today



Certain level of errors

Will People Find Out that I Filed Bankruptcy?

A common question I receive is: “Will people find out if I file bankruptcy?”  This post details who will find out about your bankruptcy, and who will probably never find out about your bankruptcy (unless you first disclose this fact to them).

A bankruptcy filing is a public filing; it becomes part of the public record.  However, it is difficult for the average person to access this record, and even difficult for many attorneys to access this record, unless they practice in bankruptcy and/or the federal court system.  So, who will find out that you filed bankruptcy?

First, your creditors will find out you filed bankruptcy; this is a given.  We file bankruptcy for relief from our creditors. Second, any co-borrowers or co-signers will receive notice of our bankruptcy.  Co-borrowers’ or co-signer’s will be affected by our bankruptcy; we will usually no longer be financially liable for the debt these individuals co-signed — therefore, notice must be provided. Third, if we have a domestic support obligation (child  support, spousal support, etc.) that claimant, or person who receives these payments, must receive notice of the bankruptcy and special notice must be made to the trustee in such cases (see DSO Form post).  Third, the credit bureaus will receive notice that we filed bankruptcy via the creditors we list in our bankruptcy. Our credit reports will, then, report that we filed bankruptcy. Fourth, prospective lenders of credit and car loans will discover we filed bankruptcy  – as soon as you file bankruptcy you will receive applications for credit cards and car loans.  Lenders will use the bankruptcy court’s database to establish new business.

Your friends and family will most likely never know you filed bankruptcy unless you inform them first that you have.  The newspaper does not print the names of people who filed bankruptcy.  To access information regarding who filed bankruptcy, a person would need to go down to the bankruptcy court to search names (this is no easy task);  or, have access to the bankruptcy court’s database, which is not granted easily (generally you must be an attorney or creditor).

Therefore, when I am asked “will anyone know I filed bankruptcy,” my answer is: creditors, the court, co-borrowers, claimants of domestic support obligations, but hardly ever any friends or family.  Rest assured, although bankruptcy is a public activity, few people will know if you file bankruptcy or not. And in fact, I am certain that you know at least three people (if not more) who have filed bankruptcy, yet you are unaware that they have filed bankruptcy.

If you are interested in bankruptcy and would like to learn more about the process, please call today for your free in-office bankruptcy consultation.


The Chapter 13 Bankruptcy Debt Limit

I meet with clients almost daily.  During my free in-office bankruptcy consultation, I conduct an in-depth analysis of a client’s legal issues as it pertains to bankruptcy. Most often, a client will choose to file a chapter 7 bankruptcy, provided he or she meets the eligibility requirements for a chapter 7.  If the circumstances warrant a chapter 13 bankruptcy filing, I will discuss with a client how a chapter 13 operates and, given the facts, how this chapter of bankruptcy may be the best option.  But sometimes a client may not be eligible to file a chapter 13 bankruptcy, although this chapter may be the most preferable given a client’s particular set of facts.   One reason a chapter 13 bankruptcy filing may not work is that a client may have too much debt.  This post discusses the chapter 13 restriction of debt load in-depth.

A chapter 13 bankruptcy, or a “restructuring bankruptcy,” is a bankruptcy that lasts between 3 to 5 years, with monthly payments being made by the consumer for the benefit of creditors.  A chapter 13 bankruptcy does have certain restrictions, however, particularly when it comes to how much debt a consumer can have to be eligible to file a chapter 13 bankruptcy.  Currently, a consumer must have less than $360,475 in unsecured debts (not attached to collateral, such as medical bills, credit card bills, etc.) and less than $1,081,400 in secured debt (such as mortgages on a house, car loans, etc.).  These numbers adjust periodically.

Most people who consider filing a chapter 13 bankruptcy fall below these total debt thresholds. But what if a consumer exceeds these thresholds?  What options does he or she have?

I recently wrote a post on “Chapter 20” bankruptcy (chapter 7 + chapter 13) detailing one strategy to combat the debt ceiling.  If a consumer’s debt is higher than the allowable thresholds for a chapter 13 bankruptcy, one option is to file a chapter 7 bankruptcy, eliminate the unsecured debt, and then file a chapter 13 bankruptcy on the heels of a chapter 7 bankruptcy.  Often times, by eliminating the dischargeable unsecured debt first in a chapter 7 bankruptcy filing, this may qualify a consumer for a chapter 13 bankruptcy filing since the debt load may substantially decrease.  Using a “Chapter 20” approach applies in a very narrow set of circumstances, though.

The other option we always consider before looking at a chapter 13 bankruptcy, is a chapter 7 bankruptcy filing.  A chapter 7 bankruptcy will eliminate most debts and contains absolutely no debt ceiling.  But to file a chapter 7 bankruptcy, certain eligibility requirements must be met first.  For example, a consumer must not have filed a chapter 7 bankruptcy in the previous 8 years.  The second eligibility criteria for a consumer is to be able to pass the chapter 7 bankruptcy “means test” which is based on income and household size.  If a consumer’s income is too high based on household size he or she may be ineligible to file for a chapter 7 bankruptcy.  Therefore, in some instances a consumer may not even qualify for a chapter 7 bankruptcy.

Now, what if a consumer is above the debt threshold of $360,475 in unsecured debt and/or $1,081,400 in secured debt, and he or she does not qualify for a chapter 13 bankruptcy? And what if that same consumer’s income is too high to be eligible for a chapter 7 bankruptcy? Where do you turn?  Chapter 11 bankruptcy.

Chapter 11 bankruptcy is mainly for business reorganization, but can be a useful bankruptcy tool for some consumers who do not qualify for a chapter 7 bankruptcy because of too high of income and does not qualify for a chapter 13 because of too high of debt load.  Chapter 11 is a very complicated form of bankruptcy.  The situation that necessitates the need to file a chapter 11 bankruptcy for an individual consumer is rare.

If you are interested finding out more about bankruptcy, please call today to schedule your free in-office bankruptcy consultation in Eugene.



“Chapter 20” Bankruptcy

You may have heard of a Chapter 7 Bankruptcy.  And you may have heard of a Chapter 13 Bankruptcy.  But you probably have not heard of a “Chapter 20” Bankruptcy. While not technically a chapter of bankruptcy, “Chapter 20” bankruptcy nonetheless is an important strategy when dealing with very specific financial fact patterns.

As I have detailed in many earlier posts, a Chapter 7 Bankruptcy is a liquidation bankruptcy, where you can eliminate most, if not all, of your debt.  The time frame usually is about 90 days from start to finish.  The second most common type of bankruptcy is a Chapter 13 Bankruptcy, or a “wage earner’s” bankruptcy.  A chapter 13 bankruptcy generally lasts between 3 to 5 years, and the consumer makes monthly payments during that period for the benefit of his or her creditors.  But what, then, is a “Chapter 20” bankruptcy.

A “Chapter 20” Bankruptcy is more of a procedural matter.  Simply stated, it is filing a chapter 7 bankruptcy first, followed by filing a chapter 13 bankruptcy immediately after.  Therefore, chapter 7 plus chapter 13 renders a chapter 20, despite the fact that two bankruptcies are being filed separate of one another.

Why would a consumer file a “Chapter 20” bankruptcy?  This seems like a lot of work!

There a couple of important situations when filing a “Chapter 20” Bankruptcy is useful.  First, there are debt limits to filing a chapter 13 bankruptcy; if you have too much debt, you do not qualify for a chapter 13 bankruptcy.  However, if you qualify for and file a chapter 7 bankruptcy, this will eliminate most debts.  By eliminating a large portion of your debts first through a chapter 7 bankruptcy filing, you can then move onto filing a chapter 13 bankruptcy.  This may be especially useful if you need to avoid a second lien on your property and catch up on mortgage arrears on your primary mortgage, but you can only accomplish this in a chapter 13.  Additionally, by filing a “Chapter 20” bankruptcy, this may reduce the time that you are actually in a chapter 13 bankruptcy (as you are no longer focusing on debts eliminated in your chapter 7 filing).

While you will obtain a bankruptcy discharge in a chapter 7 bankruptcy, you will not receive a bankruptcy discharge in an immediately following chapter 13 bankruptcy.  But this is okay; we are using the chapter 13 to pay down debt that will not be taken care on in a chapter 7 bankruptcy — hence, a “Chapter 20” bankruptcy.

By filing a “Chapter 20” bankruptcy, you can also focus more of your energy and resources on non-dischargeable debts, such as taxes.  For example, if you have $50,000 in medical debt, $20,000 in credit card debt, and $30,000 in non-dischargeable unsecured tax debt (a special type of tax debt), the benefits of a “Chapter 20” bankruptcy become immediately apparent.  By filing a chapter 7 bankruptcy first, you will get rid of the medical debt and the credit card debt, but you will be stuck with the tax debt. If you file a chapter 13 on the heels of a chapter 7 (“Chapter 20”), the chapter 7 will take care of the dischargeable debt so that the chapter 13 bankruptcy can focus exclusively on the tax debt (non-dischargeable debt), for which you will have up to 5 years to pay down.

While a “Chapter 20” bankruptcy is not a true chapter of bankruptcy, it is nonetheless a viable strategy when dealing with particular debts and very specific fact patterns.  If you are interested in learning more about chapter 7, chapter 13, or even “Chapter 20” bankruptcy, please call today to schedule a free in-office bankruptcy consultation in Eugene.

Pursuant to 11 U.S. Code § 528: "I am a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code."

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