As soon as your bankruptcy petition is filed, a court order goes into immediate effect that stops creditors from attempting to collect debts.

Regardless of whether you are filing a Chapter 7 bankruptcy or Chapter 13 bankruptcy, the automatic stay is applicable to both chapters.  It can be recognized as one of the greatest benefits of filing bankruptcy because it is a way to protect the Debtor from any further communication from the creditor.

The automatic stay is basically a court order that stops any further communication or attempts to collect debt by the creditor.  It is not enacted until the bankruptcy petition is filed with the court.  The automatic stay also means creditors can no longer proceed with repossessions, foreclosures, garnishments, and beginning or continuing lawsuits unless permission is obtained from the bankruptcy court. The automatic stay remains in effect until the bankruptcy is discharged on behalf of the Debtor.

A creditor, depending on the complexity of the case, may try to have the stay lifted, but this is at the discretion of the bankruptcy court.  After a Debtor receives their discharge notification, the automatic stay is then replaced by a permanent injunction.  In other words, creditors are permanently prohibited from trying to collect on any of the debts listed in the client’s bankruptcy.   It is important to keep in mind that domestic obligations such as alimony or child support typically do not fall under the protection of the automatic stay.  Criminal proceedings against the Debtor are also not “stopped” when an automatic stay is enacted for bankruptcy.

From a client’s perspective, the automatic stay is also viewed as a form of protection from creditors.  If for any reason you were to be contacted by a creditor after the bankruptcy has been filed, then you would need to simply provide him or her with your case number.  Your bankruptcy attorney does this automatically after your case is filed but some creditors may, unknowingly, call if they have not yet received the official notice. If you don’t feel comfortable having to talk to the creditor, then simply let them know to contact your bankruptcy attorney’s office.  The attorney or one of their staff members can also provide the creditor with the information needed.  Generally speaking, it’s as simple as giving the creditor your case number over the phone if they were to contact you, but if they continued to ask questions for any reason, let them know all further communication should be directed towards your attorney’s office.  There are penalties for creditors who violate the automatic stay and since they receive notice of the bankruptcy filing shortly after it’s filed, most will stop contacting the Debtor.

Threatening phone calls and letters from creditors are what cause most clients to be stressed and overwhelmed with emotion.  When these stop, it offers a brighter day and newer perspective for the Debtor.  We often hear clients say “this is when my new start actually began, when the phone calls stopped.”  We work hard to get your case turned around as quickly as possible for you and on your way to what many clients consider their new financial start.

In short, like many areas of the law, it depends. You are responsible for repaying these overpayments. However, if you file bankruptcy and include that debt on the bankruptcy and the government does not object to the discharge of the debt then it may be wiped out. As with any other unsecured creditor they will of course have a set amount of time to object to the discharge, but after that time is up then that debt will go away just like the others. Of course, if the bankruptcy Trustee looks deeper into your case and finds you received these overpayments fraudulently, then there is a possibility those overpayments will not be discharged.

Overpayment can happen because of something like you were out of work and receiving disability payments from the Social Security Administration (SSA) and go back to work sooner than expected and try and inform the SSA but they do not respond and keep paying you. Technically when they discover this, they are supposed to collect back from you the amount you were overpaid. But if you were to file bankruptcy and they did not object to the discharge, then they cannot collect that money from you.

A Notice of Rights to Have Exemptions Designated is a fancy way of the creditor letting you know that your property is going to be taken from you.

As mentioned in another blog post, after the creditor serves you with a lawsuit you have 30 days to provide a written response, also called an answer, which basically extends the amount of time you have until the creditor takes further action.

If you don’t respond to the lawsuit you will be served with a Default Judgment, which simply states that you owe money to a creditor.  Even if you do respond to the complaint by filing an answer the creditor will usually be successful on a summary judgment motion. This means the judge will decide that you don’t have a defense to owing the debt and they will find in the creditor’s favor.

After a creditor obtains a judgment against you, their next move in the collection process will be to serve you with a Notice of Rights to Have Exemptions Designated. You will most likely receive this paperwork similar to how you received the lawsuit and judgment, by the local Sheriff’s office or certified mail.  When you are served with the initial lawsuit, it is in your best interest to go ahead and contact a bankruptcy attorney before a judgment is issued against you.  However, this doesn’t mean if you have been served with a judgment and Notice of Rights to Have Exemptions Designated that filing for bankruptcy is not an option.  It is absolutely still an option; you just want to take action sooner rather than later so you do not risk losing your property.

When you are served with the Notice of Rights to Have Exemptions Designated you will have a chance to list out all of your property and utilize specific exemptions in regards to what you can and cannot protect.  However, the problem with doing so is that if you fail to list something or list it incorrectly protected, you run the risk of your property being taken from you.  You also have a timeframe to complete the right to have exemptions designated document and get it filed with the court, which is 20 days.

Far too often, clients tell us “I have nothing for them to take,” but this is usually not the case.  Many items are often subject to being seized such as land, house(s), car(s), bank accounts, etc.  A creditor will take whatever they can get and are doing so to try an repay the amount you owe them.  From our experience, many creditors feel by taking whatever they can from you, it not only gets your attention but will push the Debtor into wanting to make payments.  What they are not considering is the emotional impact it can have on you and your family.  If you are served with a Notice of Rights to Have Exemptions Designated and want to find out your options for protecting your property, you should contact a bankruptcy attorney immediately.  This is because after the Notice of Rights to Have Exemptions Designated has been served and you’ve been given the 20 days to file a response, a Writ of Execution will be placed against you.  This basically means that the Sheriff will come pick up, on behalf of the creditor, any goods that were not listed or protected.  This is where the exemption documentation that you completed by listing out your property is so important.  If the property is not listed correctly or not listed at all, you stand the high risk of the property being taken from you right then and there.

By filing bankruptcy an automatic stay goes into place, which stops the creditor (or Sheriff) from coming to seize any of your property.

Like many areas in the law, it depends.  If the heart attack occurred during your normal work activities, usually the heart attack injury is not compensable under North Carolina workers’ compensation laws.  For the injury to be compensable, the worker must show the heart attack was caused by some unusual or unexpected event and was in the course and scope of employment.

A good example would be an administrative assistant, who had a “desk job,” was on the first floor of a fifteen-story building.  Due to a power outage, the elevators were temporarily not working.  The worker’s supervisor told the worker to quickly go to the twelfth floor, via the stairs, to pick up some important documents. As the worker was going up the stairs she began to breath hard and over exerted herself.  As the worker reached the tenth floor, she began to have chest pain and suffered a heart attack.  This is a compensable act because this was not the normal routine of the administrative assistant to run up twelve flights of stairs.  Her normal job was to have a sedimentary job at her desk. She suffered a heart attack due to this “unusual event” of her running up ten flights of stairs. This injury should be covered under the workers compensation laws.

What if the employer knew the administrative assistant had a preexisting heart condition?  This would be irrelevant. The heart attack would still be compensable because the employer “takes the employee as they find them.”

What if a convenience store employee had a heart attack as an armed robber came into the store with a shotgun and pointed the shotgun at the clerk?  This would probably be compensable injury because it is not the “normal duties” of a convenience store clerk to have a shotgun pointed at them.

What if a store clerk was checking out a customer and the clerk had a heart attack?  Would this be compensable under the workers compensation laws?  Probably not, because the clerk was doing his “normal and customary duties ” when he suffered the heart attack.  Nothing out of the ordinary caused the clerk to have the heart attack.

The bottom line is, there must be some act or accident outside of the normal course of employment that caused the heart attack. There must be a causal connection between this act and the resulting heart attack. If you are looking for a Charlotte workers’ compensation attorney or Greensboro workers’ compensation lawyer be sure to contact us today.

You sure can! It may be a bit more difficult to find a place that will rent to you than it otherwise would be, but be patient. Depending on the rental agency, you may be required to pay a higher security deposit or even be required to have a co-signer. It really depends on the rental agency.

There is a chance that you may have to apply to several places before you find one that works. When applying, be up front with the apartment complex or rental agency about the fact that you filed bankruptcy. This will help because then it will not be a surprise to them when they go to check your credit. You may want to try smaller complexes or even rentals from individuals. They may be more willing to accept you even though you filed bankruptcy. They may not even check your credit, but that is up to them. Larger rental agencies are often required to do credit checks so you will find that it is common practice for large apartment complexes to do credit checks before they let you rent.

You may want to ask if you qualify for a short-term lease, maybe six months or so. This could provide you the opportunity to prove you are able to make the rent payments each month. After that period, they may be able and willing to provide you with a longer lease.  The ability to prove you have a steady income and are able to make the payments will hopefully indicate that you will be able to afford the rent.

If you have rented before, make sure to point out your good rental history. Be prepared that they may want to verify this so be sure you are truthful. Additionally, take the time to shop around. It may take some time to find the right place but be sure you do not settle for just anything. Even if you have filed bankruptcy that does not mean that you can only rent substandard housing. Be patient and shop around and hopefully you will find the right place for you.

If you suspect that you will have difficulty being approved to rent after your bankruptcy filing, you may want to go ahead and sign up for a lease prior to the filing of your bankruptcy petition. This would really apply to those who are surrendering their home in their bankruptcy and are certain they will need to find a new place to live. By signing a rental lease prior to filing your bankruptcy, you are avoiding the bankruptcy showing up on your credit report when the apartment complex checks your credit.

The good news, though, is that you do have options regarding finding a place to rent after bankruptcy, and you will be able to find the right place for you and your family. Be patient, do your research, and keep your mind open to all options.

Preference in a bankruptcy means that you are showing favoritism to one creditor over the others.  In other words, you treat one creditor better than another. For an example, let’s say that you received a bonus check of $1000 on top of your regular pay. You have a large number of creditors and you owe them all a considerable amount of money. However, you do have a charge card to your favorite department store and you choose to take your bonus check to pay off the $1000 balance on that account since you really like that card and want to be able to continue using it. Well, the court has a bit of a problem with that!

The court views this as “preferential treatment” and views it as you should have evenly spread out that $1000 by paying a little bit to each creditor instead of giving the entire $1000 to one specific creditor. Upon your bankruptcy filing, the bankruptcy Trustee will then contact that creditor (in this example is your favorite department store) and make them return the money to him so that he can divide it out equally among ALL of your creditors.

When you meet with your attorney prior to your bankruptcy filing, you need to discuss which creditors/debts you have been paying and the amounts that you have paid. You will also want to have an idea or timeframe as to when you will be filing your bankruptcy, so your attorney can advise you whether or not to pay any creditors and how much you should pay if you choose to pay them.

A normal credit card or medical bill can be deemed as preferential treatment but do not confuse this with your secured debts such as a home loan or car loan. If you are filing a Chapter 7 and plan on keeping your house and/or car, these loans MUST be current at the time you file your bankruptcy and kept current during your time in bankruptcy in order for you to keep them without any problems arising. Making payments to secured creditors above everyone else is not viewed as a preference.

Another important thing to keep in mind is that preferential payments to “insiders” – family members or friends – are also viewed as problematic. There can be consequences to paying family members or friends prior to your bankruptcy filing, so if you have done so or are considering do so and are also considering bankruptcy, you should talk to a bankruptcy attorney immediately. Depending on the circumstances, the bankruptcy Trustee may require the friend or family member you paid the money to to return that money to the Trustee so he can distribute it to your creditors. Therefore, it is very important to discuss this situation with your attorney prior to your bankruptcy filing.

If you are considering paying a debt prior to your bankruptcy filing, contact your bankruptcy attorney first to ensure that you are not going to cause problems later on in your case.

Food stamps are a wonderful benefit for those who qualify.  If there are times when you are finding yourself in the predicament of deciding whether to pay the energy bill or buy groceries for the week, you should take the time to research the eligibility requirements for food stamps.  If you are in North Carolina, check out the NC food stamps website for information on how to apply for food stamps. Visit this pageto find out where the Department of Social Services (“DSS”) office is located in your county.

The most difficult part of applying for food stamps is finding the time.  If you can go to the website, print out the necessary forms, and fill them out beforehand, that is half the battle.  You will need certain documents to verify the information you have listed on the application.  These are the basic documents you will need – but verify with your local Department of Social Services to ensure you have gathered all of the documents they require:

Drivers license and social security card (or some other official document with your name and social security number on it).

Your last two months of paychecks.  If your check is usually the same, sometimes just one month will be accepted, but try to provide at least two.

Proof of your daycare/after school care expenses.

Proof of utility bills in your name.

You can make the process easier on yourself by keeping your documents organized. As you fill out your application, make note of the sections and what documentation may be required for your personal answers.

Next, you must go to the DSS office.  Unfortunately, there is no “good” time to go stand in line.  Regardless of the day of the week or time of day, you will be waiting in line and it will be crowded. If you have kids, you may want to try to find a babysitter or bring a book to keep them occupied if you have to bring them with you. Please be patient while you are there; remember the specialists are there to help and can only work so fast! They are excellent in answering questions of all types or at least giving you a number to the department you should be contacting.

After this line, you will then move to a different area (with chairs this time) to wait for your assigned case worker to call your name for an interview.  This interview is not bad and they are just going over your application, so no need to be nervous!  As a side note, if you are interested in any other services such as WIC, Medicaid, help with child support, housing, or daycare, your case worker usually can steer you in the right direction.

Food stamps are now issued as an EBT card, which works exactly as a debit card.  It makes paying fast and easy.  And the icing on the cake is that most grocery stores have an option for EBT/Food stamps, for those who need the help but are a little embarrassed.

With the ever improving online banking that is available through most banks, it is possible to pay almost all of your bills without ever stepping foot outside of your home.  There is no doubt filing bankruptcy can impact every situation of everyday life, but what about paying your bills?  What happens if you have everything automatically drafted out of your account each month?  Will that continue?

It depends. If your home mortgage or car payment is automatically drafted prior to your bankruptcy filing, then during the duration of the bankruptcy the mortgage company or vehicle creditor will likely stop automatic drafts and require you to manually pay your bill, or will only accept a mailed-in payment.  When you file bankruptcy there is an “automatic stay” that goes into effect which states that your creditors cannot contact you for a payment.  Many lien holders (such as your mortgage company or vehicle creditor) would rather play it “safe than sorry” and will code your account as being in active bankruptcy and will not automatically draft payments. In some cases, the creditor will not even send monthly statements.  If you wish to continue receiving monthly statements, contact the creditor to let them know. They may require you to send in written permission from your bankruptcy attorney, which is common practice with creditors.

If you have your utilities automatically drafted from your bank account, then they will likely continue.  If your automatic drafts are for credit cards and other debts, once you file the bankruptcy they should automatically stop since the debt is included in the bankruptcy. Those creditors should not be receiving payments at all – whether automatic draft or otherwise – due to the automatic stay.

Therefore, after you sign your petition and your bankruptcy is filed, it is imperative to make your monthly payments on your secured debts.  If your payment is normally automatically drafted, do not think something is wrong in the transaction and sit and wait for it to happen.  Go ahead and contact your creditor to find out the best way to make the payment (whether they will accept the payment over the phone or if you will have to mail in your payment).  Discuss any confusion you may have with your attorney.  Your bankruptcy is one step towards obtaining your financial freedom; you do not want to file bankruptcy and then become behind on your vehicle or mortgage due to the fact that they no longer just took their payment like they were before your bankruptcy filing.

If you are behind on car payments or decide you will not be able to make the payments in the future, you can decide to voluntarily turn in your vehicle. We encourage our clients not to voluntary turn in their vehicle prior to filing bankruptcy, but we will discuss that in more detail below.

What if you do choose to voluntarily surrender your vehicle? How should you go about doing that? If you are going to voluntarily turn in your car you will need to call the finance company and set up a time where you can bring the vehicle to them. It is critical you get a business card or use some kind of identifying method to show who you left the vehicle with. You do not want to just drop it off and walk away without knowing exactly whom you turned the vehicle in to. In the past we have heard of dealerships not reporting the vehicle as turned in to the finance company. This means you would still owe on the car. Sometimes people will choose to voluntarily turn in the vehicle instead of having the finance company come to their home or place of work and repossess it. By doing so they can avoid the feeling of not knowing when their car will be picked up. It is on their terms instead of the lenders.

Once you turn the vehicle in to them, the creditor will then sell the vehicle. You will receive a statement from the finance company after the vehicle is sold. You will still be responsible for the difference between the amount you still owe for the vehicle and what the sales price is. That debt does not automatically go away just because you do not have the vehicle anymore. The amount you owe is called the deficiency balance and this is a debt that can be included in a bankruptcy filing. This occurs whether the vehicle is voluntarily surrendered or repossessed.

However, it is important to know voluntarily turning in a vehicle prior to bankruptcy filing will still go on your credit report as a repossession. This means you will still have a negative mark on your credit report and do not forget you will still owe the deficiency balance even if you voluntarily surrender the vehicle and do not file bankruptcy. We typically encourage our clients to surrender their vehicle within the bankruptcy instead of the voluntary surrender prior to bankruptcy. If you surrender the vehicle within your bankruptcy a repossession does not appear on your credit, and you can still eliminate the remaining debt within your bankruptcy. If you are planning to file bankruptcy and have already voluntarily surrendered your vehicle, be sure you discuss the voluntary surrender with your attorney so the deficiency balance can be properly taken care of.

Do you owe income taxes to the Internal Revenue Service (IRS) or State of North Carolina (NCDOR)?  If so, you may find that you have an income tax lien filed against you.  There are two ways to confirm whether a tax lien has been “perfected” or filed with the Clerk of Court in the county you claim as your residence.

First, you can go to the Clerk of Court’s office in the county you live.  The Clerk’s office is most likely located inside the county courthouse.   Ask to speak to someone in the civil filing department within the Clerk of Court’s office.  Explain to the clerk at the desk or window that you need to determine if you have a tax lien filed against you.  The Clerk of Court’s staff is usually extremely helpful and will assist you with your research to determine if a tax lien has been filed against you.  If you determine there is a lien filed against you, we recommend you obtain a copy of the lien paperwork, since it will specify which tax years are included in the lien.  In many cases you may owe taxes for several years’ but only select years are included in the tax lien.  It is highly recommended that you bring cash with you to the Clerk of Court’s office, since they may not accept a check, credit card or debit card to pay for copies of the tax lien paperwork.

The other option for determining if you have a tax lien filed against you is to contact the IRS or NCDOR and inquire if they have a tax lien against you.  If they do have a lien filed against you, ask that they provide you with a copy of the paperwork.  The copy may be provided to you free of charge or there may be a nominal fee, but it may take several days to obtain a copy of the lien through the U.S. Postal Service.

A perfected tax lien, one filed with the Clerk of Court within the county you live, attaches to both your real and personal property.  In other words, the tax lien will attach to your home, cars, bank accounts, etc.  As a result, it is extremely important to determine if you have a tax lien prior to filing bankruptcy.  The amount of taxes you owe to the IRS or NCDOR, and the existence of a tax lien, will impact the type of bankruptcy that is best suited for your needs and it will directly impact your monthly payments in a Chapter 13 bankruptcy.  Checking for a tax lien is time well spent, especially if it saves you money in your bankruptcy!