Typical Pre-Filing Concerns
1.0 The Hearing Date
The attorney has no control over when the court may schedule your case for hearing. Hearings are usually scheduled 30 to 45 days (give or take a week) after the case is filed. If you know that you will be unavailable or out of town during certain times, please note that information in writing for your attorney so that he can properly plan the filing of your case.
2.0 Pending Foreclosure
If there is a foreclosure pending against your property on the day you file, and your bankruptcy gets dismissed for any reason (such as a failure to appear at your first meeting of creditors or to cooperate with the trustee) you may not be allowed to re-file for 180 days. This is to give your creditor time to complete a foreclosure before you can re-file.
If you have any unfiled state or federal tax returns, they must be filed before the attorney can file your case. Any tax refunds that you may be entitled to on the day of filing belong to the Court and may be taken to help satisfy the claims of your creditors. This can include returns that you are not required to file until the following year. For example in November you have already earned 11/12th of the return you may receive the following year. In a chapter 13 you will be required to contribute any refunds in excess of $1,000 to the court each year of your plan.
If you have received a substantial tax refund prior to filing, it is important that at least one month pass for every one to two thousand dollars of the tax refund so that a reasonable amount of time will have passed for the spending of the refund. If the trustee believes that an insufficient amount of time has passed, the trustee can request copies of financial records to determine what was done with the tax refund. This is to ensure that no creditor has received a preferential transfer.
4.0 Mortgage Payments
If you have a home which you wish to retain in bankruptcy you must continue to make all the regular mortgage payments after filing, and you must be current at the time you execute the reaffirmation agreement.
If you list utilities on your bankruptcy, you must post a new deposit within 20 days if you wish to continue service. Your deposit will often be two times the largest monthly bill you have had with that service.
6.0 Non-Exempt Property
It is important to understand that you may lose some property if you file a bankruptcy. Your attorney will do all he can to minimize that possibility. However, if you are concerned about specific items of property you should discuss them with the attorney.
7.0 Large Income or Expenses
If make a large amount of income (above the Utah Median) the court may require you to provide proof of the payments you make towards your monthly expenses. In addition, the court has guidelines on what it considers appropriate. If your expenses exceed these amounts, the court will want to know why your expenses are so high and will require canceled checks showing your actual expenditures over the last three months. If they deem your current budget to be unreasonable, they may request that you convert your chapter 7 to a chapter 13.
8.0 Government I.D.
At your first meeting of creditors you will be required to present original photo ID and original proof of Social Security number. This same ID must also be presented to the attorney and copied prior to the hearing. If you do not currently have such ID you will need to obtain it. If you go to the Social Security Administration (485 N Freedom Blvd [200 W] in Provo) to get a new card, please have them write the social security number on the receipt. If your drivers licence has your social security number on it you do not need a separate social security card for the hearing.
9.0 Bank Accounts
Any money in any bank accounts you have control over may be subject to seizure by the Court. As a result you should have less than $100.00 in the bank on the date of filing. Note that this is the actual balance in the account, not the amount in your check ledger. Uncleared checks do not count.
As soon as possible (or at least on the day prior to filing) you should terminate any automatic withdrawals that are coming out of your account. You should communicate with the bank directly to terminate any of these arrangements. In addition, it may be appropriate to forward a notice of termination of assignment to the creditor involved. If you need one of these documents you must bring in to the attorney a copy of the original assignment document. He will then prepare the appropriate documents that you can hand deliver to the creditor.
If you have money in a bank account and you owe money to that particular institution, you should remove the money prior to filing. Otherwise the bank will seize the money and your account will be frozen as soon as they learn that you have filed bankruptcy. If you wish to retain a bank account with a creditor, it will be necessary to reaffirm on all obligations you have with that particular financial institution. Once the reaffirmation agreement is signed, the Bank or Credit Union will generally unfreeze your account. If you determine that it is not in your best interest to reaffirm, then you should open a new bank account with another institution prior to the filing of Bankruptcy. In 13's you should always open a new account.
10.0 Payroll Deductions
Prior to filing, you should contact your payroll department to stop all payroll deductions and wage assignments for the benefit of creditors (other than retirement loans) that you intend to discharge in your bankruptcy. It may also be necessary to provide a notice of termination of assignment to particular creditors. In such a case, you must bring in a copy of the original written assignment or wage allotment. The attorney can then prepare the appropriate documents for you to hand deliver to the creditor. If the creditor is out of state, the attorney will mail the notice to them. If you want the notice sent by registered mail, there will be an additional fee.
It is important for you to understand how Bankruptcy impacts a garnishment. If the Bankruptcy is filed prior to the issuance of the Garnishment and its service upon your employer, the garnishment can be ignored. However, if a garnishment is already in place on the date of filing, the creditor is still entitled to garnish your wages up to the date of the actual filing. The filing of the Bankruptcy then acts as the closing date of your pay period for garnishment purposes.
Sometimes a client will have a friendly employer, who is willing to reject a garnishment if you file Bankruptcy before the end of the pay period. However, this is a very dangerous thing for an employer to do. If the creditor complains, the District Court will order the employer to pay the full amount of the debt, not just the amounts that should have been garnished. This can obviously have an impact on your employment. Therefore, it is strongly recommended that you not allow your employer to do this.
If you have a garnishment pending at the time you file your bankruptcy you should provide the attorney with that information, a copy of the garnishment, and the name and fax number of someone in your payroll department in writing.
12.0 Supplemental Orders
If you receive a Motion and Order in Supplemental Proceedings before the filing of a bankruptcy, you must attend that hearing even if you file bankruptcy prior to the date of hearing. Some attorneys will excuse you from the hearing if you call them and let them know of the bankruptcy filing. However, you cannot insure that they will properly inform the court of your bankruptcy. As a result, you should appear at those hearings as a precautionary matter.
Certain other situations give rise to unique problems that should be discussed with the attorney. These include any of the following: you have given away property as gifts that you have not yet fully paid for, you are recently divorced or are anticipating divorce, you are recently married, you are anticipating a major medical expense in the near future, you have co-signers on any of your debts, you have missed payments on any secured debt, you have bad checks that have not been referred to collection, you own real property outside of Utah, you have not lived in Utah for two years, you own and operate or have an interest in any business, you have more than one loan with the individual who financed your vehicle, or you have given the same property as collateral on more than one loan.