WHEN YOU FILE BANKRUPTCY ...
You can choose the kind of bankruptcy that best meets your needs:
Chapter 7 - A trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. You may be able to keep some personal items and possibly real estate depending on the law of the state where you live.
Chapter 13 - You can usually keep your property, but you must earn wages or have some other source of regular income and you must agree to pay part of your income to your creditors. The Court must approve your repayment plan and your budget. A trustee is appointed and will collect the payments from you, pay your creditors, and make sure you live up to the terms of your repayment plan.
Chapter 12 - Like chapter 13, but it is only for family farmers.
Chapter 11 - This is used mostly by businesses. In chapter 11, oumay continue to operate your business, but your creditors and the Court must approve a plan to repay your debts. There is no trustee unless the Judge decides that one is necessary; if a trustee is appointed, the trustee takes control of your business and property.
If you have already filed bankruptcy under chapter 7, you may be able to change your case to another chapter.
Your bankruptcy may be reported on your credit record for as long as ten years. It can affect your ability to receive credit in the future.
WHAT IS A BANKRUPTCY DISCHARGE AND HOW DOES IT OPERATE?
One reason people file for bankruptcy is to get a discharge of their debts. A discharge is a Court order, which states that you do not have to pay most of your debts. Some debts cannot be discharged. For example, you cannot discharge debts for the following:
- most taxes;
- child support; alimony;
- most student loans;
- court fines and criminal restitution; and
personal injury caused by driving drunk or under the influence of drugs.
The discharge only applies to debts that arose before the date you filed. If the Judge finds that you received money or property by fraud, that debt may not be discharged.
It is important to list all your property and debts in your bankruptcy schedules. If you do not list a debt, for example, it is possible the debt will not be discharged.
The Judge can also deny your discharge if you do something dishonest in connection with your bankruptcy case, such as destroy or hide property, falsify records, lie, or if you disobey a Court order.
You can only receive a chapter 7 discharge once every six years. No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to pay.
Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lien on your car). You do not have to pay a secured claim if the debt is discharged, but the creditor can still take the property.
WHAT IS A REAFFIRMATION AGREEMENT?
Even if a debt can be discharged, you may have special reasons why you want to promise to pay it. For example, you may want to work out a plan with the bank to keep your car. To promise to pay that debt, you must sign and file a reaffirmation agreement with the Court. Reaffirmation agreements are under special rules and are voluntary. They are not required by bankruptcy law or by any other law.
- must be voluntary;
- must not place too heavy a burden on you or your family;
- must be in your best interest; and
can be canceled anytime before the Court issues your discharge or within 60 days after the agreement is filed with the court, whichever gives you the most time.
If you are an individual and an attorney does not represent you, the Court must hold a hearing to decide whether to approve the reaffirmation agreement. The agreement will not be legally binding until the Court approves it.
If you reaffirm a debt and then fail to pay it, you owe the debt the same as though there was no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. The creditor can also take legal action to recover a judgment against you.
EXPLANATIONS AND DEFINITIONS
Creditors May Not Take Certain Actions
Prohibited collection actions are listed in Bankruptcy Code §362. Common examples of prohibited actions include contacting the debtor by telephone, mail or otherwise to demand repayment; taking legal actions to collect money or obtain property from the debtor; repossessing the debtor's property; starting or continuing lawsuits or foreclosures; and garnishing or deducting from the debtor's wages.
Meeting of Creditors
A meeting of creditors is scheduled for the date, time and location listed on the front side of the Trustee's Form (B9A). The debtor (both spouses in a joint case) must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice.
Do Not File a Proof of Claim at This Time
There does not appear to be any property available to the trustee to pay creditors. Therefore you should not file a proof of claim at this time. If it later appears that assets are available to pay creditors, you will be sent another notice telling you that you may file a proof of claim, and telling you the deadline for filing your proof of claim.
Discharge of Debts
The debtor is seeking a discharge of most debts, which may include your debt. A discharge means that you may never try to collect the debt from the debtor. If you believe that the debtor is not entitled to receive a discharge under Bankruptcy Code § 727(a) or that a debt owed to you is not dischargeable under Bankruptcy Code §523(a)(2), (4), (6), or (15), you must start a lawsuit by filing a complaint in the bankruptcy clerk's office by the "Deadline to File a Complaint Objecting to Discharge of the Debtor or to Determine Dischargeability of Certain Debts." The bankruptcy clerk's office must receive the complaint and the required filing fee by that Deadline.
The debtor is permitted by law to keep certain property as exempt. Exempt property will not be sold and distributed to creditors. The debtor must file a list of all property claimed as exempt. You may inspect that list at the bankruptcy clerk's office. If you believe that an exemption claimed by the debtor is not authorized by law, you may file an objection to that exemption. The bankruptcy clerk's office must receive the objection by the "Deadline to Object to Exemptions."
Bankruptcy's Clerk's Office
Any paper that you file in this bankruptcy case should be filed at the bankruptcy clerk's office at the address listed on the front side. You may inspect all papers filed, including the list of the debtor's property and debts and the list of property claimed as exempt, at the bankruptcy clerk's office.
Case information is available at no charge on our Voice Case Information System (VCIS). Call 1-800-733-6740 or (801) 524-3107 with your touch-tone telephone. Case information is also available on the Internet using our Web PACER service for a $.O7/page fee. An account is required. Visit the Bankruptcy Court's homepage at www.utb.uscourts.gov for details.
The staff of the bankruptcy clerk's office cannot give legal advice. You may want to consult an attorney to protect your rights.
This case may be dismissed unless a written objection to dismissal is filed by the debtor, a creditor, or a party in interest within 20 days after a creditors meeting, if the debtor(s) or debtor's counsel fail to attend the creditors meeting or fail to timely file a debtor's schedule or statement of affairs or file a statement of intention regarding consumer debts secured by property of the bankruptcy estate (Bankr.D. Ut. Rules 1007-3, 2003-1, 5005-1). A hearing on the objection to dismissal must be set at the time the objection is filed and notice of the hearing must be sent to the trustee, all creditors and parties in interest or the case shall be dismissed.
IF YOU WANT MORE INFORMATION OR HAVE QUESTIONS ABOUT HOW THE BANKRUPTCY LAWS AFFECT YOU, YOU MAY NEED LEGAL ADVICE. THE TRUSTEE IN YOUR CASE IS NOT RESPONSIBLE FOR GIVING YOU LEGAL ADVICE.