Bankruptcy Rules – Page 3 – Law Office of Rick Morin, PC

Bankruptcy Law, Bankruptcy Rules, Chapter 7 Bankruptcy

Sacramento Bankruptcy Filing Fee Installment Request

I have written about the cost of Chapter 7 Bankruptcy in Sacramento as well as recent increases to the filing fees here in town. One question I often get is whether the Bankruptcy Filing Fee can be paid in installments. The answer is yes!

Currently the Chapter 7 Bankruptcy filing fee is $335. This amount does not go to the attorneys. Rather, it is the fee that the United States Bankruptcy Court charges to start a new bankruptcy case. Think of it as the “price of admission” to bankruptcy court.

Part of the fee pays for the court itself, including staff and facilities. Part of the filing fee compensates the Chapter 7 Trustee that is assigned to your case.

While bankruptcy can be expensive both in attorney’s fees and the court filing fee, there are ways to help reduce the burden. One option my clients ask for is the Chapter 7 Bankruptcy Filing Fee Installment Plan.

At the start of a case, we can ask the Judge to pay the filing fee over time. This can be helpful to a person that needs to file a case immediately to stop a wage garnishment or bank levy. Most of the time the requests are granted.

Currently, the Bankruptcy Court will allow a person to request up to four installments. Because the filing fee is $335, that works out to be just over $83 per month over four months.

Typically I will propose to the Court that the first payment be due one month after the filing of the case. Each subsequent payment is due a month after that, until all $335 has been paid in full.

A person considering the payment plan for filing fees needs to be careful! The Bankruptcy Court can close your Chapter 7 case if you do not make all of your payments on time. Or, if at the end of the case, you owe any money to the court, they will dismiss your case without discharge. If this happens, you will have to pay additional attorney’s fees and a new filing fee to reopen your case — just to pay your remaining balance.

If you have any questions about the filing fee for Chapter 7 Bankruptcy in Sacramento, please call my office at (916) 333-2222.

June 30, 2014/by Attorney Rick Morin

Bankruptcy Law, Bankruptcy Rules, Chapter 7 Bankruptcy

Emergency Bankruptcy Can Save Your Bacon

If you were just slapped with a notice of a bank levy, a wage garnishment, or served with a lawsuit, you might be wondering about your options. In these cases, an emergency bankruptcy filing may be appropriate.

Typically I work with my clients over 2-4 weeks to prepare their bankruptcy case for filing. However, in cases where there is a pending wage garnishment or bank levy, my office can turn a case around much faster.

In fact, my office can file an emergency bankruptcy case in as little 6 hours after initial contact with the client.

By filing immediately, a wage garnishment or a bank levy can be stopped in their tracks. This prevents your creditors from taking any money directly from your paycheck or bank account.

As with most bankruptcy filings, an emergency bankruptcy will also halt all court cases that are pending. If bankruptcy is appropriate for your financial situation, filing a case will stop court actions by your creditors. This can save you time and money, and there is no need to wait until a lawsuit goes to judgement in order to file bankruptcy.

Sometimes an emergency bankruptcy filing is called a “skeleton petition” by the Bankruptcy Courts and the Trustees. In essence, an emergency bankruptcy is just the first few pages of the typical bankruptcy petition.

Once filed, the debtor and the debtor’s attorney have 14 days to complete the rest of the bankruptcy paperwork. This condensed time frame can be very intense for both the debtor and the attorney. Despite the rush, it is very important to get the remaining bankruptcy paperwork 100% right.

If you have been served with a notice of a bank levy or wage garnishment, it is important that you not wait until the last minute to file your emergency petition. Payroll departments and the Sheriff’s office need sufficient notice in order to stop pending wage garnishments and bank levies. This is why you often hear my office say the same thing over and over: “don’t delay!”

If you need to file an emergency bankruptcy case in Sacramento, please call Rick Morin at (916) 333-2222.

January 12, 2014/by Attorney Rick Morin

Bankruptcy Law, Bankruptcy Rules, Chapter 7 Bankruptcy

Spousal Waiver in Bankruptcy: What You Need to Know

The audience for this blog post is very specific: Chapter 7 filers in California that are married, but filing bankruptcy without their spouse. If you match this criteria, you need to know about the Spousal Waiver.

A married couple may file bankruptcy together. Both spouses are listed on the Bankruptcy Petition and are both given a discharge at the end of the case. However, spouses are not required to file bankruptcy together. One spouse may file bankruptcy on his or her own. In such a case, the non-filing spouse stays out of bankruptcy.

A spouse using California’s 703 set of exemptions will need to secure the non-filing spouse’s signature on a Spousal Waiver. This is because of specific language in California Law that limits a married couple to using one set of exemptions.

Specifically, the waiver prevents the non-filing spouse from utilizing California’s 704 exemptions while the other spouse’s case is using the 703 exemptions. That’s it. California law is set up this way to prevent a married couple from filing two separate bankruptcies and utilizing both sets of exemptions. This “best of both worlds” approach is not what the Legislature intended when it created the two distinct sets of exemptions.

Typically, getting the non-filing spouse to sign the Spousal Waiver is not difficult. However, it can be a challenge when the two spouses are not getting along. The non-filing spouse needs to be concerned about signing the waiver only if he or she is contemplating filing his or her own bankruptcy case while the other case is still active.

Update: want to know what happens when a spouse won’t sign? Click here for my updated blog post.

The Bankruptcy Court in Sacramento has a PDF Spousal Waiver for download. You can download the waiver form here. The waiver should be filed with the Court and also provided to your Bankruptcy Trustee.

If you have questions regarding the Spousal Waiver in Chapter 7 bankruptcy, please contact Sacramento Bankruptcy Attorney Rick Morin at (916) 333-2222.

January 3, 2014/by Attorney Rick Morin

Bankruptcy Rules

Filing Certification of Post-Petition Financial Management Course

Every person that files for Chapter 7 or Chapter 13 bankruptcy is required to complete a post-petition personal financial management course. The course is about two hours long. Debtors typically take this course online. At my Bankruptcy Law Firm in Sacramento, there is no charge to take this post-petition course online.

Once you complete the course, the course provider will send my office a certificate of completion. You are then required to fill out Federal Bankruptcy Form B-23. This form certifies that you personally completed the course. I then file both documents with the Bankruptcy Court. This notifies the Bankruptcy Court that you have completed the requirement.

If a debtor does not take the course and file the appropriate certification forms with the Bankruptcy Court, the Court can dismiss the case. The Bankruptcy Court can even deny the debtor’s bankruptcy discharge. As you can see, it is important to complete this requirement within the time limits.

Starting December 1, bankruptcy rules will streamline this process.

Amended Federal Rule of Bankruptcy Procedure P. 1007(b)(7) will give an individual debtor the option of having an approved personal financial management course provider notify the court directly that the debtor has completed the course. If the course provider files the certification with the Bankruptcy Court, the debtor and the debtor’s attorney will not be required to take any additional action.

However, if the course provider does not file the certificate, the debtor and the debtor’s attorney will still be required to file the certificate with the Bankruptcy Court.

This new procedure will save time and money for both debtors and their attorneys. Having the course providers file the certificates will save an extra step that we currently have to go through for each and every case.

If you have any questions about bankruptcy procedures, please call Sacramento Bankruptcy Lawyer Rick Morin at (916) 333-2222.

November 25, 2013/by Attorney Rick Morin