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Rare Chapter 7 Bankruptcy Dismissals

Rare Reasons Why a Chapter 7 Bankruptcy Case Can Be Dismissed

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Rare Chapter 7 Bankruptcy Dismissals – When it comes to dismissals and bankruptcy, the general rule is that Chapter 7 cases are rarely dismissed but Chapter 13’s are very commonly dismissed. Bankruptcies can be dismissed for various reasons -some good and some bad. Let’s discuss the dismissal of Chapter 7 bankruptcies and what types of dismissals are encountered.

Chapter 7 Bankruptcy Dismissals By The Trustee

Chapter 7 cases are rarely dismissed in the bankruptcy system. The usual outcome of a Chapter 7 is the discharge order and closing of the bankruptcy case. This is the normal desirable outcome in which all of your debts are eliminated.

However, on rare occasions the dismissal of a Chapter 7 bankruptcy can be necessary. First, a case can be dismissed by the Chapter 7 Trustee or United States Trustee due to an ineligibility for Chapter 7 or some other bad faith circumstance. The Trustee and United States Trustee are responsible for maintaining the proper application of the bankruptcy code. In rare cases when the eligibility for Chapter 7 is questionable, a motion to dismiss can be filed.

The most common motion to dismiss in a Chapter 7 is due to an interpretation by the United States Trustees Office that the debtor is not eligible for Chapter 7 according to their means testing. To put it simply, the United States Trustee believes that the debtor is making too much money to be in Chapter 7. The debtor may have sufficient income to pay back some of their creditors in a Chapter 13 case. In such a situation, the debtor will be given the choice to either dismiss their Chapter 7 case or convert their current Chapter 7 case to Chapter 13.

Voluntary Motions to Dismiss Brought By The Debtor in Chapter 7 Bankruptcy

Sometimes there are good, acceptable reasons for a Chapter 7 debtor to dismiss their case. For instance, a Chapter 7 case can be voluntarily dismissed by the debtor in order to address new large unexpected debts such as medical bills from a heart attack or stroke. In such a situation, the new medical bill would have to have occurred almost immediately after the bankruptcy case was filed. The Bankruptcy Trustee would likely not have an objection to such a motion to dismiss as long as the debtor still turns over any non-exempt assets into the bankruptcy estate.

Keep in mind, however, that not all voluntary motions to dismiss in Chapter 7 will be granted. The Trustee has a duty to administer an estate with assets in order to protect the creditors. If a Chapter 7 debtor plans to file bankruptcy, he cannot rely 100% upon any ability to get out of the Chapter 7 process after it has started. The attitude of “let’s do this and see what happens” is not the proper attitude to have when you file for Chapter 7 Bankruptcy. Chapter 7 should be thought of more like a potentially irreversible process that can have consequence that include losing certain types of assets.

Conclusion: Chapter 7 Rarely Produces Dismissal of Your Case

Chapter 7’s are rarely denied and are very infrequently dismissed. If you need to get relief from your debts, Chapter 7 is a relatively simple process that can eliminate your debts in a short time. Although dismissals do occur in Chapter 7 bankruptcy, they are very rare and do not affect most cases.

– Indianapolis Chapter 7 Bankruptcy Attorney John Bymaster

Indianapolis Bankruptcy and Inheritance

Indianapolis Bankruptcy and Inheritance: What You Need to Know

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The rules of bankruptcy and inheritances can protect you from losing an inheritance to creditors.  In Indiana, there is no special bankruptcy exemption that allows you to keep your inheritance when you file for bankruptcy. Therefore, it is very important in Indiana to understand clearly which inheritances can be come part of your bankruptcy estate.

Inheritances and Chapter 7 Bankruptcy

There are special rules that apply to bankruptcy and inheritances in Indiana. When you file for bankruptcy under Chapter 7, any inheritance that you are already due to receive is part of the bankruptcy estate automatically. Therefore, if someone has already died and your bankruptcy case has been filed, you will be required to turn over the proceeds of your inheritance to the Bankruptcy Trustee to repay creditors. The special rule applies, however, where inheritances become due for up to six months after the bankruptcy case is filed. For this six month, 180 day period, the inheritance must still be turned over to the bankruptcy estate to help repay your debts.

Chapter 13 Bankruptcy and Inheritances

Chapter 13 bankruptcy can even create a larger period of time where any inheritances could be forced to be paid to the Bankruptcy Trustee to repay creditors. This is because during the entire life of the Chapter 13 repayment plan, you will be required to turn over any inheritance received at that time to help repay some of your creditors. Therefore, if you are expecting to receive an inheritance during your Chapter 13 bankruptcy case, it is very important to make plans accordingly. Perhaps a Chapter 7 case could be advisable if you are eligible to reduce this time period in which inheritances must be turned over to the Bankruptcy Trustee.

Conclusion:  Inheritances and Bankruptcy Require Guidance By An Attorney

If you are anticipating an inheritance sometime in the future, careful debt relief planning will be required to make sure that you can enjoy the maximum benefits possible. Bankruptcy can be a powerful tool in planning for debt relief even if you may receive an inheritance sometime in the future. If your plan includes bankruptcy, make sure to understand the ramifications of family member’s early passing.

~Indianapolis Bankruptcy Attorney John F. Bymaster on Inheritances and Bankruptcy

Bankruptcy Meeting of Creditors: You Have No Reason For Anxiety

Indianapolis Chapter 7 Bankruptcy Lawyer Describes the Bankruptcy Meeting of Creditors: You Have No Reason For Anxiety

Indianapolis bankruptcy definition in dictionary

Being a Chapter 7 Bankruptcy Lawyer in Indianapolis, I have experienced the bankruptcy meeting of creditors possibly thousands of times. The Bankruptcy Meeting of Creditors can cause anxiety for many people who have never experienced it before. This article will describe the Chapter 7 Bankruptcy Meeting to show you that there’s no cause for anxiety.

The Bankruptcy is Only a Procedural Requirement Under Section 341 of the Bankruptcy Code

Although you may have some anxiety about the Bankruptcy Meeting of Creditors, keep in mind that it is only a very routine procedural requirement of the Bankruptcy Code. Section 341 of the Bankruptcy Code requires the debtors in bankruptcy to be personally examined by the Bankruptcy Trustee through a series of simple questions. These questions are usually very routine and usually the Trustee does not anticipate for there to be any problems or assets in your case.

Your Creditors Will Most Likely Not Attend Your Bankruptcy Meeting

Although the Bankruptcy Meeting is many times referred to as the Meeting of Creditors, creditors very rarely attend these bankruptcy meetings. It is very unlikely that you will be examined by creditors in any way.

Keep in mind that the Bankruptcy Meeting is not a place for your creditors to object to the bankruptcy: it is only a place for your creditors to ask questions. Because there is usually no objection that creditors can bring to stop the discharge of their debt, creditors rarely find it necessary to attend the Bankruptcy Meeting.

Your Bankruptcy Meeting Will Go Smoothly Most Likely Because Your Attorney is Required to Present Documents to the Trustee Before the Meeting

When a Chapter 7 case goes as planned, documents will be sent to the Trustee ahead of time in order for review before the Trustee asks you any questions. Therefore, it is not very likely for there to be any surprises at the Bankruptcy Meeting. On occasion, additional documents or asset information may be needed after the Bankruptcy Meeting. However, such a request for additional documents is somewhat common and is no cause for alarm.

The Bankruptcy Meeting is Simple: You Sit Down and Answer Some Questions

Although it can be intimidating to come before a Bankruptcy Trustee, the reality is simply that you must sit down and answer some questions. Make sure to bring your driver’s license and Social Security card to the meeting and any other documents your attorney has requested. Also, be on time. After that, there is no reason for anxiety: just go to the Bankruptcy Meeting and answer the simple questions.

~Indianapolis Bankruptcy Attorney John F. Bymaster

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Who is This Bankruptcy Trustee?

Indianapolis Chapter 7 Bankruptcy Attorney Explains the Role of a Bankruptcy Trustee

Bankruptcy Trustee Gavel

Who is This Bankruptcy Trustee?

Many times I am asked, “Will I have to come up before a judge for my bankruptcy?” In response, I answer, “No, you will be required to be examined by the bankruptcy trustee assigned to your case.” The next question follows, “What is a bankruptcy trustee?” Being a bankruptcy attorney in Indianapolis, I can explain very clearly the role of a bankruptcy trustee.

A Bankruptcy Trustee is Assigned Automatically in Chapter 7 or Chapter 13

When you file your bankruptcy case, a bankruptcy trustee will be automatically assigned to administer your bankruptcy. These trustees are pre-selected groups of attorneys and accountants who are familiar with creditor and bankruptcy law. You will meet with this trustee to answer some questions during your bankruptcy meeting of creditors.

The Role of a Chapter 7 Trustee

To put it simply, the role of a Chapter 7 bankruptcy trustee is to examine the value of your property to see if there are any nonexempt assets that should be sold to repay a portion of your debts. If no such assets exist, the trustee will file a report to the court stating that no money will be available for your creditors. However, if the Chapter 7 Trustee determines that assets do exist that can be properly sold to pay back some of your creditors, the trustee will follow through to ensure that such proper repayments will be eventually made.

The Role of a Chapter 13 Trustee

The role of the Chapter 13 trustee is to review your petition and repayment plan to make sure that your Chapter 13 case will be successful. The Chapter 13 Trustee will also conduct a meeting of creditors, but this meeting is more geared towards working out the details of your repayment plan instead of looking for assets. After your Chapter 13 bankruptcy plan is confirmed, the Chapter 13 Trustee will administer your plan and monitor it until completion.

Is the Bankruptcy Trustee on My Side or the Creditor’s Side?

Although arguably it can be asserted that the bankruptcy trustee represents the creditors, in reality the bankruptcy trustee is more of a facilitator of the bankruptcy system. The real goal of a bankruptcy trustee is to ensure that the requirements for the proper administration of all their bankruptcy case are met. Although Chapter 7 Trustees are motivated to find assets in their cases, proper administration of their cases under the bankruptcy code is the predominant agenda and duty of the bankruptcy trustee.

How to Address the Bankruptcy Trustee

The Bankruptcy Trustee assigned to your case should be addressed with respect in a way similar to how you would address a judge. The proper title in which you should address the trustee is either as “Mister Trustee” or “Madame Trustee.” When you answer your questions during the bankruptcy meeting, show similar dignity and respect to how you would address a judge.

Conclusion: The Role of the Bankruptcy Trustee is of the Highest Importance to the Bankruptcy System

Without a bankruptcy trustee being assigned to your case, our system of bankruptcy would have no examiner or facilitator in order to meet the requirements of the bankruptcy code. The bankruptcy trustee plays the most critical role in the bankruptcy system: the individual review and approval of each bankruptcy case. If you file bankruptcy, be sure to respect and cooperate with the bankruptcy trustee assigned to your case: his or her role is absolutely vital for your successful completion of your bankruptcy.

~Indianapolis Bankruptcy Attorney John F. Bymaster

Free Bankruptcy Consultation

Making Your Bankruptcy Consultation “Count”

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Free Bankruptcy Consultation – If you make your bankruptcy consultation “count” for the most possible, drastic improvements to your financial life could quickly follow. It is important when you prepare for a bankruptcy consultation to keep a few things in mind.

Documentation of Your Finances Must Be Brought to the Consultation

It is important to bring proper documentation of your finances to the consultation for bankruptcy. Bring information such as your recent paycheck stubs, any lawsuits and aggressive collection letters, and your most recent tax return. You should also be ready to supply additional documentation after the bankruptcy consultation. Most bankruptcy attorneys will also require to take a copy of your driver’s license end Social Security card for verification purposes.

Disclose Everything to Your Attorney

It is extremely important for you to be completely honest. You must disclose everything to your bankruptcy attorney. Also, be prepared to fill out paperwork before the consultation that helps disclose all this information. By giving the attorney full and complete disclosure, he can see an accurate picture of your financial situation. This accurate picture will help him give appropriate advice for your situation.

Prepare to Act Decisively and Quickly After Your Bankruptcy Consultation

A bankruptcy consultation will only be beneficial if you decide to act quickly on the advice of the attorney. Many times people considering bankruptcy will seek council but will not act quickly on the advice given. Do not wait to file bankruptcy until you are absolutely forced into filing by a garnishment of your wages or other unbearable collection. Respond to the advice of your bankruptcy attorney quickly in order to get your fresh start as soon as possible.

Conclusion: A Bankruptcy Consultation Can Drastically Change Your Financial Life

If you are willing to act quickly and decisively on the advice of your bankruptcy attorney, then your life can change very quickly for the better. Prepare yourself before the bankruptcy consultation to put the effort in necessary to quickly respond to your deteriorating financial situation: make your bankruptcy “count.”

~Indianapolis Bankruptcy Attorney John F. Bymaster