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Debtors FAQs

  • What is the automatic stay?

    The automatic stay is a powerful provision of the Bankruptcy Code. With some exceptions, it requires all creditors to cease collection efforts, harassment, and foreclosure actions. It permits the debtor to attempt a repayment plan or simply to be relieved of the financial pressures that drove them into bankruptcy. The automatic stay also protects creditors. Without it, certain creditors would be able to pursue their own remedies against the debtor’s property. For more information about the automatic stay.  See section 362 of the Bankruptcy Code.

  • What happens if a creditor attempts to collect a debt after a bankruptcy petition is filed?

    In some circumstances, parties who violate the automatic stay can be held in contempt of court and held liable for damages.  There are exceptions to the automatic stay. For a complete understanding, please read section 362 of the Bankruptcy Code or speak to a competent bankruptcy attorney. In chapter 13 cases, please read all of section 1301.

  • What if I filed a lawsuit before the bankruptcy case was filed?

    In a chapter 7 case or a chapter 11 case in which a trustee has been appointed, if the debtor is a plaintiff in a lawsuit that is pending when the bankruptcy case is filed, the debtor must notify the trustee of the lawsuit.  Depending on the circumstances, the trustee may permit the pending case to continue or seek to replace the debtor as the plaintiff.  Usually, in a chapter 11 (where no trustee has been appointed) and a chapter 13 case, the debtor can continue to prosecute the pending lawsuit.  This is a complicated area and the debtor should consult an attorney for advice.

  • How can I get my bankruptcy off my credit report?

    The Bankruptcy Court has no jurisdiction over credit consumer reporting agencies and the court does not notify reporting agencies when a bankruptcy case is filed.  Nor can the court request that a specific record be changed. Information on your credit report has generally been reported by your creditors and is gathered from public sources by the reporting agencies.

    The Fair Credit Reporting Act, 15 U.S.C. Section 1681, is the law that controls consumer reporting agencies. The law states that reporting agencies may not report a bankruptcy case on a person's credit report after ten years from the date the bankruptcy case is filed. Generally, most negative credit information is removed after eight years.

    If you have a complaint about a company, organization or business practice, you may wish to contact the Federal Trade Commission (FTC), Consumer Response Center, 600 Pennsylvania Ave. NW, Washington, D.C. 20580. The toll-free FTC help-line number is: 1-877-382-4357. That office can also provide further information on reestablishing credit and may be able to help you in addressing other credit problems. Further information about your rights under the Fair Credit Reporting Act and corrections to credit reports is available on the FTC website.

  • How do I make a correction or addition to my schedules if they have already been filed?

    Tell your attorney immediately.  If you do not have an attorney, you will need to file the amended schedules with the court. Amended schedules or statements must be designated as “Amended.” Please carefully review the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules.  If the amendments include the addition of a creditor not previously listed in the schedules, you must pay a filing fee.

  • Can I reopen my case?

    Any party in interest may file a motion to reopen a bankruptcy case, with the applicable filing fee.   The bankruptcy judge will determine whether or not to reopen the case and may hold a hearing on the matter.

  • What is a Reaffirmation Agreement?

    This is a voluntary agreement between a creditor and a chapter 7 debtor. The debtor agrees to pay all or a portion of an otherwise dischargeable debt. To be enforceable, the agreement must be filed in the debtor’s bankruptcy case before the entry of the discharge. The Court may schedule a hearing on a reaffirmation agreement. The debtor and their attorney (if represented) must attend. Refer to 11 U.S.C.  524 of the Bankruptcy Code for detailed information.

  • How do I object to a creditor’s claim?

    A chapter 7 or chapter 13 trustee or a debtor in a chapter 11, 12, or 13 debtor may object to a creditor’s claim if he or she believes that the claim is inaccurate. Usually, an objection to claim is initiated by filing an objection to the claim in the Bankruptcy Court.  In some circumstances, the objection must be initiated by filing an adversary proceeding. A debtor should seek the advice of an attorney as soon as possible because the objection process can be complicated and time sensitive.

  • What is a discharge?

    A discharge order issued by the Court permanently prohibits creditors from taking action against a debtor personally to collect debts incurred before the filing of the bankruptcy petition.

    The discharge does not prevent secured creditors from seizing collateral if payments are not kept up. Usually, the discharge does not prevent collection of debts incurred after the filing of the bankruptcy. Some debts generally are not dischargeable, and some debts are not dischargeable under certain circumstances. If you have questions about your discharge, consult with an attorney.
    Some examples of debts that may not be discharged include: certain taxes and fines, debts not listed in your bankruptcy, alimony, child maintenance or support, debts from willful and malicious injury to another, debts created through fraudulent conduct or by providing false information to a creditor. For a complete list of non-dischargeable debts, see section 523 of the Bankruptcy Code (for chapter 7 cases) and section 1328 (for Chapter 13 cases).

  • What is the difference between a discharge being denied and a debt being declared nondischargeable?

    The court may deny the Debtor’s discharge of all debts, or determine that a particular debt or debts are nondischargeable. If the court denies the discharge of all debts, then the Debtor will still be legally responsible for all the debts as if no bankruptcy petition had ever been filed. If only certain debts are ruled nondischargeable, the Debtor will still receive a discharge order. However, the Debtor will remain legally responsible for the nondischargeable debts.

  • How do I know which debts are discharged?

    Certain debts are nondischargeable only if the creditor files an adversary proceeding (lawsuit) with the bankruptcy court and proves one of the grounds for denial of the discharge or for a debt to be declared nondischargeable. See sections 523(a)(2), (4) and (6) of the Bankruptcy Code.  For other debts, disputes regarding dischargeability may be determined at any time in either the bankruptcy court or in the appropriate state or federal court.

  • I received a discharge, but creditors keep calling me. What do I do?

    If a debt has been discharged, a creditor attempting to collect the debt may be violating the discharge injunction. You should speak with attorney about the rights you may have.

  • When can I file bankruptcy again?

    A debtor is not eligible for a discharge in a chapter 7 case if: (1) the debtor received a discharge under chapter 7 or chapter 11 in a case filed within eight years before the petition is filed; or (2) the debtor received a discharge in a chapter 12 or chapter 13 case filed within six years before the date of the filing of a chapter 7.   There is an exception: if in the prior chapter 12 or chapter 13 case (1) the debtor paid all "allowed unsecured" claims in the earlier case in full, or (2) the debtor made payments under the plan in the earlier case totaling at least 70 percent of the allowed unsecured claims and the debtor's plan was proposed in good faith and the payments represented the debtor's best effort.