Bankruptcy Chapters

The court requires you are aware of the Bankruptcy Counseling Notice by having your sign a document that contains this body.

NOTICE TO INDIVIDUAL CONSUMER DEBTOR UNDER § 342(b) OF THE BANKRUPTCY CODE

In accordance with § 342(b) of the Bankruptcy Code, this notice: (1) Describes briefly the services available from creditcounseling services; (2) Describes briefly the purposes, benefits and costs of the four types of bankruptcy proceedings you may commence; and (3) Informs you about bankruptcy crimes and notifies you that the Attorney General may examine allinformation you supply in connection with a bankruptcy case.You are cautioned that bankruptcy law is complicated and not easily described. Thus, you may wish to seek the advice ofan attorney to learn of your rights and responsibilities should you decide to file a petition. Court employees cannot give you legal advice.

Notices from the bankruptcy court are sent to the mailing address you list on your bankruptcy petition. In order to ensurethat you receive information about events concerning your case, Bankruptcy Rule 4002 requires that you notify the courtof any changes in your address. If you are filing a joint case (a single bankruptcy case for two individuals married to eachother), and each spouse lists the same mailing address on the bankruptcy petition, you and your spouse will generallyreceive a single copy of each notice mailed from the bankruptcy court in a jointly-addressed envelope, unless you file astatement with the court requesting that each spouse receive a separate copy of all notices.

SERVICES AVAILABLE FROM CREDIT COUNSELING AGENCIES

With limited exceptions, § 109(h) of the Bankruptcy Code requires that all individual debtors who file for bankruptcy relief on or after October 17, 2005, receive a briefing that outlines the available opportunities for credit counseling and provides assistance in performing a budget analysis. The briefing must be given within 180 days before the bankruptcy filing. The briefing may be provided individually or in a group (including briefings conducted by telephone or on the Internet) and must be provided by a nonprofit budget and credit counseling agency approved by the United States trustee or bankruptcyadministrator. A list of approved budget and credit counseling agencies that you may consult is posted on the United Statestrustee program’s web site at www.usdoj.gov/ust. It is also available in the bankruptcy clerk’s office.

In addition, after filing a bankruptcy case, an individual debtor generally must complete a financial management instructional course before he or she can receive a discharge. A list of approved financial management instructional courses is also available on the United States trustee program’s web site (www.usdoj.gov/ust) and the bankruptcy clerk’s office.

THE FOUR CHAPTERS OF THE BANKRUPTCY CODE AVAILABLE TO INDIVIDUAL CONSUMER DEBTORS

1. Chapter 7: Liquidation Total fee: $299 ($245 filing fee + $39 administrative fee + $15 trustee surcharge)

a. Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Debtorswhose debts are primarily consumer debts are subject to a “means test” designed to determine whether the case should be permitted to proceed under chapter 7. If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the court dismiss your case under § 707
(b) of the Code. It is up to the court to decide whether the case should be dismissed.

b. Under chapter 7, you may claim certain of your property as exempt under governing law. A trustee may have the rightto take possession of and sell the remaining property that is not exempt and use the sale proceeds to pay yourcreditors.

c. The purpose of filing a chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, the court may deny your dischargeand, if it does, the purpose for which you filed the bankruptcy petition will be defeated.

d. Even if you receive a general discharge, some particular debts are not discharged under the law. Therefore, you maystill be responsible for most taxes and student loans; debts incurred to pay nondischargeable taxes; domestic supportand property settlement obligations; most fines, penalties, forfeitures, and criminal restitution obligations; certain debtswhich are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operatinga motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs. Also, if a creditor can prove that a debtarose from fraud, breach of fiduciary duty, or theft, or from a willful and malicious injury, the bankruptcy court maydetermine that the debt is not discharged.B201 (12/08) Page 2 of 2 USBC, EDCA

2. Chapter 13: Repayment of All or Part of the Debts of an Individual with Regular Income Total fee: $274 ($235filing fee + $39 administrative fee)a. Chapter 13 is designed for individuals with regular income who would like to pay all or part of their debts in instalmentsover a period of time. You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts set forthin the Bankruptcy Code.

b. Under chapter 13, you must file with the court a plan to repay your creditors all or part of the money that you owethem, using your future earnings. The period allowed by the court to repay your debts may be three years or five years,depending upon your income and other factors. The court must approve your plan before it can take effect.

c. After completing the payments under your plan, your debts are generally discharged except for domestic supportobligations; most student loans; certain taxes; most criminal fines and restitution obligations; certain debts which arenot properly listed in your bankruptcy papers; certain debts for acts that caused death or personal injury; and certainlong term secured obligations.

3. Chapter 11: Reorganization Total fee: $1,039 ($1,000 filing fee + $39 administrative fee) Chapter 11 is designed for the reorganization of a business but is also available to consumer debtors. Its provisions are quite complicated, and any decision by an individual to file a chapter 11 petition should be reviewed with an attorney.

4. Chapter 12: Family Farmer or Fisherman Total fee: $239 ($200 filing fee + $39 administrative fee)Chapter 12 is designed to permit family farmers and fishermen to repay their debts over a period of time from future earnings and is similar to chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm or commercial fishing operation.

BANKRUPTCY CRIMES AND AVAILABILITY OF BANKRUPTCY PAPERS TO LAW ENFORCEMENT OFFICIALS

A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury, eitherorally or in writing, in connection with a bankruptcy case is subject to a fine, imprisonment, or both. All information supplied by a debtor in connection with a bankruptcy case is subject to examination by the Attorney General acting through the Office of the United States Trustee, the Office of the United States Attorney, and other components and employees of the Department of Justice.

WARNING: Section 521(a)(1) of the Bankruptcy Code requires that you promptly file detailed information regarding your creditors, assets, liabilities, income, expenses and general financial condition. Your bankruptcycase may be dismissed if this information is not filed with the court within the time deadlines set by the Bankruptcy Code, the Bankruptcy Rules, and the local rules of the court.


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This website contains information related to law and is NOT LEGAL advice. It contents is for information only. If you need legal advice, please consult an attorney or act as your own.
All documents typed are prepared by Rica Gilmore.