Q: What is the Meeting of Creditors and do I have to go?
A: A Meeting of Creditors is required by the Bankruptcy Code for all persons seeking relief. It is an informal meeting between the Debtor and the Trustee to determine the Debtor’s compliance with the requirements of the bankruptcy code as well as confirm the assets and liabilities of the Debtor.
Q: Will a Trustee take my tax refund if I file for bankruptcy?
A: That’s going to depend on the amount of refund and timing of filing. To have analysis, please Contact Us.
Q: What is this Confirmation Hearing in a Chapter 13 case?
A: Confirmation is the formal hearing where the court examines the Chapter 13 plan and the plan hopefully is accepted and becomes binding on all creditors in the case. Confirmation hearings generally do not require the Debtor to appear and may, in some cases, be waived by the Trustee if the Plan is sufficiently solid.
Q: Do I have to pay my homeowner’s association dues, if I file for bankruptcy?
A: Yes. Any arrears that you may have accrued go away but the continuing obligation to pay homeowner’s dues is not erased by a bankruptcy case. In years past, Debtors could discharge and reject the homeowner’s dues obligation but Congress took away that loophole in 2005. In some states, not only do the homeowner’s dues create a personal responsibility against the homeowner but they also may become a lien on real property. This is the case in New Jersey.
Q: Does my bankruptcy affect my spouse?
A: Generally no, however, joint debts might cause additional complications. This is a question that requires individual analysis on a case by case basis.
Q: Why would I be asked for my spouse’s income and expenses?
A: The reason that the bankruptcy trustees will demand this information is because the Trustee wants to ascertain the complete household income and total expenses affecting the Debtor. It is often in your best interest to put in spousal expenses because every dollar the spouse spends for their own benefit and not for the household can make the means test easier to pass.
Q: What happens if I file for bankruptcy and suddenly inherit something?
A: This is a thorny issue for any bankruptcy practitioner. The bankruptcy estate includes any property acquired by the Debtor by reason of inheritance, divorce settlement or life insurance payout within 180 days after the filing of the petition. If you inherit anything within that time frame, it belongs to the bankruptcy estate and you should speak to your attorney as soon as possible.
Q. How do I know if I can file for bankruptcy?
A. Bankruptcy, like ice cream, comes in several different “flavors”. For individuals, there are considerations such as your income, your interests in real estate, insurance policies, and other assets that may affect what kind of bankruptcy you need, Chapter 7, Chapter 13, Chapter 11 or Chapter 12. Businesses have different issues, most importantly – whether they intend to stay in business or shut down. The first task of any lawyer in bankruptcy cases is to have a detailed and careful discussion with a client to determine what will be in the client’s best interest and provide the most effective debt relief possible.
Q. I have a car, a house, and other things. Will I lose everything in a bankruptcy case?
A. This is going to depend on what flavor of bankruptcy you are working with. In Chapter 7, the equity in your property will determine if you get to keep it. In Chapter 13, you can keep most things, but sometimes certain luxury items that you still owe money on may have to go in order to help you restructure your life. Nevertheless, in most cases people keep all or almost all of their possessions.
Guardianship and Disability FAQ
Q. My child is turning 18 and is disabled. Do I NEED to be his/her guardian?
A. Guardianship depends on the level of disability and whether or not the soon-to-be adult lacks the ability to function as an adult in society. You will need doctors’ evaluations to show that the potential ward is, in fact, disabled and “incapacitated” within the meaning of the law. Once a child turns 18, however, the law presumes him or her to be an adult and if he or she cannot take care of him or herself as an adult due to a disability, a guardianship may be required.
Q. How do I know if I need to set up a special needs trust?
A. Special Needs Trusts are needed where the person who is to be the beneficiary is going to need federal or state benefits, such as Medicaid. These are asset-limited benefits, meaning that if the recipient has too much in the way of assets, benefits will be denied. If your child will be getting those kinds of benefits because of a disability, a Special Needs Trust may be needed to protect the benefits but let that child have the benefit of the family wealth.