Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hello, I live in Maryland. My lawyer rushes me in every meeting and is always rude. However, the problem is I have already paid him and we are in the middle of this bankruptcy thing, but I can't stand talking to him. That's why I keep coming to Lawyer's online. I really need some help. I will clarify with him when I meet with him, but it's the weekend and I need to get started on this. :-) Since he is always in a hurry, I can't get answers sometimes and I always have to rely on his paralegal. Anyway, my questions are the following.....
He said I need 6 months of profit and loss statements.When determining our income does the trustee rely on owner's drawings or is it what's on the profit and loss statements?
Also, on the profit and loss statement will the trustee be looking at the profit, which is after sales and cost of goods or the total income before cost of goods is deducted?
I know that there is a minimum my husband and I can make per year to qualify for chapter 7. What is that amount?
Response 1: The Trustee would review both. The Trustee would review what you stated as your income and what your Profit and Loss Statement shows to make sure that your figures are correct.
Response 2: Trustee would look at both to ensure that correct information is being put on the Schedules.
I know that there is a minimum my husband and I can make per year to qualify for chapter 7. What is that amount?
Response 3: You would be eligible to file for Chapter 7 bankruptcy protection, if you meet the Means Test—the Income Test. If your income is equal to or less than the current income guidelines for your family size in your state, you would be eligible to file for a Chapter 7 bankruptcy all things being equal. The income used in the Means Test calculation is the income for the 6 months before the filing of the bankruptcy petition. This means that if you are filing for bankruptcy protection this month, August 2013, the income that would be used is your income from February 2013 to July 2013. If you are filing next month, September 2013, the income that would be used in the Means Test calculation would be the income from March 2013 to August 2013, etc. In Chapter 7, if the Court grants you a Discharge your debts will be wiped out with some exceptions such as some taxes, child support, alimony, which are not dischargeable. You would get a clean state, a fresh start.
These are current income guidelines for the State of Maryland:
Family size of one person $58,269.00 Family size of two persons $73,685.00 Family size of three persons $87,206.00 Family size of four persons $108,915.00 Add $8,100.00 for additional individual
Oh my goodness. You don't even know how much you are helping me right now. I have some more questions.
Question 1: When we met with the Lawyer, he kept telling me that he needs 6 months Profit and Loss statements. However, when I look in quickbooks, there are two versions. A detailed one and then the standard one. Which one do you think he is talking about? If I print out the detailed one, it's very long.
Question 2: Also, he said the trustee was going to ask about our inventory. We don't have inventory sitting around. We have a computer business. My husband orders only what is needed and then it goes right back out the door. How specific is the trustee going to get about this? I just don't want the trustee to think we are hiding inventory.
Question 3: Are there any special considerations when a husband and wife are separated?
Question 4: I received a summons to court (from a credit card company) back in July and it's at 1pm this Monday. However, in the summons it states that if I plan to go to the trial to defend myself about the money owed that I need to let them know within 15 days. I didn't let them know because I do owe the money so what will happen now? Will I get in trouble if I don't show up anyway? Do I call them or just ignore it? And how can I stop the judgement after the court date?
Question 5: How long does the meeting usually last?
Thank you, XXXXX XXXXX Thank you for your quick reply before. Hope to hear from you today.
Hello: I am sorry for the delay in getting back to you. I went offline to run some errands. Your follow-up questions:
Response 1: Provide him with the standard one. Then if he needs the long one, you can provide that one at that time.
Response 2: All is required of you is that you have complete and accurate records for your business so that if you are audited by the U.S. Trustee's Office or if the Chapter 7 Trustee needs additional information, you can easily provide the records to them (through your Attorney).
Response 3: Unless you are legally separated, that is, there is Court Order for the separation, a spouse filing for bankruptcy protection must provided information requested for the other spouse. That is, both spouses’ incomes must be used in the Means Test calculation. Also and more importantly, if this is a business filing, Means Test calculation is not required. In addition, if your debts are primarily non-consumer debts, you would not be subject to Means Test requirements. This means that you can still file for Chapter 7 if your income is above the current income guidelines for your family size in your State.
Question 4: I received a summons to court (from a credit card company) back in July and it's at 1pm this Monday. However, in the summons it states that if I plan to go to the trial to defend myself about the money owed that I need to let them know within 15 days. I didn't let them know because I do owe the money so what will happen now?
Response 4(a): If your bankruptcy filing is imminent, that is, if your Attorney is about to file the case, you can just ignore the hearing because even if a Default Judgment is issued against you, you can put the Judgment in your bankruptcy filing. Also, once the bankruptcy case is filed, the Court case would be suspended pending the outcome of your bankruptcy case UNLESS the creditor files a Motion for Relief firm the Automatic Stay to get permission of the Bankruptcy to proceed with the Court case. I have NEVER known the credit card companies to do this. What commonly happens is that once the case is filed the debt collectors would back off. However, once the bankruptcy case is filed, you must inform the Court about the filing so that the case can be suspended. Your Attorney would not do this for you unless he specifically agreed to do it. So, you need to be prepared to send a Notice of Bankruptcy Case Filing that your Attorney would provide to you immediately after filing your bankruptcy case to give to the Court and fax to the creditor’s counsel.
Will I get in trouble if I don't show up anyway?
Response 4(b): No, but you would have Default Judgment against you. As stated previously, if your Attorney is about to file the case, then there is nothing to worry about. Once the case is filed, the Court case would be suspended. Notice of Bankruptcy Case filing MUST be provided to the Court so that the Court would suspend all hearings in the case. If the Bankruptcy case is successful, the Court would dismiss the case.
Do I call them or just ignore it?
Response 4(c): You can just ignore it, but see my previous responses.
And how can I stop the judgement after the court date?
Response 4(d): Judgment would be included in your bankruptcy case, making it worthless once you receive your Discharge Order from the bankruptcy Court. Now, this should not be confused with dismissal of the case. Discharge means that Court has granted your petition for relief and wiped out all the debts that are supposed to be wiped out with exception of child support, alimony, some taxes, student loans if you did not file a Complaint to Determine the Dischargeability of the loans and the Court rules that the loans can be discharged; Court fines, and penalties. Hopefully, your Attorney would file the case very soon after that to prevent the creditor/debt collector from putting a lien on your property and complicating your bankruptcy case.
Response 5: The Meeting of Creditors (Section 341 Meeting) does not last long, usually for few minutes. However, I have personally seen ones that lasted more than 30 minutes where there were many issues with the case and the Trustee asked many questions to try to get to the bottom of things. Usually this happens if the bankruptcy schedules were not completed correctly or assets were omitted, which were discovered by the Trustee, or a creditor actually shows up and tries to use the Meeting for "cross examination" of the debtor. However, creditors rarely show up for the meeting despite the name.
Ok, let me see if I understand. Lets say I file after the court hearing this Monday. All the Lawyer has to do is notify the courthouse even though I filed afterwards? Or does he notify him after the creditors meeting? If he does, this will stop the judgement? I don't trust him to that because my impression of him is not good.
Response: Immediately after the bankruptcy case is filed, YOU MUST NOTIFY THE STATE COURT SO THAT THE PROCEEDINGS ON YOUR CREDIT CARD CASE CAN BE STOPPED. YOUR BANKRUPTCY ATTORNEY HAS NO LEGAL DUTY TO SEND YOUR NOTICE OF BANKRUPTCY CASE FILING TO THE STATE COURT UNLESS YOUR FEE AGREEMENT REQUIRES THAT. All creditors that you list on your bankruptcy schedules are notified by the bankruptcy Court within two weeks of the bankruptcy case filing. The bankruptcy Court does not send any notice to other Courts. So, after the filing, you must notify the State Court of the filing so that the proceedings in your case can be stopped. You must also send a notice to the Plaintiff’s Attorney immediately to notify them of the filing—you send a copy of any document you file with the Court to opposing party/Counsel.
If a Judgment is issued, the Judgment cannot be enforced because the filing of the bankruptcy case would FREEZE COLLECTION ACTION ON THE JUDGMENT.
Got it. Thank you for clarifying. Sorry, I have more. I'm almost done with this string of questions. After you answer I will rate and give you a bonus. If I have anymore questions I will start a new topic. :-)
Question 1: The paralegal at the Lawyer’s office here told me that it was OK for me to use the trade in value for cars instead of the private party sell. I was glad because that makes our vehicles less in value so we qualify and are below the exemptions. However, I don’t trust what she is telling me because they all seem very disorganized at that office. Is this correct what she is telling me, considering that the private sale showed the cars worth more on Kelly Blue book? I’m very worried about this and do not know what the trustee wants. I can hardly ever meet with the lawyer and it’s like his paralegals do everything to block clients from him.
Question 2: If we had to sell something like our boat or even one of the vehicles, does the trustee make us sell them ourselves or does the trustee take the vehicles and sell them? I’m not sure how that all works since we don’t even know if we would be able to get the Kelly Blue book amount for any of them. And it seems like it wouldn’t make sense for my husband and I to sell them since we would just sell stuff for whatever we could get for it to get rid of it so we could move forward with the bankruptcy.Not sure what the trustee’s role is in this. Seems like t would be more trouble than it‘s worth.
Question 3: If we go over the exemptions, can we just borrow cash from a family member to pay the difference, or do we need to start selling items from our home and sell a vehicle or something? Not sure what the trustee’s role is in this. Seems like t would be more trouble than it‘s worth.
Question 4: On our business checking account statements, we have more withdrawals than deposits. Will this be a problem?
Question 5: Also on the business checking account statements, the deposits are more than what is on our Profit and Loss statement under total income (Basically the total sales and services). I’m assuming the trustee is going to look at that and think we put extra cash into the checking account as if we are doing cash jobs, but we are not. My husband couldn’t get a cash job if he tried these days. Businesses never pay in cash anyway. The extra cash are tax refunds and some other cash I had saved out to invest back into the business. Will this be a problem?
I am sorry, you need to open a thread for these brand new questions. The policy of this site requires that you open a new thread for brand new questions. I have already answered numerous brand new questions for you.Thank you for your cooperation.
Nevermind. I deleted what I had here and started new questions. I think I have figured this out how this site works now.
I just now saw this. I'm sorry. I didn't know. I will just ask you one question at a time then. Thanks
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