Bankruptcy Debt Collection
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Bankruptcy Information
Vendetti & Vendetti can help reduce the stress of consumer debt by filing for individual or joint Bankruptcy relief under the Federal Bankruptcy Code. With a free consultation, a client's case will be evaluated by an attorney who will determine if Bankruptcy is the right course of action for the client's specific financial situation. If we do decide that Bankruptcy is necessary for the client, our attorneys will provide you with a efficient and economical course of recovery.
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. A debtor seeking chapter 7 bankruptcy relief must overcome a presumption of abuse under what is called the "Means Test." Under the Means Test, the trustee will analyze the Current Monthly Income of the debtor (average income the debtor receives 6 months prior to filing the petition) and will also analyze income earned from other individuals residing in the debtor's household. If the household income is greater than an amount determined by Federal Law, then a presumption arises that the debtor is abusing the Bankruptcy Code. This presumption may be overcome by a showing of clear and convincing evidence that there is no abuse of the Bankruptcy Code.
If an individual is qualified to file for chapter 7 relief, they must submit certain information to our office. An attorney will then gather all the client's financial information and file a petition. An important caveat to know before filing a petition is that the debtor must obtain a pre-petition credit counseling certificate indicating that the debtor has complied with the course. The pre-petition counseling information may be obtained through the attorney and is about a 45 minute to an hour telephone conversation with an authorized counseling agent.
One of the primary purposes of bankruptcy is to discharge certain debts to give a debtor a clean slate in regards to their financial situation. The debtor has no liability for discharged debts. Although an individual chapter 7 case usually results in a discharge of most debts, some types of debts are not discharged, such as tax deficiencies, student loans, domestic support obligations, and certain other debts owed to governmental agencies. Moreover, a bankruptcy discharge does not extinguish a lien on property.
A chapter 7 case begins with the debtor filing a petition, which creates an "automatic stay" to all collection action. Simply put, once a petition is filed, a creditor can no longer call a debtor, send collections letters or take any other action on the outstanding debt.
The courts must charge a $245 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge. Normally, the fees must be paid to the clerk of the court upon filing. With the court's permission, however, individual debtors may pay in installments or the fee may be waived all together if certain requirements are satisfied. In regards to paying in installments, the number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Debtors must know that the failure to pay these fees may result in dismissal of the case.
Between 20 and 40 days after the filing of the petition, the trustee will hold a meeting of creditors. During this meeting, the trustee puts the debtor under oath and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. If a husband and wife have filed a joint petition, they both must attend the meeting and answer questions. Within 10 days of the meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described earlier.
An individual receives a discharge for most of his or her debts in a chapter 7 bankruptcy case. A creditor may no longer initiate or continue any legal or other action against the debtor to collect a discharged debt. However, the court may revoke a chapter 7 discharge on the request of the trustee, a creditor, or the U.S. trustee if the discharge was obtained fraudulently. If the trustee in the case are satisfied that there is no fraud or no presumptions of abuse arise, then the Debtor will have his debts discharged under chapter 7 bankruptcy relief.
