Deciding To Split

Posted on: 14 March 2019

For many chapter 7 bankruptcy filers, the creditor's meeting serves as the big milestone in the case. Once you have met the judge or bankruptcy trustee, the case is just about over and the nervousness of the meeting has passed. In most cases, you are now on a clear trajectory to the finish, but you should also understand that there are few minor issues that might need your attention. Read on to learn more.

The Creditor's Meeting Fallout

Though it's called a creditor's meeting, not many creditors need to appear. While their apparent lack of interest in your bankruptcy is comforting, you may yet have to deal with a creditor. Creditors can raise objections to debts at any time up until the bankruptcy is final. If you find out that a creditor is objecting to a debt, speak to your attorney. Some common reasons for objections are:

• Failing to be truthful on credit card or loan applications (overstating income, for example).
• Using your credit cards for frivolous purchases right before you file.
• Taking cash advances over a certain limit right before you file.

Reaffirmations

In some cases, a reaffirmation of a loan is handled at the creditor's meeting, but not always. If you want to keep a piece of property, such as a car, you may have an opportunity to sign a written promise to continue making payments on the loan as you originally agreed to. Reaffirmations are common with auto loans where the vehicle is not worth much money to the bankruptcy courts due to the loan pay-off amount.

Take Your Debtor Education Class

Before your bankruptcy can become final, you must submit proof of the credit counseling class to the bankruptcy courts. This class can be taken anytime after the creditor's meeting and is full of helpful information about dealing with life after a bankruptcy has affected your credit record. 

Allow for Property Seizures

Unfortunately, some chapter 7 filers will end up surrendering some of their property. While bankruptcy exemptions can help, filers who have valuable property might have to make arrangements for the property to be taken from them. For example, if you own a pick-up truck worth $25,000 and you have insufficient exemptions to reduce its value, the bankruptcy court may ask that the truck be parked in a convenient area so that it can be removed from your possession.

To learn more about any of the above issues, speak with an office that offers bankruptcy attorney services.