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What is an Automatic Stay when it comes to Bankruptcy?

By In The News

Before you file bankruptcy, creditors often call, harass, and even repossess your property. The second you file bankruptcy a creditor must cease all actions against a debtor pending the “Automatic Stay.” The Automatic Stay is like a fictitious concrete barrier between you and the creditor. If you like football, it’s like an offensive line that never gives up a sack, and you’re the quarterback. There are only a few exceptions that allow a creditor to get around the Automatic Stay, but they are limited (for more on Stay Relief, read the posting, What is Stay Relief?).

The Automatic Stay is guaranteed to last a minimum of 90 days from when you file bankruptcy, sometimes it can last much longer. The reason for the Automatic Stay is to allow the bankruptcy process to work. Because the Automatic Stay is in place, debtors can work with their attorney, the trustee, the court, and even creditors to optimize the process. The automatic stay provides a debtor with a temporary relief while the debtor awaits a permanent relief at the end of the case. If you would like to learn how the automatic stay can help your situation, just give us a call.

What is Stay Relief?

By In The News

When you file bankruptcy, secured creditors, the ones who you generally borrowed money from to purchase a car, home, furniture, or an appliance, want to make sure that the car, home, furniture, or appliance is safe during the bankruptcy. This is because that particular item is securing the loan you have with that lender. In other words, if you stop paying or don’t pay enough, they we will repossess the item to compensate them for the loss. However, during bankruptcy creditors can’t go repossess items unless the court gives them permission. This is because the “Automatic Stay” prevents the creditor from acting as it normally would outside of bankruptcy (for more on the “Automatic Stay” read the posting What is the Automatic Stay?)

There is only one way for a secured creditor to get permission—to file motion for stay relief. There are two reasons that a creditor would win a motion for stay relief. First, if there is no equity. For example, if your car is worth $7000.00 and you still owe the bank $8,000.00, there is no equity in the car and the creditor could get stay relief. Conversely, if the car is worth $8,000.00 and you still owe the bank only $7,000.00, there is equity in the car and the creditor could not get stay relief. The second way for a creditor to win on stay relief is to prove “cause.” This pretty much means that the creditor needs to show that he is not protected. For example, you have a car loan with a bank and the car is in your possession but it isn’t insured, the creditor would win a stay relief motion because the item is unprotected in the event that you get in an accident.

What is the Timeline for Bankruptcy?

By In The News

Our goal is to get you through the bankruptcy process quick and smooth. Complicated cases can make the process go longer, but here is a general idea of the events that take place from now until the end:

  1. Free Initial Consultation;
  2. Barring the need to file and emergency petition, we will take about a week getting your petition ready to file;
  3. Before we file, we will have another meeting with you to review the petition and sign it (be patient at this meeting, petitions are 50-100 pages long and require multiple signatures);
  4. A few days after we file, we will get a notice from the Court setting the date and time for your first court hearing, which is called the 341 Meeting of Creditors.
  5. About a week after we file, you’ll get a letter from the trustee appointed over your case, the letter will ask you to send the trustee some information;
  6. About a month after we file, we’ll attend the 341 Meeting of Creditors at the court house;
  7. Assuming all has gone smoothly, 60 to 90 days after the Meeting of Creditors, the Court will issue a discharge, which eliminates your debts; and
  8. About 60 days after the discharge, the case will officially close.
  9. There are a number of things that are left out of this general timeline that we will assist you in getting done. The key that we focus on is continual communication from beginning to end.

Our Promise is an Extremely Detailed Approach

By In The News

A great bankruptcy experience is accomplished when your attorney is thorough and takes the time to get to know the ins and outs of your case on an extremely detailed level. There’s a relatively easy way to tell whether an attorney has taken the time to prepare and get to know your case.

A little over a month after you file your bankruptcy you will attend what we lawyers refer to as a 341 meeting. This meeting is with a trustee appointed by the United States Trustee’s Office which is under the direction of the United States Department of Justice. In that meeting, the trustee will ask you questions under oath about your case. There will be between 8 and 20 other people in the room, as these meetings are public. Generally, the other people present are individuals just like you who have filed bankruptcy and their attorneys. Time and time again, a debtor filing bankruptcy is subjected to very difficult questions by a trustee. Often times, the reason the client is being treated in this manner is because the attorney did not prepare well enough and does not know the case on an “extremely detailed” level.

Clients waiting their turn and watching as these individuals fall victim to lazy lawyering get nervous. However, you need not worry because of the level of preparation we put into each and every case. I can’t promise you that tough questions won’t be asked in that meeting. However, I can promise you that because of our “extremely detailed approach” you will not be a victim of one of the “high volume” practices that sees you merely as another retainer paid. Give us a call today for a free consultation.