Am I Required to List Stock On A Bankruptcy?

When you start to fill out the paperwork for your bankruptcy, it can seem a bit overwhelming.  It seems you have to provide every single bit of information regarding your life and finances.  In a sense, you do.  The Bankruptcy Code states that you MUST disclose ALL of your assets to the court, including but not limited to, personal property, debt collections, and financial accounts.

Person Writing on Laptop

Stock falls along the lines of a personal account.  Think about it, if you hit hard times and needed cash, you could sell a portion (or all) of your stock to get money.  You always have to remember that if you can touch the money, then the court or bankruptcy Trustee can too.  To protect your asset you will need to make sure that it is listed in the bankruptcy and valued correctly.  To determine the value of your stock, you will need to take the current market value and multiply it by the number of shares that you own.

Protecting your stock all depends on the amount of “wildcard” exemption.  This is an exemption that can be used for basically any property that you have/own.  If the stock is able to be protected under the ?wildcard? exemption, then the Trustee will not interfere with the stock.  If the stock is not properly protected, the Trustee will have the right to seize the stock, sell it and use the proceeds to pay your creditors.

In order to protect your assets it’s important that you fully and accurately disclose your property to your bankruptcy attorney. An experienced bankruptcy attorney will be able to use bankruptcy exemptions to protect most, if not all, of your personal property.


What is a Motion to Avoid a Judicial Lien in Bankruptcy?

You may be considering filing bankruptcy because one of your creditors has obtained a judgment against you. Most people are uncertain of the consequences that a judgment can have. Usually, if you do not own any real property (house or land) or if you do not have any equity in your property, it can be difficult for the judgment creditor to satisfy the judgment. In other words, if you do not own any property with value, it can be difficult for the creditor to receive money or property from you to pay off the judgment.

Past Due Bills Sitting in Mailbox? Time for Bankruptcy

On the other hand, you may need to be concerned about a judicial lien. If you own real property in the same county where the judgment was entered by the court, then the creditor automatically has a lien against your real property. This means that when you try to sell your house, you will have to pay off the judgment before you can sell the house.

To better explain how a judgment lien works, here is a common situation:

You owe $25,000.00 on a credit card and have fallen behind on the payments. You first receive a Civil Summons from the attorney representing the credit card company. They give you 30 days respond, and when no response is received from you, the credit card company obtains a Judgment from the court. The lawsuit was filed in Guilford County, which is where your home is located. Ten years later, you try to sell your home. You are unable to do so without first paying off the $25,000.00 judgment (plus interest and attorney fees).

The good news is that bankruptcy can essentially eliminate the judgment lien on your home. If you own a home and a creditor has obtained a judgment against you, ask your bankruptcy attorney about filing a Motion to Avoid a Judicial Lien. In the appropriate situations, your attorney can file a motion with the bankruptcy court requesting that the judicial lien be removed from your home upon completion of your bankruptcy. If the bankruptcy court grants the motion, then the judgment creditor will no longer have a lien on your house. You also need to ensure that the judgment debt is listed on your actual bankruptcy petition in order for the debt to be eliminated.

Although your bankruptcy attorney will charge an additional fee to file the Motion to Avoid a Judicial Lien, it is well worth the attorney fee to eliminate thousands of dollars in additional liens on your home. For further information on whether a Motion to Avoid a Judicial Lien will be best in your situation, contact your bankruptcy lawyer.

What Are the Most Common Reasons A Bankruptcy Case is Dismissed?

There are numerous reasons a bankruptcy case may be dismissed. A dismissal of a bankruptcy case is when the federal judge issues an order terminating a case.  Usually the debts are not eliminated if the case is dismissed.  In contrast, a “discharge” means the debts have been eliminated.  Listed below are the most common reasons a bankruptcy case could be dismissed:

Working at Laptop

1)    The debtor gives a false oath or information on the bankruptcy petition with the intent to defraud creditors,

2)    The debtor has filed a previous bankruptcy within a certain time period and is not eligible to file another bankruptcy and receive a discharge of the debts,

3)    The debtor has not filed all the required documents with the bankruptcy court,

4)    The debtor did not take and complete the required court approved credit counseling and/or financial management courses as required by federal law,

5)    The debtor fails to provide certain documentation to the bankruptcy Trustee upon request of such documents by the Trustee,

6)    The bankruptcy Trustee has objected to the discharge of the debtor’s debts based upon his investigation of the debtor,

7)    In a Chapter 13 repayment plan, the debtor fails to make the required Chapter 13 plan payments to the Chapter 13 Trustee,

8)    The debtor has non-exempt property and fails to turn such property over to the Trustee upon request,

9)    The debtor fails to obey a lawful order of the court, and

10) The bankruptcy judge believes there is good cause to deny the debtor a discharge and dismisses the bankruptcy case.

In conclusion, the above list is not exhaustive, but does highlight some of the most common reasons a bankruptcy case could be dismissed.

Can I Collect Workers’ Compensation Benefits If My Employer Files For Bankruptcy?

Most employers’ employees are covered by workers’ compensation insurance.  This workers’ compensation insurance is provided by a third party insurance company, not the employer themselves. Insurance companies are required by the state to keep a reserve of money on hand to cover the cost to pay out benefits to the injured worker. Therefore, if your employer files bankruptcy and they had workers’ compensation insurance at the time you were injured, the insurance company will be required to pay you your benefits.

Doctor looking at an x-ray

However, there are a few exceptions to this rule, especially if your employer is a large company that is “self insured”.  In the event your employer is self insured, they must usually have a bond through an insurance company that will “guarantee” injured workers receive their benefits in the event the employer files bankruptcy or cannot provide benefits to the injured worker.

Sadly, if your employer does not have workers’ compensation insurance and they file bankruptcy, it may be difficult to collect money from them if you were injured on the job because they are “broke” and you “can’t get water from a dry well.”

Can I Keep My Tax Refunds After Filing Bankruptcy?

April 15 | CalendarWell, that depends…it depends on which bankruptcy chapter you file and also on your state’s exemptions.

If you file a Chapter 7 bankruptcy, your attorney will try to exempt your tax refund usually with the “wild card” exemption. The wild card exemption has a limit and may have to be used to protect other assets that may be more important. So if that is the case, you probably will not be able your keep your full refund. The bankruptcy Trustee may take the non-exempt portion of your tax refunds to pay your creditors.

If you file a Chapter 13 bankruptcy the tax refund is considered income and can affect your court payment amount. It is possible that the Trustee will want to use the refund as part of your payment plan to your creditors. If, however, you have enough income to make your Court payments the Trustee will most likely let you keep your refund if your attorney has properly exempted it.

It is always best to consult an experienced bankruptcy attorney if you think you may be getting a refund before you file. He or she can advise you on your best options to try to keep your tax refunds.


Can Children Attend the Creditors Meeting?

The creditors’ meeting is a serious affair and can take several hours. Most children (adults too) will find it boring and may not be able to sit still that long. While you may bring your child with you, if he or she can’t remain quiet and sit still for an extended period of time it may be best to find some kind of child care. The Bankruptcy Trustee will want your full attention and will not look kindly on disruptive children.

Husband and Wife with Young Child

At the same time, if you have a young child and cannot get reasonable child care then you can bring your child to the creditors’ meeting. As with most areas of the law, the different courts and trustees may vary on their tolerance of children at the creditors meeting so be sure to ask your bankruptcy attorney specifically about your areas courts and trustees.


Is Child Support or Alimony Included As Income in Bankruptcy?

Father & Daughter on Surfing the InternetBefore you file bankruptcy your attorney will ask you for verification of your last six months of income as a factor to determine Means Test qualification. The Means Test is a household income limit you must fall below according to the number of household occupants in order to qualify for a Chapter 7 bankruptcy.

Child support and alimony are considered income and can greatly impact your ability to qualify for the Means Test. Income from child support or alimony may put you over the Means Test limit causing you to file a Chapter 13 bankruptcy instead of a Chapter 7 bankruptcy.

In addition to having an impact on your Means Test calculation child support and/or alimony will also be considered when determining your monthly budget moving forward. It’s important that you discuss any form of domestic support obligation (child support or alimony) you receive with your attorney before filing your bankruptcy.


Are Food Stamps Considered Income in Bankruptcy Filings?

When you go to file bankruptcy, the court considers your income to determine whether or not you qualify for a Chapter 7 bankruptcy, and in the case of filing a Chapter 13 bankruptcy, to determine the amount of your monthly payments.  Obvious income would be wages earned from employment, self-employment income, social security and child support; but what about government assistance such as food stamps?  In short, food stamps are considered as income for the purposes of a bankruptcy.

Young boy holding the hands of his parents.

The Means Test in a bankruptcy considers most income that you receive: wages, self employment, child support, family support, retirement withdrawals. When you receive food stamps, the monies go straight to a debit card in which you can only use to purchase food in a store that accepts the card.  You cannot get cash back from the card?. However, for the purposes of the Means Test, it is still considered income. Since you can use the governmental assistance to purchase necessities, such as groceries, it is considered to be a part of your monthly income that is calculated under the Means Test. Therefore, it needs to be accurately reflected in both the Means Test and in Schedule I, which is the section that discloses your income to the courts.