There are certain debts that are discharged regardless of whether a Chapter 7 or a Chapter 13 is filed. Discharged means that you will no longer be responsible for repaying them once the bankruptcy is over. In a Chapter 7 you will not have to repay any portion of the debts unless there are unexempt assets that the trustee divides among your creditors. In a Chapter 13 the repayment plan will most likely provide for some portion of the debts to be paid back. If you complete the plan successfully, the remaining unpaid debt will be discharged.

Regardless of which chapter of bankruptcy you file, certain debts will be discharged with exempt of the portion paid back as mentioned above. These types of debts include credit cards, medical bills, some lawsuit judgments, obligations under leases and contracts, personal loans and promissory notes.

In a Chapter 7 there are many debts that are not dischargeable that may be dischargeable in a Chapter 13. If a debt is not dischargeable, that means you owe them after your bankruptcy is over. There are certain debts that the bankruptcy does not affect at all; meaning that you will continue to owe them just has if you had never filed bankruptcy.

• Domestic Support Obligations
  • Domestic support obligations are child support, alimony and other debts in the nature of alimony, maintenance, or support
  • In order for this debt to be nondischargeable, the domestic support obligation must have been established in a separation agreement or divorce decree, an order of a court or a determination by a child support enforcement agency.
• Other Debts Owed to a Spouse, Former Spouse, or Child
  • You cannot discharge any debt that you owe to a spouse, former spouse, or child that was incurred in the course of a divorce or separation agreement.
  • While the bankruptcy may get rid of your liability to the creditor, you are still liable to the ex-spouse if the creditor goes after him or her for the payment.
• Fines, Penalties, and Restitution
• Certain tax debts

Dischargeability of debts can be an complicated issue and should not be determined by this non-exhaustive list of some of the debts that are not discharged, If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for you.

What is a Chapter 7?

Chapter 7 is the most popular type of bankruptcy. In a Chapter 7 bankruptcy, you must fully disclose your property, debts and financial activities over the several years prior to the filing of the bankruptcy.  Typically three months after the case is filed, you receive a discharge of most of your debts with exception of certain nondischargeable debts.

What is a Chapter 13?

Chapter 13 is a reorganization for individuals. The individual can include sole proprietors and independent contracts but cannot include entities such as corporations or limited liability companies. Along with all of the documents required in a Chapter 7, you also propose a 3 or 5 year plan under which you typically must repay certain types of debts in full and usually some portion of your unsecured debt. Chapter 13 can be used to pay off missed mortgage payments over the life of the plan. Typically Chapter 13 is not the bankruptcy of choice because of the length of time before receiving a discharge and the extra legal fees involved. However, 10% to 15% of people who file under Chapter 7 are required to convert to a Chapter 13 bankruptcy because they have sufficient income to fund a Chapter 13 plan and at least partially pay back some of their creditors.    

What is a Chapter 11?

                A Chapter 11 Bankruptcy is typically for financially struggling businesses; used as a reorganization of their financial affairs. However, individuals may also qualify to file a Chapter 11. Individuals who consider Chapter 11 usually have debts in excess of the Chapter 13 bankruptcy debt limits or if the Debtor has substantial non exempt assets.  Chapter 11 fees can be cost prohibitive and are very complicated. You definitely need an attorney if you are going to file a Chapter 11. If you are considering filing a Chapter 11, contact an attorney that specializes in Chapter 11 bankruptcies.

What is a Chapter 12?

Chapter 12 is very similar to Chapter 13. However, you be eligible for Chapter 12, at least 80% of the debts must have arisen from the operation of a family farm. If you believe that Chapter 12 may be what you need, contact an attorney that specializes in Chapter 12 bankruptcies.

 If you are considering any type of bankruptcy, contact a bankruptcy attorney today. 

The quick answer is that it depends. It depends on the status of your accounts. Your credit cards likely fall into one of these three categories:

Cards on which you have a zero balance

• On the bankruptcy petition and schedules you must list all of your creditors, meaning people that you owe money to. However, if you have a zero balance then you do not owe them and they therefore do not have to be listed on the petition. This means you MAY come out of the Chapter 7 or Chapter 13 with the credit card. However, there are exceptions.
  • Trustee may take your credit cards
  • The credit card issuer may find out about the bankruptcy – many creditors constantly monitor their customers credit reports for signs on economic weakness
  • The credit card issuer may cancel your zero-balance card – If they learn of the bankruptcy, the company may termite your account based on credit risk. However, some companies are happy to continue doing business with you because now you will not be able to file another Chapter 7 for eight years.

Cards on which you have a balance but you are current on payments

• If you owe a creditor money even if you are not in default, the credit usually as a matter of course will close the account and any of accounts that you have with them. If you happen to bank with the same company, they can freeze or close your bank accounts as well.
• If you file a Chapter 7 and want to keep the card you can contact the credit card issuer. However, absent an agreement to repay, they are likely going to close the account. In addition, it is typically not recommended that you agree to pay debts for unsecured things such as a credit card. The purpose of the bankruptcy is a fresh start and therefore you should come out of it with no unsecured debt.

Cards on which you have a balance and are in default

• If you owe a creditor money and are in default, the credit usually as a matter of course will close the account and any of accounts that you have with them. If you happen to bank with the same company, they can freeze or close your bank accounts as well. This can have devastating results if for example your paycheck was just deposited into the account, etc. so contact an attorney prior to filing bankruptcy.

There are certain debts that are discharged regardless of whether a Chapter 7 or a Chapter 13 is filed. Discharged means that you will no longer be responsible for repaying them once the bankruptcy is over. In a Chapter 7 you will not have to repay any portion of the debts unless there are unexempt assets that the trustee divides among your creditors. In a Chapter 13 the repayment plan will most likely provide for some portion of the debts to be paid back. If you complete the plan successfully, the remaining unpaid debt will be discharged.

Regardless of which chapter of bankruptcy you file, certain debts will be discharged with exempt of the portion paid back as mentioned above. These types of debts include credit cards, medical bills, some lawsuit judgments, obligations under leases and contracts, personal loans and promissory notes.

Debts that survive a Chapter 13 bankruptcy no matter what include:

• Domestic Support Obligations
• Criminal Penalties
• Certain Taxes
• Intoxicated Driving Debts
• Debts Arising from Willful or Malicious Actions
• Debts or Creditors You Do Not List

Debts that are discharged in a Chapter 13, not Chapter 7 include:

• Marital debts created in a divorce settlement (unless they are determined to be support)
• Debts incurred to pay nondischargeable tax debts
• Court fees
• Condo fees incurred after the bankruptcy filing date
• Debts for loans from a retirement plan
• Debts that could not be discharged in a previous bankruptcy due to failure to received discharge

You can convert from one chapter of bankruptcy to another. When you convert, you are then subject to the dischargeability rules of the chapter to which you converted, not the chapter you started out in. There are many reasons you might convert from one chapter to another. Reasons include: inability to complete a Chapter 13 plan, abuse found by the court of a chapter 7 requiring conversion to a Chapter 13. You may also convert because it is determined that some of your debts are only discharged in a Chapter 13 and not a Chapter 7.

Dischargeability of debts can be an complicated issue and should not be determined by this non-exhaustive list of some of the debts that are not discharged. If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for your situation.

I am Filing Bankruptcy: Will I Lose My Job?

No employer may fire you because you filed bankruptcy. In addition, an employer cannot discriminate against you in other terms and conditions of employment; reducing salary, demoting you, or taking away responsibilities because of a bankruptcy. However, if there are other valid reasons for taking these actions, then the bankruptcy will not protect you. Simply put, if an employer wants to take action against you, they can as long as there are other valid reasons such as incompetence, tardiness, or dishonesty.

How does my Employer Find out About the Bankruptcy?

Typically if you are filing a Chapter 7, your employer rarely finds out. However, if you have been sued and are having your wages garnished, your employer is notified. The bankruptcy stops that garnishment, so again your employer is notified in order to stop the garnishment. If you file a Chapter 13, your employer typically will receive notice. In a Chapter 13 plan it is likely that the Judge will order that your Chapter 13 plan payments be deducted from your paychecks and sent directly to the trustee. In order to accomplish this, your employer or at least the payroll department is notified of how much money to withhold and where to send the funds.

Do I have to do a wage order for my Chapter 13?

The simple answer is that is depends. You may not like the idea of the wage order, however the order will make the plan easier to complete. The success rates of Chapter 13 cases is higher where the Debtor has a wage order for their Chapter 13 plan payments over Debtors who pay the trustee themselves. The very obvious explanation is that it is hard to spend money that you never see meaning that if you employer is deducting the payment from your check and mailing it directly to the trustee then you are not tempted to use a portion of the money for other purposes.

Can Bankruptcy Effect Child Custody?

There is no reported evidence of a parent losing custody because of a bankruptcy. Bankruptcy and divorce are so often related these days that one often times follows the other. Family law and bankruptcy are being to overlap in many ways requiring bankruptcy attorneys and Judges to know more about family law and vice versa.  However, keep in mind that bankruptcy does NOT relieve you of child support or alimony obligations.

Why do I have to complete a pre-filing class?

Before your bankruptcy can be filed, you must complete a credit counseling session. The cost ranges from $10.95-$50.00. The agency provides a certificate of completion that must be filed with the bankruptcy petition, schedules, and statements. The course is available online, over the phone, and through the mail. The agency must be approved by the U.S. Trustee.

The alleged purpose of the credit counseling is to give you an idea as to whether you need to file bankruptcy or whether a payment plan with your creditors would suffice to get you back on your feet. However, the counseling is required even if it is obvious that a repayment plan will not work for your situation. This is usually the case when your debt is high and your income is low or you are facing balances on debts with inflated interest rates and penalties.

The requirement is that you complete the counseling but does not require that you follow the counseling’s recommendation. Even if a repayment plan is feasible, you are not required to agree to it.

Why do I have to complete a pre-discharge class?

You are required to take an approved personal finance course before the court will discharge your debts in a Chapter 7 or Chapter 13. The agencies providing this service must be approved by U.S. Trustee. In a Chapter 7 the course is to be completed within 45 days after the date on which the creditors meeting was scheduled.  If you miss the deadline the court may close the case without a discharge of your debts. That means you will have to pay to reopen the case so that the course certificate can be filed in order to receive a discharge.

If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for your situation.

What is the cost of each course?

The cost varies depending on which company you chose to go with. The typically range from $10.95-$50.00 depending on which company and which method to take the class. Online classes are cheaper than the phone course. Some companies may also have financial aid meaning that depending on income, they may waive the fee for taking the course.

Some taxes are dischargeable through bankruptcy, but some are not eligible for discharge due to the year the taxes are due and the timeliness of filing the taxes.  If income taxes are more than three years old, they usually can be discharged.  The three year time period is based on the due date of the taxes, which generally is April 15th unless the debtor has been granted an extension.  If the taxes would be due within three years of the filing of the bankruptcy, the taxes would not be eligible for discharge.  It is not based on the end of the tax year but the due date for filing the tax return.  Therefore, if it is November, 2012, tax years 2008 and earlier would be discharged, but 2009, 2010, and 2011 would not because their due dates would be April 15th, 2010, 2011, and 2012, which is within the three year time period before the filing of the bankruptcy.

Even if the taxes are more than three years old, taxes are not dischargeable if they have been filed within the last 2 years.  If the taxes are not filed timely and less than two years before the filing of the bankruptcy, the taxes cannot be discharged through the bankruptcy.  If taxes are unable to be discharged through the bankruptcy, debtors can call the IRS or their state Department of Revenue and attempt to work out a payment plan to repay their non-dischargeable tax debt.  Sometimes debtors are able to pay the taxes over a longer period of time.  It is still important for debtors to list their tax debt in the petition regardless of the ability to discharge the debt, however, so the IRS and Department of Revenue will get notice of the bankruptcy filing.

For more information, please contact a St. Louis or St. Charles bankruptcy attorney today.

Many debtors/clients inquire whether they can be arrested if they are unable to make payments on their debts.  Creditors sometimes threaten to come to their home and arrest them if they are unable to make their payments, even if they inform the creditor of their intent to file a bankruptcy.  Often, this threat is used to encourage payment and to frighten the debtor.  This information, however, is often incorrect and misstated.  Before a debtor can be arrested for a civil matter, such as a lawsuit for not paying a debt, there is a procedure that must be followed.  The arrest does not occur immediately.  The creditor must file a lawsuit against the debtor in the appropriate court and serve the debtor so the debtor is aware of the court proceeding and has an opportunity to appear.  The debtor can either choose to appear in court or not.  If the debtor doesn't appear, the court will issue a default judgment in favor of the creditor.  The debtor can also enter into a consent judgment and agree to a payment plan or take the case to trial and let the judgment enter a judgment.  If a judgment is entered against the debtor and the debtor refuses to pay or is unable to pay, the creditor has the ability to freeze or levy the debtor's bank account or garnish their employment up to 25 percent or 10 percent for head of household.  If the creditor is unable to garnish, the creditor can pursue a warrant for the debtor's arrest.  This is a last resort and cannot be done without first having a judgment.

Therefore, the creditor cannot arrest a debtor at their home if they have not pursued a warrant through the proper court procedure. If a bankruptcy is filed, the creditor would be required to cease all contact with the debtor and would be unable to continue with pursuit of a lawsuit, judgment, or warrant against the debtor.

For more information, please contact a St. Louis or St. Charles bankruptcy attorney.

1. Change in Income.  Over the course of your bankruptcy you may find that you change jobs, become employed when you previously were not, or get a promotion or pay raise.  Any change in income should be reported to your attorney, regardless of whether it is a pay increase or decrease.  You attorney may advise that you need to amend certain schedules and/or amend your Chapter 13 repayment plan. 

2. A need to replace a vehicle arises.  Your vehicle may break down, or perhaps it is just time to replace your current vehicle.  If possible you should speak with your attorney before a new vehicle is an absolute necessity.  The steps your attorney will need to take depend on the situation.  If you are purchasing a new vehicle outright, free and clear of loans, you may need to explain where the funds for the vehicle came from.  If you want to purchase a vehicle with a loan your attorney will need to file a motion to incur debt.  You will have to show that you can afford your plan payment and the vehicle.  A motion has to be filed with the court and you must allow at least 21 days for objections.  If there are not any objections your attorney will file an order with the court allowing the purchase of a vehicle.  If your previous vehcile was being paid through your chapter 13 repayment plan you and your attorney may need to amend your plan to reflect the changes.

3. If you become entitled to receive a lump sum of money or property.  You could become entitled to receive money for a variety of reasons, including an inheritance, proceeds from a lawsuit or settlement, cashing out a 401k.  This list is not all inclusive.  If you receive a sum of money for ANY reason you should contact your attorney.  Generally, if you receive a sum of money while in a Chapter 13 that will have to be turned over to the trustee to be distributed to your creditors.  Generally, this will be added to your plan base and may mean that you are paying off more of your creditors.

This is not an all inclusive list.  If something changes while you are in a bankruptcy you should contact your attorney.  If you have questions, or would like to schedule a consultation, please contact a St. Louis Bankruptcy Attorney Today.

In the event that a debtor does not disclose all information on the bankruptcy petition a number of things can happen. Failing to disclose information is considered fraud.  Bankruptcy proceedings are federal matters, and are subject to investigation by the United States Trustee and the Federal Bureau of Investigation.  Fraud, or attempted fraud, is punishable by fines and/or incarceration in a federal prison.

If a debtor fails to disclose creditors that creditor may not be discharged as they did not receive notice and did not have an opportunity to be heard at the creditors  meeting.  If a debtor realizes that a creditor was omitted the debtor should amend his/her schedules to reflect that information as soon as possible.

If a debtor fails to disclose assets a number of things can happen.  Depending on the asset the schedules can be amended.  If a debtor fails to disclose an asset the trustee can object to exemptions being applied.  If the asset is large, or worth any sum of money, the trustee can hold the case open or require the debtor to convert their case.  At this time the debtor may be able to pay the trustee for the property, but if that is not an option, may be required to turn over the property.  Once a Chapter 7 case is determined to have assets the debtor may not be able to voluntarily dismiss the bankruptcy proceeding. 

If you have questions about this, or would like to schedule a consultation, contact a St. Louis Bankruptcy Attorney Today.

1. Debt Consolidation Options.  There are a number of companies that will offer to consolidate your credit cards and help to improve your credit.  Be very cautious here and ask them to explain the entire process to you.  Many of the places will tell you to stop making your payments to creditors and direct your payment amounts to the company instead.  They will then hold onto this money until it reaches a certain amount and then will negotiate your debt down, sometimes only paying cents on the dollar of what you owe.  This can have a number of negative implications.  First, your credit will continue to worsen as your bills go unpaid for months.  Second, the fees that some of these companies charge are exhorbitant. Third, the difference between what you owe and what they will pay your creditors will be considered taxable income to you.  Finally, this is a service that you do not need to pay for.  You could hold on to your own money and negotiate the debt down yourself.

2. Charge Off of Accounts.  Many times debtors are relieved when companies charge off an account or mark it as uncollectable.  An important thing to note is that this does not mean that the creditor does not have a legal right to collect.  Often times the original creditor will sell the account to another party and that third party may start to harass you about the debt.  Also, as mentioned above, any amount charged off is considered "discharge of indebtedness" and is taxable income.  For example, if you owe 10,000 to your credit card and they settle for 2,000 the 8,000 written off should be reported on your tax returns the following year.  You will be taxed on this money as you are taxed on your income, which may mean that you owe taxes you didn't expect to owe. 

3. Ignoring the problem.  Creditors will not usually disappear and may even start contacting you at work or contacting your friends and family members. Ignoring the problem will not make it any better.

If you have questions, or would like to schedule a free consultation, contact a St. Louis Bankruptcy Attorney Today.

Myths and Truths About Chapter 7 Bankruptcy, Part IV

Myth:  A debtor can dismiss a Chapter 7 bankruptcy if the Trustee finds assets.

Truth:  In a Chapter 7 bankruptcy, it is not possible to voluntarily dismiss your case if the Trustee finds assets.  Generally, a debtor can voluntarily dismiss their case before discharge if they change their mind about filing the bankruptcy; however, this is not the case if the Trustee has found assets.  When a bankruptcy is filed, the debtor has an obligation to list any property they have at the time of the filing and the value of said property, as well as any pending insurance claims, inheritance, and personal injury claims, etc.  If the Trustee determines that the personal or real property has a higher value than the debtor originally assessed or if the Trustee finds assets that were not listed in the bankruptcy petition, the Trustee can seize the assets if they are not exempt.  In order to prevent this from happening, many debtors request to voluntarily dismiss their case without discharge so they may retain their assets.  This is not a possibility.  If a Trustee finds unexempt assets in a Chapter 7 case, debtors are unable to dismiss their case voluntarily.  That is why it is so important for debtors to accurately disclose their property and assets (present and future) to their attorney and on their bankruptcy petition before filing. 

Myth:  If a debtor does not list something on the bankruptcy petition, the Trustee will not find out.

Truth:  It is essential for debtors to disclose all income, assets, and property, as well as the accurate value, on their bankruptcy petition and to disclose this information to their attorney.  It is also important for debtors to list any transfers, money paid to family members or friends, payments to creditors, etc.  The trustee completes their own investigation into the debtor's petition.  They can check what property the debtor has and the value of the property.  They can also find out about transfers of property and the recipients of transferred property.  Trustees can require an appraisal of real or personal property if they believe the value listed is too low.  They sometimes even wish to view the property personally.  They can also look at bank accounts to determine if money was taken out or given to someone else or if income was earned but not reported.  The Trustee will ask debtors questions under penalty of perjury.  For this reason, it is essential to disclose fair, honest, and accurate information on the bankruptcy petition and schedules. 

If you have any questions, please contact a St. Louis or St. Charles bankruptcy attorney.

Myths and Truths About Chapter 13 Bankruptcy, Part IV

Myth:  If a house is jointly owned and in foreclosure, both parties on the loan must file Chapter 13 bankruptcy in order to save the house from foreclosure.

Truth:  Both parties on the loan do not need to file bankruptcy in order to save the house from foreclosure. It is very common for a house to be owned jointly, especially by a married couple.  Many people think that because both names are on the loan, both people on the loan need to file bankruptcy in order to save the house from foreclosure.  Actually, as long as one party on the loan files, that is enough to protect the house from foreclosure and implement the automatic stay as long as the bankruptcy is filed before the foreclosure.  It may be beneficial for both parties to file together if they have other debt to include in the bankruptcy.  In some cases, however, the house may be the only debt the parties possess or the additional debt may only be in the filing debtor's name.  In that case, some people prefer to have only the one party on the loan file in order to preserve the credit of the other person.  If the house is later surrendered through the bankruptcy or foreclosed, the second person on the loan may want to consider filing bankruptcy because they would then be responsible for the deficiency on the property.  Otherwise, only one party would need to file bankruptcy.

Myth:  If the creditor isn't being paid through the bankruptcy, it is because the Trustee is choosing not to pay them.

Truth:  If a creditor is not being paid through the Chapter 13 bankruptcy, it likely due to reasons outside the Trustee's control.  When a bankruptcy is filed, the creditors receive notice of the bankruptcy and are given a deadline in order to file a proof of claim.  The proof of claim informs the Trustee of the amount due to the creditor so they know how much should be in the plan to pay them.  Upon review of the proofs of claim, the Trustee makes sure the plan is feasible and pays the creditor a certain amount per month through the life of the plan.  If the creditor does not file a proof of claim, the Trustee cannot pay them.  Therefore, if the creditor is not being paid, there is a good chance there is no proof of claim filed.  In that case, the debtor's attorney can call the creditor to remind them or file a proof of claim on the creditor's behalf to guarantee payment by the Trustee. 

If you would like more information, please contact a St. Louis or St. Charles bankruptcy attorney.

If you are considering filing for bankruptcy and may be moving out of a state there are a number of factors to consider.  First, you must be a resident of a particular state on the day of filing to file in that state.  So, if you retain an attorney in Missouri and then move to Kansas before your case is filed you will have to find other representation.  Not only do you have to live in the state on the day of filing, but you must have lived in the state for the greater part of the 180 days leading up to bankruptcy.  Basically, you must live in the state for 91 days or more prior to filing.  If it is imperative that you file right away you may want to consider filing in your current home state prior to moving out of state. 

If you are considering filing for bankruptcy in a state that you have not lived in for at least two and a half years you will want to notify your attorney of this as soon as possible.  This does not mean that you cannot file, it simply means that the exemptions you will use might be different that the state you live in.  This is not a problem, and does not mean that you cannot file, it just means that your attorney may have to do a bit of research to determine what exemptions apply.  Depending on the circumstances you may use the exemptions from a state of prior residence or federal exemptions.  If you have not lived in the state for at least two and a half years your exemptions will be based on the preference of the state that you lived in for the greater part of the six months prior to the two years prior to filing for bankruptcy.

If you have questions, or would like to set up a consultation, contact a St. Louis Bankruptcy Attorney Today.

1. Domestic support obligations.  These may include any child support, alimony, or any other payment ordered by the court that related for family care and support.  This can category would also include divorce and separation agreement settlements.

2. Student loans are not generally dischargeable.  However, in very extreme cases they may be dischargeable if there is an extreme hardship.  Generally this will be limited to cases where the debtor is unable to work or pay the student loans for some reason out of the debtor's control.  This must generally be a permanent issue, not a short term issue.  For example, if the disability is short term and you will be able to return to work in a few months your loans will not be discharged.

3. Debts owed to government agencies.  This can include traffic tickets, fees associated with criminal charges, criminal restitution, and taxes.  In some circumstances, where taxes were timely filed (or filed at least two years prior to filing the bankruptcy) and they are more than three tax years old, the debt may be dischargeable. 

4. Debts related to personal injury or death caused while the debtor was under the influence of drugs or alcohol.  However, fees, fines, and settlements from car accidents not caused while driving under the influence are generally dischargeable.

5. Any debt related to fraud or misrepresentation, including embezzlement, larceny, or failure to perform certain fiduciary duties. Keep in mind that it can be considered fraud to not list a creditor on your bankruptcy petition and schedules.  If the creditor does not get notice the debt may not be discharged. 

6. Debts incurred very close to filing for bankruptcy, particularly for luxury goods or services.  When anticipating filing for bankruptcy debtors should not make extravagant purchases to avoid any potential issues. If you are unsure about this you should speak with your attorney and explain your intentions and current situation.

If you have questions, or would like to schedule a consultation, speak with a St. Louis Bankruptcy Attorney Today!

Steps to Take When Surrendering a Property Through Bankruptcy:

1. Purchase hazard insurance to cover any problems that arise while the house is vacant. A regular home owner's policy does not cover damage that occurs when the house is vacant.

2. Winterize the home (if applicable): draining water from the pipes and/or leaving the heat on so the pipes do not freeze or burst.

3. Maintain yard (if applicable): cut grass and trim as necessary to avoid citations from the city/county.

Failure to do so can result in penalties and fines: Failing to have insurance or winterize the house will not affect the bankruptcy, HOWEVER:

• If the house is vandalized and/or the pipes burst the city/county will come after the owner of the house to fix the problems.
• The bankruptcy only takes care of the loan on the house, not the deed. It is the debtor's property until a sale occurs to transfer ownership.
• Fines or repair bills that arise after the filing of the bankruptcy are not part of the debts that are discharged.

Example: Debtor files bankruptcy and surrenders the real estate and moves out.  The house is vandalized and the mortgage company delays foreclosure. The debtor did not keep insurance on the house. The debtor now is not liable on the loan, but also cannot sell the house in the present condition, especially since the lien is against the property. The debtor is being told to board up the windows, pay fines, etc. Problem: Debtor cannot force the mortgage company to foreclose if it does not want to. The debtor is then stuck with the property including cutting the grass in the summer and winterizing it in the winter.

The short answer is yes.  However, there are several things to keep in mind:

If you are being garnished, you are likely filing bankruptcy to stop that garnishment. Filing bankruptcy will stop the garnishment. Creditors are not allowed to collect from you while you are in the bankruptcy. However, given that payroll is likely done several days before you are actually paid, the garnishment may continue 1-2 paychecks after the bankruptcy is filed.  It is not as simple as filing and the garnishment stopping. Here is what has to happen:

1. You file bankruptcy (making sure you list the creditor that is garnishing as well as the attorney for that creditor so that they can receive notice).
2. After filing, have your attorney contact the creditor’s attorney and give them notice of the bankruptcy and request a release of garnishment. The creditor’s attorney then has to process this request and then send notice of the release of garnishment to both your attorney and to your employment to stop the garnishment.
3. Once your payroll department receives the garnishment they release the garnishment and stop deducting from your paychecks.

This can happen in 1 day or in 1-2 weeks depending on how quickly the creditor and the payroll department move. However, if you are garnished AFTER the filing of the bankruptcy any money taken will be returned to you but again the time that this takes can range from a few days to a few weeks based on the creditors attorney and your payroll department depending on who has the money when the notice if received.

To avoid all of the above, file the bankruptcy because you even receive a garnishment, a judgment or a summons. If you are in debt and cannot afford to pay your way out of debt, consult a bankruptcy attorney.