Chapter 7 Bankruptcy

Important Reminders

PLAN PAYMENTS:
Your first payment is due in the Trustee's office no later than 30 days after we file your Bankruptcy with the Court. Whether your employer makes this payment out of your wages OR you pay the Trustee directly, you are responsible for making sure this payment is received by the Trustee on or before the due date. If you are in an employer wage deduction plan, please check your pay stub to be sure these monies are being deducted and sent to the Trustee according to the schedule outlined in your plan. If your employer has not withheld the payment, or if your employer has withheld only a portion of the payment, it is your responsibility to ensure that the trustee has received your entire payment by the due date.

If it's necessary for you to pay the Trustee directly, he will accept direct payment from you by cashier's check or money order only, NOT BY PERSONAL CHECK OR CASH. If a problem develops with the withholding of your plan payments by your employer, please let your attorney know. Keep all of your pay stubs, as proof of the amounts that were withheld from your check, as well as copies of any money orders or cashier’s checks that you send the trustee. Should you be off of work for a while, or change jobs, you will need to make the payment directly to the Trustee until your employer begins the withholding again.

341 MEETING/MEETING OF CREDITORS:
Shortly after filing, you will receive a notice from the Court giving you the date, time and location of your Meeting of Creditors. You (and your spouse, if you have filed jointly) must attend this meeting, or the Court will dismiss your case. Your creditors may also attend, but very few do so. You will be placed under oath and the Trustee will verify statements in your petition concerning your living expenses and your income, and other factors which may affect the payment plan you have proposed.

The meeting is usually scheduled for approximately 30 days from the date your petition is filed, and can only be rescheduled in the event of a dire emergency. You will receive a letter from our office with information regarding what you have to bring to this meeting including photo identification, and proof of your social security number.

Acceptable photo ID includes a valid driver’s license, a government-issued photo ID card, a U.S. Passport, a government employee photo ID card, a military photo ID card, a legal resident alien card, or a student ID card. Acceptable proof of your social security number would be a social security card, or an original W-2 for the most recent tax year. An insurance card, other than a Medicare card, is acceptable in MO but not in IL as proof of your social security number. The attorney at the 341 meeting will not have these items for you.

FINANCIAL MANAGEMENT COURSE:
This course must be completed in order for your debts to be discharged at the end of your case. Your TBC attorney will help you find a class that qualifies for this requirement, and will advise you of the cost (normally about $50)

CONTACTS BY CREDITORS:

It takes about a month (sometimes two months, for larger corporations) for the Court's notice of your Bankruptcy to get to each creditor, to be routed to the correct department, and to be entered into your file in the creditor's computer in order to stop any debt collection activities. If, after 30 days from filing your petition, you continue to receive bills from the creditors listed in your petition, please mail the bills to our office, and we will send the creditor a letter notifying them that they must stop trying to collect on this debt.

Once your Chapter 13 is filed, do not discuss your debt with them, but refer them to us. The Bankruptcy Code prohibits a creditor from taking actions to collect debts after the case is filed. If any creditor threatens you with any collections activity, or with repossession, please refer the creditor to TBC.

DEALING WITH CREDITORS:
You should not deal directly with a creditor regarding scheduled debts, just as they may not continue to contact you, unless your plan specifically directs otherwise. You cannot choose to pay a particular creditor "on the side", because all of your debts must be dealt with through the Court and the Court-appointed Trustee, unless your plan provides for this payment. If you bounced a check to a creditor, it is the creditor's right to refuse to reopen an account for you.

UTILITIES:
Although the past due amounts on your utilities may be included in your Chapter 13 plan payments; you do need to continue to pay your current monthly utility bills directly to those companies as they become due. The utility companies do have the right to require a deposit from you before they re-establish your service, but they must stop billing you for the past due amounts listed in your petition. In MO, an unpaid sewer bill can be discharged, but the liens on your property would remain until the debt is paid.

ADDITIONAL CREDITORS:
If, after filing your bankruptcy, you realize that you have forgotten to list one or more creditors, it is possible to have them added. The Court charges $26 per schedule each time you add one or more creditors. You may add as many creditors as necessary on any given Schedule at one time for that $26 fee per schedule, while the case is open.

However, the later you wait to add the new bills, the greater likelihood exists that the debts may not be eliminated. We recommend that you add bills within 30 days of filing to prevent these possible problems. Please note that the debts you wish to add must have been incurred BEFORE you filed your bankruptcy petition. If you order a credit report that arrives after filing, it will be your responsibility to go through the credit report and check it against the creditors listed in your bankruptcy to determine if there are any that need to be added to your bankruptcy.

REQUIRED INSURANCE:
Any vehicles for which you are paying through the plan must be covered by collision and comprehensive insurance. Please note that Missouri and Illinois law also requires liability insurance to be placed on your car. If your car is repossessed, it will be mandatory that you provide us with proof of full coverage insurance before we can negotiate with the creditor to get your car back for you.

CHANGE OF EMPLOYER OR YOUR ADDRESS OR PHONE NUMBER:
If you move during the course of your plan, change employers, or have a new telephone number, you must notify our office in writing. We will notify the Court and the Trustee. If you do not notify our office of your new contact information, your case could be dismissed and you could lose your assets.

CHANGE IN FINANCIAL SITUATION:
If for some reason there is a substantial negative change in your financial situation that will last for several months at least, please contact us immediately. We may need to change your plan, ask the Court for a deferment, or consider converting your case to a Chapter 7 if necessary.

CLAIMS OF CREDITORS:
About 5 months after your petition is filed with the Court, you will receive a listing of your creditors and the amount they want to receive through your Chapter 13 plan. Please review the list and let us know if there are any large inaccuracies. We will also be reviewing this list on your behalf. If you see NOT FILED next to the creditors name, this means the creditor has not filed a claim in your case, not that the creditor was not listed on your petition.

NOTICES FROM THE COURT:
Over the course of your plan, you may occasionally receive notices from the Court giving you information on a hearing of Objections to Claims (we are disputing how a creditor wants to be paid through your case), or Motions for Relief. Except for the Meeting of Creditors, you will probably not need to go to any further hearings. If you will need to be at a hearing, we will notify you in writing on our letterhead or by phone.

TRUSTEE'S PERIODIC REPORT:
Every six months in IL, annually in MO, the Trustee's office sends out a Periodic Report. This listing includes the amounts paid to each Creditor and the amounts still due to each of them. If there are errors on your report, please do not panic, but please do notify us.

FILING TAX RETURNS:
During the time your Chapter 13 is in effect, DO NOT FILE ELECTRONICALLY IN IL OR RAPID REFUND IN EITHER IL OR MO. When you file your taxes for the period your Chapter 13 is open, you need to enclose a note stating you have filed a Chapter 13 bankruptcy, and list your case number and your attorney’s name, address and phone number. In IL, your tax refund may be intercepted while you are in a Chapter 13 by any creditor who has the right to offset refunds. In MO, any state or federal tax refund you receive during your chapter 13 will be paid to the court. This money will be distributed to your creditors, as an addition to the amount they receive through your monthly plan payment.

TAX REFUNDS:
If you receive a tax refund at any time during the course of your Chapter 13 case, please contact your attorney before spending any of it, as a portion of the refund may been to be turned over to the Chapter 13 Trustee.

STUDENT LOANS:
Student Loans are non-dischargeable, and will still be due after your Chapter 13 has completed. The student loan company may be able to keep adding interest while you are in your Chapter 13.

REAL ESTATE TAXES:
If you owe back real estate taxes, and you told us about them, they should have been listed in your petition. YOU ARE RESPONSIBLE FOR PAYING ALL FUTURE TAXES AS THEY COME DUE. In Illinois, if you do not pay these taxes in full before the redemption date set by state law, you will lose your real estate.

HOME MORTGAGES:
Except in very rare cases, home mortgages will survive the bankruptcy when your Chapter 13 is completed. If, during your bankruptcy, you had been paying your mortgage directly to the mortgage company, continue to do so even after your bankruptcy completes. Keep a record, including receipts, of all mortgage payments you make while in the bankruptcy. If at any time your mortgage company claims that you have fallen behind with your mortgage payments, we will need proof that you have made these payments, to object to their claim. If you were paying the mortgage through the plan, begin or resume paying your mortgage directly yourself immediately after your chapter 13 is over.

SURRENDERING SECURED PROPERTY:
If you decided to allow a creditor to take back their collateral, you can contact them to make the arrangements for the return. You can either return it yourself to where it was purchased, or the creditor can come to your home to pick it up. If the creditor is to come to your home, and they have not been there in what you would consider a reasonable amount of time, the collateral does not become yours to sell: it still belongs to the creditor. Please notify us and we will follow up with the creditor.

CREDIT REPORTING:
A credit report can reflect a Chapter 7 or Chapter 13 bankruptcy for each account affected by the case for up to 10 years. However, it is most likely that a Chapter 7 will be listed on your credit report for 10 years from the date of filing, and a Chapter 13 will be listed for 7 years from the date of filing. If you have a co-signer on a debt, that person's credit report will reflect your filing for the co-signed account. This could adversely affect your co-signer's future credit. Please contact our office if you or one of your co-debtors has any problems with a credit report as a result of your bankruptcy.

Specifically you should make copies of and retain the following:

  1. The listing of creditors included in the case, a copy of which we will give to you at your 341 Meeting of Creditors;
  2. The Discharge Order entered by the Court upon completion of your case;
  3. The Order closing your case.

These, and other documents, could be valuable in proving to a future creditor when your case was filed, closed, and what creditors were affected by your case.

We recommend that each year while you are in bankruptcy, you pull your credit reports. All debts listed in your bankruptcy should be shown as being listed in a bankruptcy. Furthermore, a few months after receiving your discharge, we recommend you pull a credit report. All debts, other than your mortgage, that were listed in your bankruptcy should be shown as being paid and/or discharged through your Chapter 13. If this is not the case, please contact our office and schedule an appointment with one of our bankruptcy attorneys.

BUYING OR SELLING PROPERTY:
BEFORE ENTERING INTO ANY AGREEMENTS WHICH INVOLVE NEW OR REFINANCED DEBT, YOU MUST GET THE PERMISSION OF THE TRUSTEE IN IL, OR THE JUDGE IN MO. Before you incur any debts over $100, please call your attorney. These would include buying or selling a house or car, selling or transferring (giving away) any of your property, or entering into any new debt. The process begins by contacting us to discuss the options which may be available to you in your present situation. This process can take several weeks, so it is advisable to contact our office as soon as you begin to think about any of the above actions. Once we have determined the best course of action for your particular situation, we will file the necessary paperwork with the Court. This limitation does not apply to necessary medical expenses.

ALIMONY AND CHILD SUPPORT:
If, at the time you complete your Chapter 13, you are not current with any post-petition domestic support obligations that you owe, you will not receive a discharge of your debts.

EFFECT OF DISMISSAL:
If you do not make your Chapter 13 payments, and/or do not comply with any other orders issued by the Bankruptcy Court, your case will be dismissed. If your case is dismissed and you choose to file another bankruptcy, the Bankruptcy Code places limitations on the amount of protection you will receive from your creditors. In extreme cases, you could face felony charges of bankruptcy fraud for failure to disclose all assets and/or liabilities in your bankruptcy petition, or for other noncompliance with the Bankruptcy Court.

IF YOU HAVE ANY QUESTIONS, in regard to your case, please feel free to contact our office. If your attorney is not available when you call, just ask to speak to one of the paralegals. They will answer your questions, if they can; if not, they will have the attorney answer it for you.


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