Articles Posted in Fresh Start / Clean Slate

That depends on your specific circumstances. It is possible that, because of your particular situation, hiring a debt consolidation company makes more sense than filing for bankruptcy. However, there are several precautions that you should be made aware of before going that route.

To begin with, it is understandable why people would want to look into a debt consolidation company first before anything else. The way in which such services are advertised makes it sound as if it is a simple process in which the company handles all your debt, and gets you into one simple monthly payment (while even getting rid of some of the debt). And because there is a natural aversion to filing for bankruptcy, taking this angle may seem like the more sensible thing to do.

But you should be aware that since the start of our nation’s economic trouble (starting in about 2008), debt consolidation companies have sprung up like mushrooms on the forest floor. It has become a veritable cottage industry overnight, as each such company tries to outdo the other in terms of how much it can do for you (sometimes sounding as if they can perform magic). But as with all things, if it sounds too good to be true, then it probably isn’t.

Not at all. Being gainfully employed and earning a regular salary is not a hindrance to filing a Missouri bankruptcy. Indeed, most people have a job when they file (and in some cases, depending on which chapter of bankruptcy you file, it is quite necessary that you have a job).

To begin with, when you file for bankruptcy, the court requires that you disclose all sources of household income. So if you are married, you will have to include you and your spouses’ last six months’ worth of paystubs or income documentation (even if you are filing individually without your spouse). And if you have received income from other outside sources (such as social security, unemployment benefits, food stamps, rental income, retirement, or business income), those amounts will also need to be disclosed. This may sound like a methodical process (and it is), but it is required information that the court will need to see. Why? Because your household income will largely determine which chapter of bankruptcy you will be eligible to file for. For instance, the government has determined that the average (or median) income for a household of four is: $69,832. If you are a household of hour, and the total household income is less than this amount, you are qualified for a St. Louis Chapter 7 bankruptcy (assuming you have not filed a Chapter 7 within the last eight years).

There are, however, scenarios in which having a job and earning income is essential for a successful bankruptcy. In the event that you have to file a St. Louis Chapter 13 bankruptcy, the court will require that you make a monthly payment to the Trustee (who will then disperse the payment to the creditors that are to be paid back). But if you do not have any sources of income, the possibility of making the required monthly payment is going to be quite difficult (if not impossible).

Yes, you can. But it’s not a good idea. Transferring property to someone else can easily turn into a situation in which the person to whom you transferred will end up owing the Trustee a great deal of money. Let’s look at an example of how this could play out:

You own a 2009 Toyota Prius that is paid in full (i.e. there is no loan against it). The fair market value of the automobile (according to NADA standards) is right around $18,000.00. Which means that the Chapter 7 Trustee would be insanely interested in taking the car, selling it, and using the proceeds to pay off your unsecured creditors (like credit cards, medical bills, payday loans, etc.). Knowing this, you give the car to your mother (by quit claiming the title of the car, so that ownership transfers from you to her). And then you file a St. Louis Chapter 7 bankruptcy. All assets and debts have to be disclosed, but a lot of other information has to be made public as well. For instance, one of the questions that the government will want answered is: “Have you transferred or given away anything to anyone in the year preceding the filing of this bankruptcy?” The question must be answered truthfully (believe me, you do not want to suffer the consequences of being sued by the US Attorney in this district after an FBI investigation), which means that the Trustee will now be made aware of the fact that such a transfer occurred. As a result, the Trustee will request contact information for your mother, and he will make demand from her for the car. How can he do this? Because he has the power to undo a transfer (even one that was legally created by way of a quit claim deed) that occurred within one year preceding the filing of the bankruptcy. This power is available to him because there is an automatic assumption that you made the transfer so as to hide an asset that otherwise would have been available to the Trustee (and will therefore be considered an attempt to defraud your creditors). And hopefully your mother still has the car, because if she has sold it, the Trustee will demand whatever the value of the car was on the date of the sale (which as I mentioned, is close to $18,000).

This same set of facts can be applied to essentially any asset that is transferred. And if the value of the property transferred is high, the more interested the Trustee will become. The St. Louis bankruptcy lawyers at The Bankruptcy Company have the experience and knowledge necessary to make you aware of any outcomes that may result from the decisions you make prior to filing for bankruptcy. Our attorneys are prepared to guide you through the entire process, and get you the fresh start / clean slate that you deserve.

Yes, you can. But it is highly unadvisable. Representing yourself in any legal action (even if you are an attorney) is one of the worst mistakes you can make. Why? Because there are just too many pitfalls into which you can sink, and you won’t even be aware of the reason. There are just too many twists and turns that require an expert’s knowledge and skill. This isn’t to suggest that you haven’t the intelligence to do the type of work that an attorney does. You might a genius. But either you know which forms need to be filed, or you don’t. You either are aware of the deadlines imposed by the courts to have things filed, or you don’t. Unless you have the necessary training and experience, you are risking quite a bit.

For instance, when you file a St. Louis Chapter 7 bankruptcy or a St. Louis Chapter 13 bankruptcy, there are certain schedules that need to be filed with the court. These schedules indicate things like your ownership on real property, personal property, co-debt ownership, leases and/or contracts, monthly income, and monthly expenses. This may seem like a straightforward process of simply filling in the blanks (and to be sure, some of it is), but there are certain things that you almost certainly do not know about that can cause big problems. For example, if after you fill in your income and expenses, there is disposable income left over of greater than $100.00, the US Trustee will surely object to the Chapter 7 by way of a 707(b) challenge. What is a 707(b) challenge? What is an acceptable amount of DMI after Schedules I and J are filed? What is the best way to cure such a discrepancy post-petition? How do you properly response to a 707(b) challenge? All of these are great questions, but unless you have the experience in dealing with Missouri Chapter 7s, you are going to be swimming upstream.

Or if you file a bankruptcy in which you list an asset (like a car) that has a great deal of equity, but do not apply any exemptions to it. And now the Trustee is wanting to take it from you so that he can liquidate it. How do you amend your schedules to include exemptions? Which exemptions are available for such an asset, and for your particular situation? What is the best way to approach the Trustee in terms of a negotiation? Great questions. But my guess is that you wouldn’t have the first clue as to handling any of it.

The answer to this question depends on which chapter of bankruptcy you file. The bankruptcy code makes it clear that there are certain time periods and provisions for every petition that is filed. And if those rules are not followed, it is possible that whatever chapter you ended up filing is dismissed.

In regards to a St. Louis Chapter 7 bankruptcy, the rules are pretty straightforward: The code states clearly that a Missouri Chapter 7 can only be filed every eight years. So long as a full eight years have passed since the last time you filed a Chapter 7 bankruptcy (and all other qualifications are met), then you can file a new Chapter 7. If it is still within the eight year time frame, you can still file for bankruptcy. But your options are at that point limited to a St. Louis Chapter 13 bankruptcy.

Speaking of Missouri Chapter 13 bankruptcy, there are a few rules that need to be understood for this chapter as well. In general, it is possible to file many different Chapter 13s over time. So long as each filing was not done fraudulently, there is really no limit to the number of 13s you can file. However, it should be noted that if the number of bankruptcies filed reaches a high number, the judge and/or Trustee may very well argue that you have abused the system and disallow any further filings until a sufficient period of time has passed.

Simply put, it is the shield of protection that the bankruptcy court surrounds you with after you file for bankruptcy. It stops creditors from coming after you, or calling you, or from trying to collect on your debts. It also prevents any further legal action against you that the creditor might be in the middle of taking. And it provides you with the breathing room you need to get things in order, and begin to move forward with life.

The automatic stay is imposed as soon as a St. Louis Chapter 7 bankruptcy or a St. Louis Chapter 13 bankruptcy is filed. Its provisions also include remedies for an individual if a creditor violates the stay. So for instance, if you file a Missouri bankruptcy, and your creditors are notified of the petition, but they continue to contact you (and collect on the debt), they have violated your federal rights. The remedies for this kind of violation can be severe, including punitive damages (which is basically an award of money to you to compensate the fact that the creditor willing overlooked its duty to comply with the stay).

The automatic stay is specifically important in the context of a Missouri Chapter 13. If you are making monthly payments in a Chapter 13 plan, but you fall behind on certain secured debts (such as your house mortgage), the automatic stay still prevents the creditor from taking any immediate action to foreclose. In essence, it buys the necessary time to get things in order, and make arrangements to come current on the payments.