Tag Archive: attorney


The above statement, or some variation thereof, is something that as a bankruptcy attorney I hear a lot.  And it is not really a surprise – a lot of people today find that they have a particular problem with one thing (think mortgage), but are really ok as far as everything else is concerned.  Of course, every now and then the variation on this statement goes something like “I shop at Kohl’s a lot, so I don’t want to include them in the bankruptcy, just all of the other stuff”. 

The misconception lays in the word ‘include’.  It is really not an appropriate word to use in the context of bankruptcy.  When you file for bankruptcy relief ALL OF YOUR DEBTS must be listed.  No ifs, ands or buts about it.  Just like all of your assets must be listed.  So in the sense of listing your creditors, and notifying them of your filing, everything must be ‘included.’   

Here is where it gets complicated, though.  Just because a debt is ‘included’ in the sense that it was listed on your petition, does not necessarily mean the debt will be discharged.  For example, student loans and certain tax debts are not dischargeable.  They have to be listed, and for all intents and purposes they are ‘included’…..BUT, they are not included in the debts that are discharged.  Other debts that are ‘included’ but not discharged, are those debts that you reaffirm during your bankruptcy, so you can keep the collateral (usually for a car). 

Now, if you have a credit card that has a zero balance, you do not own a debt to that particular creditor and it does not have to be listed on your petition.  It is NOT  good idea, however, to pay off that Kohl’s card so you don’t have to list it, because eventually Kohls – or whoever – will discover that you filed for bankruptcy relief, and even though you did not owe them any money at the time of your filing, they will likely either raise your APR, lower your balance, or shut down your card altogether. 

In short, EVERYTHING is included in your bankruptcy in one way or another.  Talk to your attorney to make sure you understand what this means for you.

Anyone who files for bankruptcy relief has to attend a Section 341 Meeting of Creditors (or Creditors Meeting).  This is a requirement under the bankruptcy code, and a debtor will not receive his discharge if he fails to appear at the date and time set for his creditors meeting.  Instead, his case will be dismissed, and the debtor has to re-file and face the consequences associated with that.

Now, the creditors meeting sounds like a pretty scary concept. For one, you have to go to the bankruptcy court for it.  Two, it’s called the ‘creditors meeting’!! Your creditors are the reason why you are here in the first place, and many of you have had just about enough of them.  All in all, though,  it is not that scary, and 9 out of 10 of my clients walk out of their creditors meeting going “that was it?”. 

As I said, the code mandates that a creditors meeting takes place. This process is virtually the same for Chapter 7 debtors as well as Chapter 13 debtors.   The court schedules the date and time of your creditors meeting after your petition has been filed and a trustee has been assigned to your case.  This date can only be changed in extraordinary circumstances, and I typically recommend not changing it, as delaying your creditors meeting inevitably means a delay of your discharge.  The date is approximately 30 days after your petition has been filed.  As your attorney, I get notified via email within about 24 – 48 hours of the exact time and date.  Within a few days after that, the official Notice of Creditors Meeting is sent not only to you, but to all of your creditors as well. 

In Arizona, the appointments are set in half-hour increments, and each half-hour portion of the day is assigned to a number of different cases filed in the same Chapter.  This of course means that (a) your creditors meeting is neither private nor confidential, but (b) all the other folks there are there for the same reason you are: To avail yourself of the relief granted to you by the bankruptcy code. 

While the creditors meeting may take place in the actual court building, it is not held in the court room, and the judge will not be there.  Instead, the trustee assigned to your case runs the show.  On your appointed time, you will enter the room along with your attorney, and all the other debtors assigned for the same time slot. The trustee will call your name and you are then required to provide him with a photo id as well as proof of your social security number (i.e. your social security card).

The trustee then swears you in.  The law requires that the trustee asks you a number of questions under oath.  This is important, because even if you have to discuss something that may cause your case to hiccup a bit with the trustee, doing so is really the only option that you have: Perjury – or lying under oath – is a crime – and whatever the hiccup, it’s not worth it.  The standard questions the trustee asks are always pretty much the same.  A few examples include:

  • Have you assisted in the preparation of the petition and schedules filed in your case?
  • Is all the information true and accurate? 
  • How long have you lived in Arizona?
  • Have you ever filed for bankruptcy before?

You know, standard stuff – things your attorney can talk to you about before the creditors meeting ever takes place, if only to calm your nerves.  Once that portion of the questioning is done, the trustee then has the chance to ask you any other questions he may have about the information contained in your schedules. These questions are typically related to your assets, such as ‘how did you come up with the value for that grandfather clock’ or ‘what is your interest in the XYZ partnership exactly, and what kind of returns are you expecting’.  These questions are a little harder to predict, as they are based on your specific case, but a good attorney will know how to issue spot your petition and give you an idea of what kind of questions might be expected, if any.

Now, about the creditors…. it is called a creditors meeting after all.  The bottom line on that is they have the right to appear and question you under oath, but they hardly ever do.  I have only had one instance of a creditor showing up, and that was coordinate the surrender of my clients vehicle.  Now, I am not saying they never show up – it happens and it can happen to you.  In the event that it does, just remember to stay calm, TRUTHFULLY answer all of their questions (as you are still under oath) and don’t forget to breathe. 

Remember, no matter how scary, stressful or frustrating this feels right now, you will likely be relieved when the meeting is over, and wonder why you were so worried in the first place.

Are thoughts like this going through your head?  What about “Which bills should I pay this month…?” or “Why won’t they stop calling me?”  If you find yourself in a financial situation that is worse than what you had hoped for in this stage of your life, and for whatever reason you find that your debts are eating you alive, bankruptcy just may be the answer to your questions. 

Here is a little step-by-step guide to follow after you have asked yourself the above question:

  1. Take a deep breath… there are options out there – and one will be right for you. Remember – sticking you head in the sand, and ignoring the problems around you never works.
  2. Start doing some research.   (If you are reading this, you are on the right track).
  3. Take another deep breath.  Come to the realization that there is A LOT of information out there – not all of it from particularly good sources, not all of it correct, and most likely none of it fitting your particular situation.
  4. Begin researching bankruptcy attorneys in your state. 

Yes, attorneys.  I realize there is a whole variety of options out there, from document preparers, to debt relief organizations, but the bottom line NEVER CHANGES: Only an attorney can give you legal advice – only an attorney can help you realize the full picture.  Also, on a side note, the guys with the sign on the side of the highway advertising $200 bankruptcies – they are, typically, document preparers.  You know what a document preparer does?  He fills out your forms, based on the information you give him.  He cannot give you legal advice, he is not qualified to give you legal advice, and guess what else?  Once he is done filling out the forms, he’ll most likely hand them back to you and send you on your merry way to figure out not only how to maneuver the bankruptcy system, all on your own. 

So, back to researching your attorneys.  Even though this rarely is the reality of things, but the price should be your least important factor in determining whether to hire an attorney.  Arizona bankruptcy attorneys all know what the other charges, in a round about way, we all have our own ways of figuring out what is fair for you, and keeps our bills paid.  The most important factor is ‘are you comfortable with the person that proposes to represent you?’.  Don’t get me wrong, you’re not going to go steady with your attorney, but you will have to work closely with him or her in preparing and planning your way to a fresh start.  Your attorney is your advocate, counselor and legal representative, and if you just don’t see eye to eye with him or her, it might not be the right fit for either one of you.

If you think you are comfortable going from an intake clerk to a paralegal – kind of passing the attorney in the hallway somewhere in between there, and having the paralegal be your main point of contact – by all means, go with one of the big guys.  Their attorneys are highly competent, and on the couple of occasions you get to talk to one of them, you’ll probably like him or her.  If, on the other hand you would prefer to have your actual attorney walk you through the process, with her support staff doing exactly that – supporting her in the data gathering and logistics, then you may be better of with a smaller firm. 

Aside from that, working style also matters greatly.  Take me for example: If you do not have email, or you only check it about once a month to see what the grandkids are up to – then I’m probably not the right fit for you.  On the other hand, if you value getting your questions answered quickly, both in writing, and if needed over the phone, then I might just be your gal.

To sum up, there are a multitude of options out there.  Even though it may feel like it right now – the world is not in fact collapsing around you.  Always remember, knowledge is power, and getting this knowledge from a licensed attorney will empower you to take your life back, and get your fresh start.