1. 10 YEARS BEFORE FILING BANKRUPTCY – NON-EXEMPT PROPERTY CONVERTED TO EXEMPT PROPERTY If you owned property within the last 10 years and it was “non-exempt” property, i.e. property not protected from creditors or from the Bankruptcy Court, AND you contributed the property to your otherwise exempt homestead or to a burial plot with the intent to hinder, delay or defraud a creditor, the value of that contribution may not be exempt. If you placed the non-exempt property in trust for the same purpose, the transfer could be avoided.
Lesson – If…any time during the last ten years you moved assets in relation to creditor problems, talk to an experienced bankruptcy attorney before you file for bankruptcy.
2. 8 YEARS BEFORE FILING BANKRUPTCY – PRIOR CHAPTER 7 BANKRUPTCY FILING PREVENTS CURRENT CHAPTER 7 BANKRUPTCY FILING
You aren't allowed to receive a discharge in a Chapter 7 Bankruptcy if you received a discharge in a Chapter 7 Bankruptcy Case filed within the last 8 years. You can obtain a bankruptcy discharge if the prior bankruptcy was within the last 6 years and as a result of a chapter 13 case in which you paid 100% of unsecured claims or 70% of allowed unsecured claims and you proposed the case in good faith and used your best effort to complete it.
Lesson – If you filed a previous bankruptcy make sure that you have calculated the filing date right and prohibition date for the new case.
3. 4 YEARS BEFORE FILING BANKRUPTCY – PRIOR CHAPTER 7 BANKRUPTCY FILING PREVENTS CURRENT CHAPTER 13 BANKRUPTCY FILING
No discharge is allowed in a chapter 13 case if you received a discharge in a chapter 7 case that was filed within the last 4 years.
Lesson – Same as lesson in number 2 above
4. 3 YEARS 4 MONTHS BEFORE FILING BANKRUPTCY – HOME EQUITY EXEMPTION LIMITED POSSIBLY
You cannot exempt equity in your home more than $125,000.00 if acquired 3 years, 4 months prior to filing. (Time Limit doesn't apply if moved equity from prior residence located in same state and in Arizona see the McNabb case).
Lesson – This is a tricky rule and one you should speak to counsel about if your home has more than $125,000.00 in equity.
5. 2.5 YEARS BEFORE FILING BANKRUPTCY – PAY MARKET VALUE FOR CAR
A highly relied upon rule exists that says that if you purchased a vehicle more than 2.5 years before your chapter 13 filing, you may be able to pay the lender just the value of the car and not what is owed on it if it is upside down. Car must be for personal use.
Lesson – Car older than 2.5 years and underwater? One reason to consider a chapter 13 bankruptcy instead of a chapter 7 bankruptcy
6. 2 TO 2.5 YEARS BEFORE FILING BANKRUPTCY – WHICH STATE'S EXEMPTION LAWS YOU GET TO USE
When you file for bankruptcy you are entitled to protect certain assets. Bankruptcy Lawyers call those protected assets “exempt” or the laws that protect the assets “exemptions”. Which set of laws or exemptions you get to use to protect your assets in a bankruptcy case are determined by the State of your residence for the last 2 years before you file the case.
BUT if you didn't live in a single state of 2 straight years, then the exemption laws you use are determined by where you were domiciled the 6 months preceding the 2 years before filing.
BUT if that state doesn't permit a non-resident to use it's exemption laws, then you may choose the Federal Exemption Law to protect your assets.
Lesson – Talk to an Experienced Bankruptcy Lawyer if you have been moving around a bit and have assets you are concerned about.
7. 2 YEARS BEFORE FILING BANKRUPTCY – CHAPTER 13 TO CHAPTER 13
You can't receive a discharge in a chapter 13 case if you filed a chapter 13 within the last two years and received a discharge. Rare.
8. 2 YEARS BEFORE FILING BANKRUPTCY – TRANSFERRING ASSETS – POTENTIALLY BIG PROBLEMS
You can be denied the bankruptcy discharge if you tried to hinder, delay or defraud a creditor by transferring, destroying or hiding an asset within one year prior to the bankruptcy filing. The Trustee can retrieve the property if the same was done within 2 years if the transfer was completed for less than market value.
Lesson – Don't give stuff away, sell stuff for less than it is really worth, or hide things just to avoid creditors. You should be especially careful if you have done these things within the last two years and are considering a chapter 7 or chapter 13 bankruptcy. Also take into account your State's Fraudulent Transfer Statute. In Arizona the look back period is 4 years.
9. 1 YEAR BEFORE FILING – PAYMENTS TO RELATIVES OR “INSIDERS” FOR DEBTS OWED CAN CAUSE A PROBLEM
If you pay someone back money you owe them and you know them pretty well, the Bankruptcy Trustee may be able to ask for the money back if the payment was made within a year of the bankruptcy filing. There is a small amount you are entitled to pay back. In a chapter 13 case you may be able to pay the amount transferred to your other creditors in the plan and protect your Auntie Velma from having to pay the money to the Bankruptcy Trustee.
Lesson – If you have paid money back to a creditor who is also related to you, or close to you in some way, talk to an attorney about what could happen to that person…but only if you want to be comfortable at your next Thanksgiving Dinner.
10. 180 DAYS BEFORE FILING – NO FILING NEW BANKRUPTCY CASE
If you filed for bankruptcy previously and the case was dismissed because you ignored the judge, didn't show up for a hearing, or filed a request for dismissal after an automatic stay was granted to a creditor (difficult in a chapter 7)…you may not be able to file another bankruptcy for 180 days.
Lesson – Recent filing? It may be best to wait the creditors out before filing again.
11. 91 DAYS BEFORE FILING – MINIMUM RESIDENCY REQUIREMENT
You have to be a resident in the state in which you are filing for at least 90 days. It isn't true that you can move to a new state and file a bankruptcy the next day, unless that new state has been their principal place of business or the location of their principal assets for the majority of the last 180 days.
Lesson – Get your calendar out right after you drop off the U-Haul.
12. 90 DAYS BEFORE FILING – PAYMENTS TO CREDITORS
The amount you can pay to creditors within the 90 days prior to filing the case is limited. It can be considered a “preference” and recovered by the bankruptcy trustee unless it was a payment made in the ordinary course of business or “financial affairs of the debtor”.
Lesson – If you owe your favorite dentist a heap of money, and just prior to filing the bankruptcy you want to sell your non-exempt Star Wars memorabilia collection and pay him or her off, think twice. The Bankruptcy Trustee may sue the Dentist to recover the funds and your Dentist won't like you anymore anyway.
13. 90 DAYS BEFORE FILING – 90 DAY CREDITOR ADDRESS RULE
If the creditor has contacted you within 90 days of the filing date, you really need to make sure that you have included any address(s) that were contained on the correspondence in the master mailing list.
14. 70-90 DAYS BEFORE FILING – CERTAIN DEBTS WON'T GO AWAY
If you borrow money or take a cash advance that are not necessary for the support of the family and do it within 70 or 90 days of your bankruptcy filing date, those amounts are presumed to be non-dischargeable if they are above 750 (cash advance) and 500 (luxury good and services).
Lesson: Just don't borrow money for a long time before you file for bankruptcy.
15. 1 DAY BEFORE FILING OR 180 DAYS
You have to take a class before filing. You have to take the class within 180 days of the filing date and ideally at least the day before.
Lesson: People forget to take the class, take it and forget that it was a long time ago and then file or take it after filing. Map this out.
16. BANKRUPTCY FILING DATE – THE PETITION AND OTHER STUFF
A Bankruptcy is kicked off when you file a bankruptcy petition with the Bankruptcy Court. This creates an automatic stay that prevents most creditors from continuing collection activity unless you filed a prior bankruptcy in the last 12 months then the stay is only good for 30 days unless the Judge decides otherwise. If two cases were filed in the last 12 months no stay exists at all.
Don't forget to file the Verified statement of your social security number and the credit counseling certificate for the class you took within 180 days of filing.
You must understand exemption law when you file and what is or is not property of the bankruptcy estate. You must have also correctly completed the means test.
The process of filing the case comes with it's own set of rules and requires the preparation of 60-100 pages of detailed disclosures and information.
Lesson: Sometimes it's better to have some help
17. AFTER FILING – DOMESTIC SUPPORT OWED
If you owe child support or spousal maintenance on the date you file the bankruptcy, then the Bankruptcy Trustee is required to provide the person owed money that assistance is available and when the case is “discharged” the Trustee is required to give up your last known address and where you work.
Lesson: Make sure you disclose whom you may owe and amounts in your schedules.
18. 5 DAYS AFTER YOU FILE THE BANKRUPTCY PETITION – MASTER MAILING LIST, SOCIAL SECURITY NUMBER STATEMENT AND CREDIT COUNSELING CERTIFICATE
Three things you must do within 5 days of filing.
- The Master Mailing Matrix has to be filed
- The Statement of Social Security Number has to be filed
- The Credit Counseling Certificate must be filed.
Failure to do the first or third results in automatic dismissal of case, failure to do the second is potential dismissal.
Lesson: It is always the small things that can ruin your day.
19. 10 DAYS AFTER FILING THE BANKRUPTCY PETITION – PRESUMPTION OF ABUSE
The Clerk of the Bankruptcy Court must give notice to all creditors if there is a presumption of abuse to within 10 days of filing.
Lesson: It is important to understand the bankruptcy means test and it's relation to the success of your case.
20. 15 DAYS AFTER FILING THE BANKRUPTCY PETITION – REMAINING DOCUMENTS FILED
If you haven't filed the schedules, paystubs, means test, receipt of 342(b) notice, and the chapter 13 plan if not filing a chapter 7 bankruptcy, when you filed the petition they are due within 15 days.
Lesson: It is usually best to have the schedules and plan completed and filed with the petition and schedules. Not only to avoid problems with filing them late but also to make sure the case will work before you file the bankruptcy petition.
21. 14-21 DAYS AFTER FILING THE BANKRUPTCY PETITION – THE COURT MAILS NOTICE OF BANKRUPTCY TO EVERYONE
The Bankruptcy Clerk is going to mail a notice to everyone, this takes about 2-3 weeks. The notice tells creditors when the 341 meeting is, when to object to discharge and when to file proofs of claim:
Lesson: Sometimes creditors need to know about the bankruptcy long before 2-3 weeks arrives. If you are being garnished, facing a foreclosure or repossession, you may want to let specific creditors know about the Bankruptcy the day you file.
22. 30 DAYS AFTER FILING THE BANKRUPTCY PETITION – STATEMENTS OF INTENT
You have to file a document called a “Statement of Intention” within 30 days of Petition filing. This statement tells everyone what you intend to do with property that is security for a loan. There is a requirement to file the same thing regarding unexpired leases as well.
Lesson: What you are going to do with property that is securing a loan can be a bit complex. Get some advice.
23. 30 DAYS AFTER FILING – DEADLINE TO MAKE FIRST PLAN PAYMENT IN A CHAPTER 13
If you filed a chapter 13 Bankruptcy case, you have to make your first plan payment by sending it to the Chapter 13 Bankruptcy Trustee's special address for receipt of plan payments. He or she should provide you instructions regarding this prior to the deadline.
Lesson: Remember Chapter 13 Bankruptcy is different than Chapter 7 Bankruptcy. You are paying money into the Trustee to be distributed typically on a monthly basis for a defined period of time.
24. 45 DAYS AFTER FILING THE BANKRUPTCY PETITION – AUTOMATIC DISMISSAL
Your case gets dismissed automatically if you filed some of the thing mentioned above like, creditor mailing matrix, schedules, paystubs, etc. Lesson: You are seeing that the bankruptcy code is full of deadlines. Pay close attention.
25. 20 TO 50 DAYS AFTER FILING OF BANKRUPTCY PETITION – MEETING OF CREDITORS
The Bankruptcy Code requires that you attend a creditors meeting. You get noticed of this date, time and place when the court issues the Notice of Bankruptcy. If you don't show your case can be dismissed. As a side note: prior to this hearing by 7 days, you have to have a copy of a tax return for the last year a return was actually filed to the Trustee.
Lesson: Everyone with an interest in your case gets a shot at questioning you. Most won't but that doesn't mean you shouldn't be prepared.
26. 60 DAYS AFTER FILING – PROOF OF INSURANCE
In a Chapter 13 case you have to provide proof that your personal property that is acting as collateral is insured.
Lesson: Nice little side issue that routinely is forgotten about until it isn't.
27. 30 DAYS AFTER CREDIT MEETING – YOUR EXEMPTIONS MAY BE IN TROUBLE
The Trustee and Creditors have 30 days after the creditor meeting is over to object to any exemptions you have claimed as to your property.
Lesson: Make sure before filing the case that your property is exempt or that you have accepted the fact that it isn't.
28. 35 DAYS AFTER CREDITOR'S MEETING – CHAPTER 13 TRUSTEE HAS TO FILE A RESPONSE TO YOUR PROPOSED PLAN
In a Chapter 13 case, you have to propose a “Plan”. That plan must comport to a number of rules, laws and customs in order to be approved by the Judge. The Trustee gets his or her say in the matter and files this response about 35+ days after the Creditor's Meeting. This response will typically pick apart your plan if it has weaknesses.
Lesson: Most Chapter 13 Bankruptcy cases filed without experienced legal counsel fail. The vast majority. Many fail even with experienced counsel. If a Chapter 13 bankruptcy is necessary, you have a much better chance if you enlist the help of someone who has done it many times before.
29. 45 DAYS AFTER CREDITOR'S MEETING – STATEMENT OF INTENT AND ANOTHER CLASS
Remember the Statement of Intent you filed? Whatever you intended has to be done by now. You also have to take a second class and file the certificate proving that you took it with the Court.
Lesson: Just because you went to the 341 meeting, the work isn't over. Deals with creditors and more class time are just two examples.
30. 60 DAYS AFTER CREDITOR'S MEETING – CREDITORS AND OTHERS HAVE TO TAKE ADVANTAGE OF MOMENT IN THE SUN
You are proposing to reduce or eliminate debt you owe. Don't be surprised if some feelings are hurt. Your creditors can and must within the 60-day deadline object if they are going to do so to the discharge of a debt or all debt. The same deadline applies to motions to dismiss for abuse of the code under 707(b).
Lesson: There is a lot of research you need to do about which debts are non-dischargeable, what activity can cause a debt to be considered non-dischargeable and the effect your income and budget may have on your case.
31. 90 DAYS AFTER CREDITOR'S MEETING – NON GOVERNMENT CREDITORS NEED TO GET A MOVE ON
A creditor has to tell the Court what it is owed and prove it to some degree in order to get paid. In Arizona, the Trustee in a Chapter 7 case will often tell the creditors to hold off until it is known whether there is going to be any money to share.
Lesson: Whether a Creditor files a Proof of Claim or not may be important to your case.
32. 120 DAYS AFER FILING THE BANKRUPTCY CASE – IN A CHAPTER 7 CASE – DISCHARGE ENTERED
In a Chapter 7 case the Discharge of Debt is calendared. It isn't necessarily permanent though. It can be revoked or maybe even left “un-entered” if you have been “naughty” and don't comply with certain requests or get other things done on time.
Lesson: The Chapter 7 Discharge is the goal right? Pay attention so that you don't lose it.
33. 180 DAYS AFTER FILING – PROOFS OF CLAIM BY THE GOVERNMENT BE FILED – A SPECIAL NOD TO THE IRS
The IRS and other government entities owed money by you have longer than the average bear to tell the Court how much is owed and why. This applies in both a Chapter 13 and in a Chapter 7 case.
Lesson: If you have government debt, especially tax debt, there may be some important issues here. Learn about what they are.