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What is a 341 Meeting in Bankruptcy?

 

Do you need to worry about your 341 meeting in bankruptcy?

Transcript:

Hi, I'm Matt MacArthur, bankruptcy attorney at Clear Counsel Law Group. I had somebody in my office the other day that was really upset and anxious and quite nervous about a meeting that we were going to have with creditors and the bankruptcy courthouse. This is a meeting that happens in all bankruptcy cases, and I thought this would be a great opportunity to address what goes on in these meetings, and perhaps to put all of your minds at ease about what actually occurs there. This meeting is called the 341 meeting of creditors. The 341 number comes from the section of the bankruptcy code that says that we have to have this meeting. The meeting of creditors part is perhaps a bit of a misnomer because creditors will rarely appear at these hearings. Creditors do have the opportunity to appear if they want to, but I would say it's probably less than 5% of cases, perhaps less, in which creditors actually do show up and ask questions. What usually happens is it'[s a meeting that happens at the bankruptcy courthouse down in a side-mediation type room, where a court official called a bankruptcy trustee will record the hearing and swear in the debtor under oath.

"Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth?" Type of oath. Once you're under oath, the trustee will ask you questions, and the trustee's purpose is typically twofold. One, the trustee is looking to determine whether not you actually filled out all the paperwork correctly, that everything was completely and accurately listed in the bankruptcy documents, that you actually reviewed these documents with your attorney and signed these documents authorizing the filing of the bankruptcy case. The second, the trustee is also looking to see whether not there's any assets that are unprotected or not exempt. The trustee is the individual that's responsible for collecting any nonexempt assets, selling them off for creditors in a Chapter 7 case, or making sure that adequate payments are being provided for in a Chapter 13 plan, and taking care of the administrative side of the bankruptcy case. If creditors are present, they'll have an opportunity to ask questions as well.

Obviously, you'll be under oath at this hearing, so the best advice that I can give is to tell the truth. You get into a lot of trouble when you don't tell the truth, and the vast majority of cases ... Individuals have nothing to hide anyway, so honesty is clearly the best policy at these hearings. A typical hearing lasts anywhere from 3-6 minutes depending on the complexity of the case. They can go much longer if there's a lot of complicated issues involving businesses or non-exempt assets, but the typical person filing for bankruptcy will only be in the courtroom where they're being questioned for a matter of minutes, and then they'll be on their way without any real reason to sweat. The biggest caution that I give to my clients is to tell the truth, and I try to tell all of them to relax because these are really ... Although they're unofficial hearings ... They are official hearings and you will be under oath, there's kind of a laid back setting to them. The trustees are typically very nice, and it's one more obstacle that you have to go through to get your bankruptcy discharge, but on a whole, these hearings are nothing to fear as long as you tell the truth. Then you've disclosed everything to your bankruptcy attorney. Your attorney will have you well-prepared for these hearings. This is Matt MacArthur, bankruptcy attorney at Clear Counsel Law Group, saying goodbye for now.

Bankruptcy / Bankruptcy Videos - 10/13/2015

Will I Get My Tax Refund if I File for Chapter 7 Bankruptcy?

 

What happens to your tax refund if you file for bankruptcy?

Transcript:

Hi. Matt MacArthur, Bankruptcy Attorney, Clear Counsel Law Group. I had somebody in my office the other day who was getting ready to file for Chapter 7 bankruptcy, and they asked a very common question. Am I going to be able to get my tax refund next year or am I going to lose it through filing for bankruptcy? The answer to this question is: it depends. Classic lawyer answer. It actually depends on a number of different things.

To answer the question, first, we need to back up a little bit and think what a Chapter 7 bankruptcy is. Chapter 7 bankruptcy is a liquidation bankruptcy. It involves the process of listing all of a persons assets and determining whether or not those assets are exempt or protected. Or whether they're going to be subject to liquidation or seizure by the bankruptcy court to be distributed to an individual's creditors in exchange for the discharge or the wipe out of the debt.

The question then becomes, so it relates to a tax refund, is a tax refund an asset that can be protected? This is where the depends part comes in. A tax refund is definitely an asset and it needs to be protected in order to be preserved for the individual to be able to keep the funds that come in the refund the following year. Whether or not it's something that can be protected is going to depend on what state the person is filing in and what state's exemptions or protective laws are available for this individual to claim as part of their bankruptcy process. It also depends on what the nature and make up of tax refund is. There are certain kinds of refunds that people will receive that contain something that's called Earned Income Credit. That's a very commonly protected portion of a tax refund. It also depends on the amount of the refund. There's several different factors that determine whether or not a person can keep their refund.

It's impossible for me to give a general answer for everyone whether or not they'll be able to keep their refund or not. Again, it's a very fact intensive analysis that we go through to determine whether or not a person can keep their refund.

If you come in and see me or another experienced bankruptcy attorney, I'll do my best to make sure we go through the facts of your particular case, and let you know, with a very high degree of certainty, what the outcome is going to be in relation to your tax refund for the following year. Until next time

 

Bankruptcy / Bankruptcy Videos - 10/09/2015

How Bankruptcy can Assist You with a Payday Loan

 

How will bankruptcy protect me from the unfair terms of a payday loan?

Transcript:

Some of the most aggressive predators that we come across are payday loan lenders. These payday loan lenders are notorious for charging high interest rates and putting people in a situation where it's near impossible to pay off these loans and get back to square one. Question often arises where a client asks me, can we wipe out the payday loans, and what can we do to stop these payday loan lenders?

The bankruptcy laws apply to the payday loan lenders just like they do all other creditors that would normally be encountered in a bankruptcy case. Now there are a couple of unique situations that apply directly to these payday loan lenders. Because of their aggressive tactics, one common situation that we come across is that in order to sign up for a loan in the first place, our clients have already granted the payday loan lenders direct access to their bank account. Now this means when the money is owed, they simply go into your bank and they take it out.

What we find is that when we file for bankruptcy and we send out a notice of bankruptcy, there are situations where the payday loan lenders are slow to update their systems and they continue to take money out of your bank account even after you've filed for bankruptcy. That's why it's very important to find an attorney that is aware of these issues, that will contact the payday loan lenders immediately upon filing your bankruptcy so that there isn't this issue.

Now, sometimes it happens where these payday loan lenders, either they're incompetent and they don't update their systems to reflect there's a bankruptcy automatic stay in place. In other words, that they can't touch your money in your bank account. Or they simply are ignoring the bankruptcy laws. This is money that can be taken back from those payday loan lenders. As long as we filed for bankruptcy before they take the money, that's money that we can get back. Again, I urge you that if you have payday loans, to speak with a bankruptcy attorney who can help you fight these very aggressive creditors and keep them off your back.

Bankruptcy / Bankruptcy Videos - 10/07/2015

Redemption: How to Declare Bankruptcy and Keep Your Car

 

Redemption Can Save Your Car in Bankruptcy

Transcript:

One of the worst investments you can make is to buy a brand new car and then to drive it off the lot. Everybody knows the moment you drive it off the lot the car depreciates in value. It's a very common situation for me to meet with people that have purchased a car and the financing is such that they owe much more on the car than the car is actually worth. There's something really cool that we can do to fix this terrible investment in a Chapter 7 Bankruptcy and it makes me pretty excited actually to tell you about this.

This is what we call a Redemption. The sound of that word just sounds good, Redemption. We've got this car; this car was a great car at one time. We wanted to buy it. We took out a big loan to pay for this car but now we're not so in love with the car anymore partly due to the fact that we owe so much money on the car.

What is a Redemption? A Redemption inside a Chapter 7 Bankruptcy is a situation where the car is worth less than what is owed and Chapter 7 Bankruptcy allows a person in this type of Bankruptcy to pay off this car for what the car is currently worth and not what you owe on the car under the contract terms. Now, a lot of people considering Chapter 7 Bankruptcy simply don't have the money, the thousands of dollars that's usually necessary to pay for the car in order to make the original creditor go away and release the title on the vehicle. However, we are able to obtain independent financing from a third party financial institution to obtain the funds and essential create a new loan for the car. This new loan is going to be for what the car is worth and not what you owe. We only do it in those situations where we're able to drop the principle amount owed on the car.

This also will be accompanied by lower monthly payments making the car more affordable in the near term future as well as the long term future. You may be thinking, "I'm filing for bankruptcy. I probably have very bad credit. How am I going to qualify for financing on this car?" There are lenders that specialize in this type of financing. It's going to result in a higher interest rate, usually in the neighborhood of 23-24% but if we're knocking off thousands of dollars off of the principle loan balance and we're able to lower your monthly payments t usually ends up being a good deal for you.

The really cool thing is if you've fallen behind on your monthly payments on your current car loan those monthly payments get rolled into the purchase of the vehicle and to the Redemption payoff. You're essentially starting a new loan in which you will be current and you won't be behind on your monthly payments anymore, the payments will be lower than what they were before and if you're able to pay off the car more quickly you're able to take advantage of that lower principle balance and the higher interest rates won't come back to bite you at all. I really believe in the Redemption process and it is a great option for a lot people that found themselves upside down in a car loan.

 

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Bankruptcy / Bankruptcy Videos - 10/02/2015

When are Creditors Allowed to Garnish Wages?

 

When are creditors permitted to garnish wages?

Transcript:

One question that I often get is, "When can a creditor start garnishing their wages?" The answer to this question is a little bit complicated. It all first starts with a debt that you owe a creditor. The creditor has a right to receive this money from you and if you don't make that payment, they can eventually take you to court and they will sue you and if you owe the money, there's really not that much of a defense that you can present in court to stop this creditor from getting a judgement. There may be some procedural or technical maneuvers that you can make to make the creditor's life more difficult and obtaining a judgement.

However, if you ultimately owe the money, the creditor will most likely eventually get a judgement against you. Once that creditor has reduced the amount that you owe them to the form of a judgement, they can take this judgement which is an order from the court that says that you owe that creditor the money and they can then take that judgement and get what we call a writ of execution. A writ of execution is essentially an order for the constable to go to your employer and start garnishing your wages. Now, what time frame is involved in this can vary depending on how quickly creditors are able to move through that initial state court lawsuit and obtaining a judgement and getting garnishment actually processed with the constable and with your employer. About the fastest that we usually see this process play out is about four to five days but you definitely want to act quickly once you've received a service of a summons for a state court action against you or a lawsuit because that means the creditor is actively seeking a judgement and we'll be seeking a wage garnishment against you in very short order.

Now, there are certain types of income that are exempt from wage garnishment or garnishment in general. Social security income in particular is a common type of income that I see that is exempt or protected meaning that even with a wage garnishment order or a writ of execution, there's no way for the creditor to take the money directly from that check that comes from the social security administration office. Now, there's a couple of different kinds of garnishment that we talk about. Another kind is taking money directly out of your bank account which we call a bank levy. Bank levy is a little bit different from a wage garnishment. In the wage garnishment they're taking money directly from your paycheck or from your social security check which they're not allowed to do. With the bank levy, they're taking money directly out of your bank account and instead of going to your employer, the constable goes to your bank and shows them that order that they're entitled to money and they can drain your bank account in order to pay off the debt that you owe them.

Now, bank levies are a little scary because I've come across a number of situations where creditors aren't very diligent in seeking out what type of money is being held in the account so even if you're holding protected funds, money that came from the social security office in your bank account, I've seen that money be levied and taken by creditors. Now, that's money you can get back but it's a difficult process to go through the mechanics of actually getting that money returned to you.

Along with this question of, "When can my wages be garnished?" is "What can I do to stop the garnishment?" There's two main ways of stopping the garnishment. One is to pay the money that you actually owe the creditor which if you're in the situation where you're being sued for this money, it's very unlikely that you have the money to pay them back. The other option is to file for bankruptcy and invoke the protections of the automatic stay of the bankruptcy code. Immediately upon filing for bankruptcy, the automatic stay goes into effect and it will stop a wage garnishment.

Bankruptcy / Bankruptcy Videos - 09/29/2015

Will Declaring Bankruptcy End the Harassing Creditor Phone Calls?

 

How Declaring Bankruptcy will help end the annoying phone calls from creditors:

Transcript

One of the first things that gets asked by clients when they come in and talk to me is, can I stop the annoying and harassing phone calls from all these creditors and will a bankruptcy stop these creditors from calling me? The answer is yes. The moment we file for bankruptcy, a law called the automatic stay goes into effect. Think of the automatic stay like a big collections freeze. It applies to virtually any and all creditors seeking to engage in any type of collection activity. That includes phone calls. Now there are certain circumstances in which the automatic stay may not go into effect. If, for example, you have a couple of recent bankruptcies that you filed earlier in the year that were unsuccessful and were dismissed, in those situations the automatic stay won't go into effect. If you have one previous dismissal, the automatic stay will expire after 30 days. You want to be very careful that you're aware of the limitations of the automatic stay.

Another situation where the automatic stay may come up a little bit short is in certain situations, creditors can ask for relief from the automatic stay where they essentially file a motion with the bankruptcy court and ask the bankruptcy court for permission to engage in collection activities against you. These situations are usually limited to secured creditors such as a mortgage company or a car company that has a loan in your name, and you haven't been making the payments on that loan. From a practical standpoint, if we're just talking about phone calls and stopping them, the automatic stay goes into effect immediately upon filing a bankruptcy, but the notice of the bankruptcy doesn't get sent out to these creditors until a few days have past. When we file your bankruptcy, we have a big list of your creditors along with their addresses. Then the bankruptcy court mails out notices of your bankruptcy filing to these creditors. The mailing may take a few days to get to these creditors and for them to update their systems before they actually are aware that you have actually filed for bankruptcy.

Now if the phone calls are annoying, and you want them to cease immediately, there's definitely the opportunity to tell these creditors that you've filed for bankruptcy, provide them with your bankruptcy case number, give them your attorney's contact information and let them know that they are not allowed to contact you directly. This should be sufficient to get the phone calls to stop. If for whatever reason that doesn't stop the phone calls, involve your attorney. Have your attorney make the phone call directly to these creditors. That's usually enough then to get their attention and get them to stop. If all of this fails and for whatever reason there's a creditor that's not willing to honor and comply with the federal law of the automatic stay, you have the option of asking the bankruptcy court to issue sanctions against a creditor who is particularly unruly and unwilling to follow the federal law.

I suggest that you consult with a bankruptcy attorney that has experience in these issues and that is familiar with your protections that are available to you by filing for bankruptcy. Your attorney will make sure that you get the very protection that's available under the law.

Bankruptcy / Bankruptcy Videos - 09/09/2015

What is the Difference Between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy?

Is it preferable to file a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy?

Transcript:

There are two main kinds of bankruptcies that people consider when they're thinking about filing for bankruptcy. The easiest, most straightforward bankruptcy that most people probably are thinking of when they're thinking about filing for bankruptcy, the Chapter 7 bankruptcy. In the Chapter 7 bankruptcy, we're talking about a liquidation, and a liquidation involves the sale of any assets that a debtor owns that cannot be protected. Now, in Nevada, we have very generous laws and many assets of a debtor can be protected, so in many instances, a debtor can keep virtually everything that they own and still file for a Chapter 7 bankruptcy. The process takes about three to four months, but there are some limitations on who can file for Chapter 7 bankruptcy. An individual that makes too much money is not allowed to file for Chapter 7 bankruptcy. They have to pass what's called the "Chapter 7 Means Test," and the Means Test basically boils down to whether or not this person has enough disposable income on paper to repay their creditors. If so, they probably belong in a Chapter 13 bankruptcy.

The Chapter 13 bankruptcy is the other main kind of bankruptcy that we usually encounter when we're speaking with potential clients. It involves monthly payments to your creditors, and the amount that you pay on a monthly basis depends in part on how much money you make and in part on what kinds of debts that you have. There are some other considerations that definitely go into which chapter of bankruptcy is most appropriate for an individual thinking about filing for bankruptcy, and there's definitely some situations in which you may want to avoid filing for one chapter or the other. I strongly recommend that you meet with a qualified and experienced bankruptcy attorney who can give you good advice on which chapter is best for you to get you the best possible result for your situation.

 

Bankruptcy / Bankruptcy Videos - 09/03/2015

What are the main mistakes in bankruptcy?

TRANSCRIPTION OF VIDEO:

The question is, what are the main mistakes that I've seen people make that prevent them from getting a discharge? The two most common scenarios that I've come across are where people fail to adequately disclose information to either their attorney or to the bankruptcy court, or they fail to appear at their required meetings.

Now, bankruptcy is a good deal and you're going to be discharging presumably a lot of debt in your bankruptcy case, so it's important that you play by the rules and it's important that you disclose everything. The bankruptcy court requires that certain information be disclosed and if you're in any kind of doubt as to whether or not it's something that is required to be disclosed or not, err on the side of disclosure and play it safe, so that you can make sure that your discharge order is not going to be jeopardized by failure to include some pertinent piece of information to your bankruptcy case.

It's also important that you show up to your meetings that are required. Now, by meeting I mean, principally, the 341 meeting of creditors. That's a meeting that everyone has to attend. So as long as you show up to that meeting and disclose all the information and play by the rules that the court wants to play by, you're going to receive a discharge order and avoid these common pitfalls.

 

 

Bankruptcy / Bankruptcy Videos - 07/30/2014

Can a creditor block my discharge?

TRANSCRIPTION OF VIDEO

The question is, Can a creditor block my discharge? The answer may be "Yes." In bankruptcy creditors are provided an opportunity to do what's called an objection to your discharge. That's basically a way in which they file an objection with the court, saying that their particular debt should not be subject to the discharge, or in some certain cases that you shouldn't be allowed to receive a discharge at all. Those cases are pretty rare; but if you haven't committed fraud, or you haven't otherwise committed some sort of wrongful injury to the creditor, the chances are very rare that a creditor will actually object to your discharge.

There is a deadline to object to this discharge. In the Chapter 7 case it's 90 days, roughly, after you've filed your bankruptcy case. If they haven't filed that objection to discharge within that time frame, they're time-barred, meaning they've missed the time frame in which they can file their objection. If they've missed that time frame in which to file their objection, then they can no longer file that objection and your discharge will be entered.

Bankruptcy / Bankruptcy Videos - 07/30/2014

Do I have to tell my attorney about all of my assets in bankruptcy?

TRANSCRIPTION

Question is, do I have to tell my attorney about all of my assets in a bankruptcy? The simple answer is yes. You want to tell your attorney about all of your assets. The bankruptcy laws require that you disclose all of your assets, all of your income, all of your expenses and all of your debt.

Now, in order for your attorney to give you proper and adequate advice, your attorney is going to need to know about all of the assets because it's going to be required that your attorney include all of that information in your bankruptcy paperwork. So err on the side of disclosure and tell your attorney about everything, probably more than he or she wants to hear, and you'll be in good hands.

Bankruptcy / Bankruptcy Videos - 07/30/2014
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