Chapter 7 Bankruptcy – Page 12 – Law Office of Rick Morin, PC

Don’t Let Creditors Harass You After Bankruptcy

Bankruptcy law is clear: once your debts are discharged in bankruptcy, no one can legally collect the money from you. However, some unscrupulous creditors will still demand that you pay debts that have been discharged in bankruptcy. There is no reason to put up with this type behavior.

This article from the New York Times shows just what can happen. Bank of America, one of the largest banks in the world, harassed a debtor even after a bankruptcy judge ordered the bank to stop contacting the borrower. It took a contempt order from the judge and $10,000 in fines per month to get the bank’s attention.

Unlike a lot of other bankruptcy law firms, I will aggressively pursue creditors who violate bankruptcy laws. I always tell my clients that they should contact my office immediately if a creditor contacts them during their bankruptcy case. Even after their bankruptcy case is over, I encourage my clients to get in touch if someone demands payment from a discharged debt.

In some cases, I can go to court and ask for civil damages from a creditor that violates bankruptcy laws. I see this is an effective way to get the attention of creditors. And maybe even get you some damages from your creditors! We are all required to comply with the law, even large banks and credit card companies. There is no reason to put up with harassment after your bankruptcy is over!

Here is what you do if you are contacted by creditors or bill collectors after your bankruptcy case is over:

1. Make sure you find out who is contacting you. Ask for their name, who they represent, and their address / phone number.

2. Contact your Bankruptcy Attorney.

3. If the creditor continues to contact you, keep a good log of each contact. The more they call you, the more that they are in trouble.

If you are being harassed by creditors after your bankruptcy case is over, contact Sacramento Bankruptcy Attorney Rick Morin. I can be reached at (916) 333-2222.

September 29, 2013/by Attorney Rick Morin

Chapter 7 Bankruptcy

Life Insurance Payments and Bankruptcy

The general rule is that once a person has filed for bankruptcy, no one is allowed to take the debtor’s money or property for any reason. This allows a person breathing room and time to sort out their finances. However, there is an important exception for a debtor with a life insurance contract.

11 U.S.C. 542(d) states the following:

(d) A life insurance company may transfer property of the estate or property of the debtor to such company in good faith, with the same effect with respect to such company as if the case under this title concerning the debtor had not been commenced, if such transfer is to pay a premium or to carry out a nonforfeiture insurance option, and is required to be made automatically, under a life insurance contract with such company that was entered into before the date of the filing of the petition and that is property of the estate.

That long paragraph essentially says that a life insurance company is allowed to take money from a debtor in his or her bankruptcy. This even though almost everyone else is not allowed to take any of the debtor’s money.

The reason why 542(d) exists is that Congress recognizes that life insurance is an important part of life. The failure to make required payments on a life insurance policy is always grounds to terminate the policy. Thus, there is a carve-out that allows a debtor to maintain his or her life insurance policy through the bankruptcy case.

If you have an active life insurance policy, it is important that you tell your bankruptcy lawyer. It is also a good idea to make contact with your insurance representative or insurance company to make sure they continue to debit your account. After all, you don’t want to lose your important life insurance policy.

If you have questions about life insurance and Chapter 7 Bankruptcy, you can call Sacramento Bankruptcy Lawyer Rick Morin at (916) 333-2222.

September 15, 2013/by Attorney Rick Morin

Chapter 7 Bankruptcy

Bankruptcy Terminology

Bankruptcy is foreign to most people, but it doesn’t have to be confusing. Below are common bankruptcy words and phrases that you will hear around the Bankruptcy Court in Sacramento.

Bankruptcy lawyers aren’t the only people that need to understand the lingo. As a debtor, you also need to know what is happening with your bankruptcy case. So study up!

Debtor

This is the most important word because you are the debtor! Another word for debtor is “borrower,” but “debtor” is the word used commonly in the courts and bankruptcy petitions.

Creditor

Creditor means the person or company that you borrowed money from. In fact, creditor means any person (or entity) that you owe money to. This can include the US Government (because of taxes) or even friends that helped you out in a tough spot.

Discharge

Discharge is what happens after your bankruptcy case is over. The Bankruptcy Court enters a “discharge order” that tells the whole world that they can not legally collect debts from you. Some debts are not dischargeable, so it is important that you discuss all of your debts with your bankruptcy lawyer both before and after your case is over.

Meeting of Creditors

Also known as a “341 hearing,” the meeting of creditors is an opportunity for the Bankruptcy Trustee and your creditors to question you under oath. You will typically be asked basic questions about your bankruptcy petition. The meeting of creditors will only last about 5-10 minutes.

Bankruptcy Trustee

A Bankruptcy Trustee is a third party (sometimes a lawyer) that is randomly assigned to oversee your bankruptcy case. In most consumer Chapter 7 bankruptcies, the Trustees will review your paperwork and conduct the Meeting of Creditors. In more complex cases, the Trustee will collect and liquidate property and distribute money to creditors. There are about 30 Bankruptcy Trustees assigned to the US Bankruptcy Court in Sacramento.

Schedules

The Bankruptcy Schedules are attachments to the main bankruptcy petition. The schedules list various things, such as your homes, people you owe money to, and all of your personal property. It is important to carefully review your Bankruptcy Schedules before they are filed with the court. If things change after your case is filed, your Bankruptcy Lawyer might tell you that your Schedules need to be amended.

Bankruptcy doesn’t need to be confusing or mysterious. Call Sacramento Bankruptcy Lawyer Rick Morin for more information about bankruptcy. I can be reached at (916) 333-2222.

September 1, 2013/by Attorney Rick Morin