Frank Advice About Bankruptcy From A Veteran Attorney
I apologize ahead of time for the serious tone of the following warnings. But I would be remiss if I did not adequately warn you of the potential pitfalls involved in filing bankruptcy. Law Office of Paul L. Urich, P.A., is here to protect you and assist you along the way. It is absolutely essential that you understand and take seriously the following important points if you are going to be filing bankruptcy.
1) IMPORTANT: Do not incur any new debt prior to filing bankruptcy! Running up new debt when you know that you are in a bankruptcy situation is absolutely “fraudulent.” Debts incurred fraudulently are not dischargeable through bankruptcy and can even lead to you having your entire case thrown out.
2) IMPORTANT: Do not give away, trade in or sell ANYTHING (that includes money, cars, real estate, jewelry, personal belongings, whatever!) prior to or during your bankruptcy case! You do not want to commit any action that could be seen by the trustee as a “fraudulent transfer of assets” before filing bankruptcy. Nor do you want to transfer any assets without the trustee’s permission during your bankruptcy, because your assets are then technically owned by the “bankruptcy estate” and do not fully belong to you. Under certain circumstances, it is allowable to transfer certain types of assets in certain ways, but you must talk to me about it first!
3) IMPORTANT: Do not make any large payments to any unsecured creditors prior to filing (especially if the creditor is a family member or a business associate)! The only creditors that you should continue to pay prior to (and after) filing bankruptcy are secured creditors; i.e., your mortgages or car payments. If you have made any payments totaling more than $600 to any one unsecured creditor within 90 days prior to filing, the trustee can demand the money back from that creditor so that it can be broken up evenly among all unsecured creditors.
This rule, of course, does not apply to secured creditors (mortgages, car payments). You must keep paying those creditors if you want to be able to keep those assets.
4) IMPORTANT: When you get your petition in the mail, you must check to make certain that all your creditors are included in the schedules and that their addresses are correct! You are required by the court to list all of your creditors, and it is in your best interest to do so. If a creditor does not receive proper notice of your bankruptcy because you provided your lawyer with incomplete or inaccurate information (or left them out altogether), that creditor may attempt to enforce their claim against you later on, even if you receive a discharge from the court on all your other debts.
Do not worry if the dollar figures for the amounts owed are off by a little. As long as the creditor is properly notified, all debts you owe to them are completely wiped out, whether it is $10 or $10 million. But, again, it is your responsibility (not your attorney’s) to provide a complete list of creditors with correct addresses so that they receive proper notice.
5) IMPORTANT: The court filing fee must be either cash (physically brought to my office) or in the form of a money order made out to “Paul L. Urich” or left blank. The filing fee is $299 for a Chapter 7 bankruptcy and $274 for a Chapter 13 bankruptcy. The filing fee cannot be paid by personal check. If you send a personal check for the filing fee, I will just have to send it back to you, and it will delay the filing of your petition with the court. And, PLEASE, do not send the money order to me until after you have received your completed bankruptcy petition in the mail from me. Then, send the money order back with the signed petition. Money orders can be purchased at the post office and most convenience stores for about $1.00.
6) IMPORTANT: CONCERNING SECURED DEBTS (mortgages, car payments, etc.): You absolutely must make your payments to secured creditors ON TIME after filing bankruptcy (especially in Chapter 13 bankruptcy)! NOTE: AUTOMATIC DEBITS MAY BE STOPPED, MAKE SURE YOU WATCH YOUR CHECKING ACCOUNT! This is far and away the most common cause of complications in bankruptcy cases. If you get behind on a secured payment after filing bankruptcy, that creditor has every right to make a motion to vacate the automatic stay and take the asset away from you (and they most likely will). It seems that no matter how often or how strongly I emphasize this fact to clients, it still happens.
I strongly suggest that for at least six months after your bankruptcy case is filed that you make your payments to your secured creditors by money order or bank check (they cannot bounce), and that you send it by certified or registered mail, return receipt requested so that you have proof of when they received it. And you must get it to them before the originally scheduled due date, not the later date given in the grace period.
For Chapter 7 Bankruptcy Debtors Only
7) IMPORTANT: I cannot file your bankruptcy petition with the court until the entire attorney’s fee has been either paid in full or we have made a monthly payment arrangement. Call my office for details.
8) IMPORTANT: Anything you own above what the law allows you to keep in the exemptions is fair game for the trustee to take, if you cannot reach an agreement with him or her to buy it back! When you choose to file a Chapter 7 bankruptcy, you are essentially surrendering all of your assets to the bankruptcy trustee, except for those things the law specifically allows you to keep in the exemptions. Under the Florida exemptions:
A) Your primary residence equity is completely protected from the bankruptcy trustee
B) You are protected only up to $1,000 per person for the equity in your automobile (the amount the vehicle is worth less what you owe on it)
C) You are protected only up to $1,000 per person for the value of all your other personal property, $4,000 if homestead exemption is not claimed.
If you own anything above what these exemptions allow you to keep you will most likely have to either surrender it to the trustee or make payment arrangements with the trustee to be able to keep it.
There Is No Such Thing As A Free Lunch. But There Is A Free Consultation.
To discuss your bankruptcy options with an experienced attorney at the Law Office of Paul L. Urich, P.A., call my Orlando office at 407-915-0842 or contact me online. My firm serves clients throughout central Florida.
I am a debt relief agent. I help people file for bankruptcy relief under the Bankruptcy Code.