Questions and Answers

Questions and Answers

BANKRUPTCY– PART 4


Credit Counseling and Debtor Education Courses

All individual bankruptcy filers are required to complete pre-bankruptcy credit counseling and pre-discharge debtor education. These may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtor education must take place after you file.

Certificate of completion for both credit counseling and debtor education are required before the filer’s debts can be discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates for filers in all states and territories except for Alabama and North Carolina.

 

If you need more info, call Attorney Linda Fessler at 213-446-6766 for a free consultation.

 

 

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BANKRUPTCY — PART 3

BANKRUPTCY PART 3  

How Chapter 7 Works

A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. (3) In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.

The courts must charge a $245 case filing fee, a $75 miscellaneous administrative fee, and a $15 trustee surcharge. Normally, the fees must be paid to the clerk of the court upon filing. With the court’s permission, however, individual debtors may pay in installments. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Fed. R. Bankr. P. 1006. For cause shown, the court may extend the time of any installment, provided that the last installment is paid not later than 180 days after filing the petition. Id. The debtor may also pay the $75 administrative fee and the $15 trustee surcharge in installments. If a joint petition is filed, only one filing fee, one administrative fee, and one trustee surcharge are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 707(a).

If the debtor’s income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and the debtor is unable to pay the chapter 7 fees even in installments, the court may waive the requirement that the fees be paid. 28 U.S.C. § 1930(f).

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must provide the following information:

  1. A list of all creditors and the amount and nature of their claims;
  2. The source, amount, and frequency of the debtor’s income;
  3. A list of all of the debtor’s property; and
  4. A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse are required so that the court, the trustee and creditors can evaluate the household’s financial position.

Among the schedules that an individual debtor will file is a schedule of “exempt” property. The Bankruptcy Code allows an individual debtor (4) to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of the debtor’s home state. 11 U.S.C. § 522(b). Many states have taken advantage of a provision in the Bankruptcy Code that permits each state to adopt its own exemption law in place of the federal exemptions. In other jurisdictions, the individual debtor has the option of choosing between a federal package of exemptions or the exemptions available under state law. Thus, whether certain property is exempt and may be kept by the debtor is often a question of state law. The debtor should consult an attorney to determine the exemptions available in the state where the debtor lives.

Filing a petition under chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. 11 U.S.C. § 362. But filing the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Between 21 and 40 days after the petition is filed, the case trustee (described below) will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator (5) schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor’s financial affairs and property. 11 U.S.C. § 343. If a husband and wife have filed a joint petition, they both must attend the creditors’ meeting and answer questions. Within 10 days of the creditors’ meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b).

It is important for the debtor to cooperate with the trustee and to provide any financial records or documents that the trustee requests. The Bankruptcy Code requires the trustee to ask the debtor questions at the meeting of creditors to ensure that the debtor is aware of the potential consequences of seeking a discharge in bankruptcy such as the effect on credit history, the ability to file a petition under a different chapter, the effect of receiving a discharge, and the effect of reaffirming a debt. Some trustees provide written information on these topics at or before the meeting to ensure that the debtor is aware of this information. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the meeting of creditors. 11 U.S.C. § 341(c).

If you need more info, call Attorney Linda Fessler at 213-446-6766 for a free consultation.

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Bankruptcy– PART 2

 

Part 2- Bankruptcy Basics

This chapter of the Bankruptcy Code provides for “liquidation” – the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.

If the debtor’s “current monthly income” (1) is more than the state median, the Bankruptcy Code requires application of a “means test” to determine whether the chapter 7 filing is presumptively abusive. Abuse is presumed if the debtor’s aggregate current monthly income over 5 years, net of certain statutorily allowed expenses, is more than (i) $12,850, or (ii) 25% of the debtor’s non-priority unsecured debt, as long as that amount is at least $7,700. (2) The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to chapter 13 (with the debtor’s consent) or will be dismissed. 11 U.S.C. § 707(b)(1).

Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.

Background

A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor’s property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property; but a trustee will liquidate the debtor’s remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property.

Chapter 7 Eligibility

To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). Subject to the means test described above for individual debtors, relief is available under chapter 7 irrespective of the amount of the debtor’s debts or whether the debtor is solvent or insolvent. An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1). Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.

If you need more info, call Attorney LindaFessler at 213-446-6766 for a free consultation.

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Bankruptcy— PART 1

These excerpts taken from uscourts.gov website

 

Bankruptcy

Bankruptcy helps people who can no longer pay their debts get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect financially troubled businesses. This section explains the bankruptcy process and laws.

About Bankruptcy

Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court. A petition may be filed by an individual, by spouses together, or by a corporation or other entity.

All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.

There are different types of bankruptcies, which are usually referred to by their chapter in the U.S. Bankruptcy Code.

  • Individuals may file Chapter 7 or Chapter 13 bankruptcy, depending on the specifics of their situation.
  • Municipalities—cities, towns, villages, taxing districts, municipal utilities, and school districts may file under Chapter 9 to reorganize.
  • Businesses may file bankruptcy under Chapter 7 to liquidate or Chapter 11 to reorganize.
  • Chapter 12 provides debt relief to family farmers and fishermen.
  • Bankruptcy filings that involve parties from more than one country are filed under Chapter 15.

Bankruptcy Basics provides detailed information about filing.

Seeking the advice of a qualified lawyer is strongly recommended because bankruptcy has long-term financial and legal consequences. Individuals can file bankruptcy without a lawyer, which is called filing pro se.

Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples. Use the forms that are numbered in the 200 series if you are preparing a bankruptcy on behalf of a nonindividual, such as a corporation, partnership, or limited liability company (LLC). Sole proprietors must use the forms that are numbered in the 100 series.

 

If you need additional information, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.

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DACA ENDS

Top 5 Things to Know About President Trump’s Announcement to End DACA

On September 5, 2017, U.S. Attorney General Jeff Sessions, on behalf of the entire Trump Administration, announced an end to the DACA program. Here are the top 5 things to know about his announcement:

  1. Your DACA is valid until its expiration date.
    DACA and work permits (Employment Authorization Documents) will remain valid until its expiration date. To determine when your DACA and work permit expires, look at your I-795 Approval Notice and the bottom of your Employment Authorization Document (EAD).
    2. No new DACA applications will be accepted.
    United States Citizenship and Immigration Services (USCIS) no longer will accept or process first-time applications after September 5, 2017.
    3. DACA issuances and work permits expiring between now and March 5, 2018 must be submitted for renewal by October 5, 2017.
    If you have a permit that will expire between now and March 5, 2018, you must apply for a two-year renewal of your DACA by October 5, 2017.
    4. Advance Parole to travel abroad is no longer available.
    The Department of Homeland Security (DHS) will no longer grant DACA recipients permission to travel abroad through Advance Parole. Any pending applications for advance parole will not be processed and DHS will refund any associated fees.
    5. We are united in this fight.
    You are not alone. We mobilized, organized, and marched five years ago for DACA, and we will continue to do everything in our power to protect immigrant youth and their families across the country. Visit www.weareheretostay.org for resources to help you and your loved ones take care of yourselves in this difficult time as well as information on what you can do to take action now.

If you need additional info, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.

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WHAT DO I NEED TO KNOW IF THE DACA PROGRAM ENDS?

by Allison Davenport, Lena Graber, Sally Kinoshita
There are some reports that President Trump may end the Deferred Action for Childhood Arrivals (DACA) program soon. At this time, we do not know when or if the DACA program will be terminated or what the end of the program may look like. For example, will those with DACA continue to be protected from deportation and able to use their work permits until they expire? Or will DACA approvals and work permits be revoked? While the DACA program remains in effect at this time, below are some things to keep in mind should the program end.
I. Work Permits
Employment Authorization Documents (EADs), also known as work permits, are generally valid until they expire or the government demands they be returned. Unless the government demands that you return your work permit, the following points should apply.
If the DACA program ends but you are allowed to keep your work permit, you have the right to work legally until your work permit’s expiration date.
Even if the DACA program ends, you have no obligation to inform your employer that DACA has ended. Your employer does not have the right to ask you whether you are a DACA recipient or how you got your work permit.
Your employer does not have the right to fire you, put you on leave, or change your work status until after your work permit has expired. If your expiration date is nearing, your employer may ask you for an updated work permit but cannot take any action against you until after it is expired.
For more information about your rights as an employee see this advisory by the National Immigration Law Center: https://www.nilc.org/issues/daca/daca-and-workplace-rights/.
II. Social Security Numbers (SSNs)
Your SSN is a valid SSN number for life, even once your work permit and DACA approval expires.
If you have not done so already, apply for a SSN while your DACA and work permit are still valid.
You can and should continue to use the SSN you got under DACA as your SSN even after your work permit expires. You can use your SSN for education, banking, housing and other purposes.  Your SSN contains a condition on it that requires a valid work permit to use it for employment purposes.
III. Driver’s Licenses and Other Identification Cards
Eligibility for these depends on the state in which you live. If you have not already done so, apply for a driver’s license or state identification card if your DACA is still valid and that makes you eligible for a driver’s license or state-issued identification card in your state.
IV. Travel on Advance Parole
DACA recipients should be cautious about travel abroad on advance parole.
If you are outside the country with advance parole, make sure to return right away and while your advance parole and EAD are valid. If the DACA program ends, it is not clear that people with advance parole based on DACA will be able to return. The safest route is to return as soon as possible, before an announcement ending DACA.
If you have been granted advance parole under DACA but have not yet left the United States, or are interested in applying for advance parole, speak with an attorney to determine potential risks before doing anything.
V. Other Immigration Options
Many DACA recipients may be eligible for another immigration option to get a work permit or even a green card.
Talk to an immigration services provider to understand your legal options and if you might be eligible for another immigration benefit. Find low-cost immigration legal services: https://www.immigrationlawhelp.org
Avoid fraudulent service providers: confirm their credentials, ask for a written contract and a receipt for any payments, and if you have doubts, get a second opinion.
VI. Criminal Issues
Any criminal arrest, charge, or conviction can put you at risk with immigration authorities.
Avoid contact with law enforcement that may result in a criminal arrest. If you end up being arrested, make sure to consult an expert immigration attorney.
If you have a criminal conviction, find out if it can be changed to lessen the impact on a future immigration case you may have.
VII. Know Your Rights
Everyone – both documented and undocumented persons have rights in this country.
At all times, carry a red card to exercise your right to remain silent in case you are stopped or questioned by ICE (https://www.ilrc.org/red-cards).
You have constitutional rights:
DO NOT OPEN THE DOOR if an immigration agent is knocking on the door.
DO NOT ANSWER ANY QUESTIONS from an immigration agent if they try to talk to you. You have the right to remain silent. •
DO NOT SIGN ANYTHING without first speaking to a lawyer. You have the right to speak with a lawyer.  If you are outside of your home, ask the agent if you are free to leave and if they say yes, leave calmly.  GIVE THIS CARD TO THE AGENT. If you are inside of your home, show the card through the window or slide it under the door. I do not wish to speak with you, answer your questions, or sign or hand you any documents based on my 5th Amendment rights under the United States Constitution. I do not give you permission to enter my home based on my 4th Amendment rights under the United States Constitution unless you have a warrant to enter, signed by a judge or magistrate with my name on it that you slide under the door. I do not give you permission to search any of my belongings based on my 4th Amendment rights. I choose to exercise my constitutional rights. These cards are available to citizens and non-citizens alike.
VIII. Updates and Information
Follow the news carefully and go to reliable sources for information on the status of the DACA and other immigration programs. Don’t fall for scams about new fees or false information about your DACA work permit. Good sources of information include www.unitedwedream.org, www.informedimmigrant.com, www.defenddaca.com, www.ilrc.org, www.nilc.org and www.weareheretostay.org.
If you need further help, please call Attorney Linda Fessler at 213-446-6766 for a free consultation.
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