Frequently Asked Bankruptcy Questions


What do I have to do to file bankruptcy?

The bankruptcy process involves preparation of a petition, statement of financial affairs, schedules of income and expenses, and schedules of assets and debts. In a Chapter 13 case, a Chapter 13 Plan is also required. There are two classes that are required to be completed. A credit counseling class before the case can be filed. The certificate of completion is necessary as part of the initial Court filing. A financial management course is required after the case is filed, but the certificate of completion is required in order to be eligible to receive a discharge of the debts at the end of the case. There is at least one court appearance required called the Meeting of Creditors under 11 U.S.C. 341 of the Bankruptcy Code.

Can I keep my home and my car?

When a bankruptcy case is filed all property of the person filing (debtor) that is not exempt by law is part of the bankruptcy estate and is subject to turn over and liquidation by the Trustee in a Chapter 7 case and subject to the best interests of the creditors test in a Chapter 13 case.
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The Bankruptcy Code however, allows that persons filing bankruptcy are able to keep certain types of property up to certain allowance amounts. These are called exemptions and are considered the property necessary for the debtor to keep in order to provide for himself and his dependents. Generally exemptions include an allowance of a certain amount of equity in the debtor’s residence and vehicle(s), as well as personal property such as household goods, clothing, jewelry, etc. up to certain allowance amounts.
Which exemptions apply to a certain case requires a legal analysis based on the district that the bankruptcy case is filed and if the debtor did not reside in that district for at least the 2 years immediately preceding the filing of the bankruptcy case, where the debtor lived two years ago. If the loan contract makes the property collateral for the payment of the loan, it is considered a “secured debt”. In a Chapter 7 case the secured creditors must be paid in some manner, in order for the debtor to keep the property. If someone wants to keep their home or vehicle when it is subject to a loan or mortgage, the secured creditor is entitled to payment of the loan under a Chapter 7 case, although there is a procedure to redeem the property by paying the secured creditor the market value of the property in a lump sum instead of the balance amount of the loan. In a Chapter 13 case the secured creditor is entitled to be treated with regards to their rights in the collateral, but in some instances, there are more possible options to pay the secured creditor the value of the collateral or even modify their lien rights through the Chapter 13 Plan, instead of paying the balance owed on the loan. This requires a legal analysis and is not available universally.

Do I need to go to Court?

There is at least one court appearance required called the Meeting of Creditors under 11 U.S.C. 341 of the Bankruptcy Code. The purpose of the meeting of creditors hearing is for the person filing the bankruptcy (debtor) to be examined by the Trustee that is assigned to the case as to their petition, statement of financial affairs, schedules of income and expenses and schedules of assets and debts. In particular, the Trustee is interested in making sure that the debtor has listed all of their income and expenses, all of their assets and debts and that all applicable information has been disclosed in the statement of financial affairs. The Trustee will also confirm the eligibility of the debtor to file the particular type of bankruptcy case. In a Chapter 7 case the Trustee will also determine what assets if any, are nonexempt and whether the amount of nonexempt assets is enough to make a distribution to the creditors. If there are not enough nonexempt assets, it will be a “no asset” case and there will not be a distribution to creditors. If there are enough nonexempt assets, the debtor is required to cooperate with the Trustee to either turn over or buy out the nonexempt property so that the Trustee can make a distribution of the nonexempt property to the creditors.

In a Chapter 13 case, the Trustee will also wish to confirm that the Plan payments are current and instead of looking at distributing nonexempt assets, the Chapter 13 Trustee will determine if the Chapter 13 Plan pays the unsecured creditors more than what they would receive in a Chapter 7 liquidation. If so, the debtor is then allowed to keep the nonexempt property subject to the confirmation of their Chapter 13 Plan. In a Chapter 13 case there is also scheduled a Confirmation Hearing which is a hearing for the Judge to determine if the Chapter 13 Plan submitted by the debtor will be accepted by the Court. The confirmation hearing can sometimes be vacated if there are no objections to the Chapter 13 Plan or if all objections get resolved prior to the confirmation hearing date.

Do I need an attorney to represent me in my bankruptcy case?

The Bankruptcy Code does not require a debtor to be represented by an attorney in order to file bankruptcy. It is completely the choice of the debtor whether they wish to retain counsel to represent them. As in other financial decisions, a debtor should weigh the advantages of legal representation versus the costs. Because someone is filing bankruptcy, they are doing so because of financial distress and resources may be limited. The requirements and procedures of the Bankruptcy Code are a technical process. Many people believe that all they have to do is show the Judge that they cannot afford their debts and then the Judge will decide to relieve them of their debts. This is not how the process works.

The Bankruptcy Code has certain requirements of the debtor in order to be eligible to file the bankruptcy case and in order to be eligible to receive a discharge of the debts. These requirements are like a checklist. If the debtor meets all of the requirements, they will receive the discharge of their debts. If they do not meet every requirement, they will not receive the discharge of the debt. In fact it is prohibited by the Bankruptcy Code 11 U.S.C. 341(c) for a judge to even attend a meeting of creditors.
Under the Bankruptcy Code each participant in the bankruptcy process has a specific set of responsibilities and requirements that must be performed in a bankruptcy case in order for the case to go through to a discharge of the debts. It is the function of an experienced bankruptcy attorney like Dennis H. Babiniec to make sure that the debtor has met their responsibilities and requirements, so that the case will run smoothly like a well-tuned engine. If the attorney performs their job well, the case will seem to the debtor as very routine and “simple”. That is because if the debtor meets their checklist of requirements, they are entitled to the financial relief they are seeking. It is like having the right key to open a door. Our goal at Dennis H. Babiniec, P.C. is to make a complicated legal process simpler by assisting the client to meet the requirements for a successful bankruptcy case.

Contact Dennis H. Babiniec P.C. today at 303-451-9110 to schedule your free consultation, or browse our website for more information regarding Chapter 7 Bankruptcy & Chapter 13 Bankruptcy.

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We are a debt relief agency - a law firm providing legal representation to people who file for bankruptcy relief under the bankruptcy code. The content on this site is intended for general information only and is not to be construed as legal advice. Please consult Dennis H. Babiniec, P.C. for advice specific to your needs.

Dennis H. Babiniec, P.C.  |  Northglenn and Thornton, CO Bankruptcy Attorney  |   BBB Accredited, A+ rating and over 30 years of experience
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Westminster, Broomfield, Commerce City, Federal Heights, Wheat Ridge and Arvada, CO

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