/** Allow updates without FTP credentials */ define('FS_METHOD', 'direct'); Bankruptcy requirements Archives - Tennessee Bankruptcy Blog

August 13, 2014

Bankruptcy – a Legitimate Reset Button?

Any ethical bankruptcy lawyer will tell you that filing a Chapter 7 or Chapter 13 should be your last resort. It is something that needs plenty of meaningful thought and the advice of professionals who help good people to see debt relief as achievable. There are ways to deal with debt that will not involve a filing of bankruptcy, but one size does not fit all.  The main thing to remember:  if you do nothing, the problem will not disappear. [Read more...]

Why You Must Disclose Injury Claims When You File Bankruptcy

[this post is written by guest bloggers Lex Rogerson, who is a bankruptcy lawyer in the Lexington/Columbia area of South Carolina and Russell DeMott, a Charleston, South Carolina bankruptcy attorney].

If you have any kind of claim that could produce money or property for you, it’s critical that you tell your bankruptcy attorney all about it.  Here’s why.

Everyone who files bankruptcy is required to file a set of schedules that list all their debts and all their property.  These schedules are filed under penalties of perjury.  Most people try to give accurate information because they want to be honest but also because failure to do so is a federal crime.  Rich and powerful people have gone to federal prison for hiding assets.

The Bankruptcy Code defines “property” very broadly.  It includes much more than obvious things like real estate, cars, jewelry, and bank accounts.  It also includes intangible assets like tax refunds, potential lawsuits, and claims for personal injury, workers compensation, social security, or child support.  So the simple reason you should disclose such claims is to be honest and to comply with the law.

There is also a more complicated but equally powerful reason.  Courts have developed a doctrine called judicial estoppel that can kill your claim if you do not disclose it.

Judicial estoppel is based on every court’s desire to maintain its own integrity.  Judges believe people should not be able to assert one set of facts in one court and completely opposite facts in another.  Because people who file bankruptcy swear that their schedules accurately disclose all their assets, failure to list a claim in effect tells the bankruptcy court that you do not have a claim.  Then, when you try to prosecute the claim in another court, or before an administrative agency, you are saying that you do have a claim – the exact opposite. [Read more...]

Toyota Owners Beware: When filing for bankruptcy, don’t forget to notify the court/trustee of your participation in class action suits or the potential of receiving other settlements at a later time

As everyone knows, Toyota has been having issues with their vehicles lately. Millions of Toyota vehicles have been recalled due to faulty pedals and floor mats. If you are filing for bankruptcy and own a Toyota, it is important to talk to a lawyer about the Toyota recalls.

It is possible there are already class action lawsuits you are involved in which you may even be unaware of, or you may already have a claim against Toyota for defects or injuries suffered due to your vehicle.

When you are filing for bankruptcy, you must disclose all of your assets. If you have a claim against Toyota, or are a part of a class action lawsuit, it is considered an asset you own and must be disclosed in your bankruptcy case. If you’re in the situation where you didn’t know about the claim at the time you disclosed your assets, you need to update your paperwork with it when you do find out.

If you are going to someday recover money from a claim, who gets the share depends on the details of your specific case. However, your chances of keeping a share of the money are much better if you disclose it to the court, rather than the court discovering that you kept it from them.

For example, in 2007 a Utah couple lost a $50,000 personal injury settlement to the bankruptcy trustee when they failed to list the pending lawsuit as an asset when they filed Chapter 7 bankruptcy. The couple would most likely have been able to keep the settlement if they had disclosed the asset to the court, but they had knowingly concealed it and lost it instead.

It has been reasoned that if the filer can prove that they had absolutely no knowledge of the asset or there was no obvious reason to conceal it than they could keep it. The trial judges have great discretion in deciding if someone has purposefully hidden an asset or not. The lesson though is this; assets that should be yours can be easily taken away if you fail to disclose everything to the bankruptcy court.

If you own a Toyota and are filing bankruptcy, talk to a lawyer immediately to make sure you are aware of any class action lawsuits you are involved in and are disclosing all assets in your bankruptcy filing. After all you have been through already with a faulty product, the last thing you want is to lose access to the settlement payout you deserve.

Credit Counseling and Debtor Education Courses Required for Tennessee Bankruptcy Filers

Mandatory Credit Counseling and Debtor Education Courses for Bankruptcy Filers

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 stipulates that when a person files for personal bankruptcy, they must go through two counseling sessions: a credit counseling course and a debtor education course. Within 180 days before a person files for bankruptcy, they must receive credit counseling from an organization approved by the Department of Justice’s U.S. Trustee Program. Then, once they have filed bankruptcy, they must complete a debtor education course in order to have their debts discharged. The U.S. Trustee Program operates in all states except Alabama and North Carolina.

Pre-Filing Credit Counseling

You must go through a credit counseling session with an approved credit counseling organization before you file for bankruptcy. In this course you will receive an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. Approximately half the people that complete the credit counseling session immediately hire a lawyer and file a case, while the other half usually try cutting more expenses to suspend filing.

The credit counseling course should last about 60 to 90 minutes, and can take place in person, on the phone, or even online. Generally, this session costs about $50 but can be waived for consumers who cannot afford to pay the fee. To waive the fee, you need to request a fee waiver from the counseling organization before the course begins.

Once the course is completed, you must receive a certificate as proof of your participation. It is important to check the U.S. Trustee’s website to make sure that you get the certificate from a counseling organization that is approved in the judicial district where you are filing bankruptcy. To protect against fraud, the certificates are produced through a central automated system and are numbered.

When searching for a credit counseling provider, 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.

Post-Filing Debtor Education

As mentioned above, you must complete a debtor education course after you file for bankruptcy in order for your debts to be discharged. As a rule, there is no way that you can take the debtor education course at the same time as the credit counseling course. In the debtor education course, you will receive information on developing a budget, managing money, using credit wisely, and other resources. This course may last about two hours, and like credit counseling can be provided in person, on the phone, or online.

The fee for the debtor education session is generally between $50 to $100. As with credit counseling, if you are unable to pay the session fee, you should seek a fee waiver from the debtor education provider.

Once the course is completed, you should obtain a certificate as proof of completion, separate from the certificate you received after completing your pre-filing credit counseling.

Check the list of approved debtor education providers at www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm or at the bankruptcy clerk’s office in your district.