Bankruptcy Info Sheets --- What You Need to Know

Filing bankruptcy is a serious matter and has long-lasting consequences. We will not file a bankruptcy petition for a client unless and until we are sure that the client understands certain important aspects of bankruptcy law.

We would like to share with you some of the information sheets which we give to our clients to take home and read. The information contained therein is current as of August 2012. Of course, laws can and do change, and rules are subject to exceptions, but the following documents will help you gain a basic knowledge of some essential bankruptcy concepts.

Please Feel Free to Download, Save, and Print Our Copyrighted PDF Forms for Your Personal, Non-Commercial Use

Will You Keep Your House If You File Chapter 7 Bankruptcy?
Most people do, but it's not automatic.
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Will You Keep Your House in Chapter 7.pd[...]
Adobe Acrobat document [59.4 KB]
If You File a Chapter 13, Will You Keep Your House ?
For most people, saving their home is the main reason for filing Chapter 13.
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Will You Keep Your House in Chapter 13.p[...]
Adobe Acrobat document [60.2 KB]
Will You Keep Your Car, Truck, or Other Motor Vehicles If You File Chapter 7?
It depends on several factors.
Will You Keep Your Car, Truck, or Other [...]
Adobe Acrobat document [35.1 KB]
Can You Pick and Choose What Debts You Include and What You Leave Off?
Answer: Yes, No, and Maybe.
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Can You Pick and Choose Which Debts You [...]
Adobe Acrobat document [26.8 KB]
Important Information About Secured Debt
Mortgages, purchase-money liens, collateralized loans, recorded judgments, and other nasty surprises
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Important Information About Secured Debt[...]
Adobe Acrobat document [30.4 KB]
What You Should Know About Liens on Your Property
Mortgages and liens survive bankruptcy and must be paid or satisfied if you want to keep the property.
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What You Should Know About Liens on Your[...]
Adobe Acrobat document [59.5 KB]
What You Don't Know Can Hurt You
Why you should review the public mortgage records and indexes of lawsuits, and why you should order your three major credit bureau reports
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Important Information About Unknown Laws[...]
Adobe Acrobat document [26.7 KB]
Do You Pass the Median Income and the Means Test?
Not everyone is allowed to file Chapter 7 under the new law.
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What You Should Know About Median Income[...]
Adobe Acrobat document [31.6 KB]
What You Should Know About Co-signed Debt and Co-signers
Read this info sheet if you co-signed a debt for a friend or relative, or if they co-signed a debt for you.
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Important Information About Cosigned Deb[...]
Adobe Acrobat document [30.2 KB]
Important Information About Personal Injury Lawsuits and Insurance Claims
If you have a pending insurance claim or personal injury lawsuit, you must take special precautions to keep from losing it.
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Important Information About Personal Inj[...]
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Important Information About Foreclosure Sales and Bankruptcy Timing
If you're facing foreclosure, or if foreclosure has already been filed, you need the help of an experienced bankruptcy attorney.
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Important Information About Bankruptcy a[...]
Adobe Acrobat document [27.6 KB]
Information about Bankruptcy and Taxes
Most taxes have to be paid, but some income taxes can be eliminated in bankruptcy. Timing is critical.
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Information About Bankruptcy and Taxes.p[...]
Adobe Acrobat document [31.6 KB]
Student Loans and Bankruptcy
Most student loans must be repaid, but Chapter 13 can usually force the lender to defer payments during the term of the plan.
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Information About Student Loans.pdf
Adobe Acrobat document [29.3 KB]
Inheritances, Unopened Successions, and Dying Relatives
Traps abound for the inexperienced and unwary.
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Important Information About Inheritances[...]
Adobe Acrobat document [27.8 KB]
Why It's a Good Idea to Get an Appraisal of Your Real Estate
You don't want to be caught by surprise.
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Why You Should Get an Appraisal of Your [...]
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What Bills Should You Continue to Pay?
If you want to keep property, you have to pay for it.
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What Bills Should You Continue to Pay.pd[...]
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Watch Out For Preferential Payments and Gifts to Friends and Relatives.
The trustee may be able to take them back.
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Watch Out for Preferential Payments and [...]
Adobe Acrobat document [26.6 KB]

Call Us 504 309-3304 for a Free Initial Consultation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question:

Can You Pick and Choose
the Bills You Pay and the Property You Keep?

 

Answer:

Yes, No, and Maybe.

Yes, you can voluntarily pay any or all of your bills, even though you file Chapter 7 bankruptcy. A bankruptcy discharge prevents most of your creditors from collecting their debts from your post-bankruptcy earnings and /or your subsequently acquired property; it does not prevent you from paying the debts if you choose to do so for moral, religious, or other reasons.

No, you cannot pick and choose which creditors you list in your bankruptcy papers. You must list each and every one of them, even the ones to family and friends, and even the ones you intend to pay (such as the mortgages on your house and the loans on your car or truck).

Maybe the trustee will try to take your property, and maybe he will let you keep it. There's no guarantee as to what a trustee will try to do in a specific case, but the general rule is that the trustee will NOT try to take your property if it is exempt under the law, if it is encumbered in excess of value, or if administering the property would be a burden to the bankruptcy estate.

But even if the trustee does not take your property, that does not mean that you will be able to keep it. A creditor might be able to take your property if the property has a lien on it or if you put it up as collateral. In such a case, if a "consumer debt" is involved, you will either have to 1) surrender the property to the creditor or 2) redeem the property from the lien by paying the creditor the cash value of the property or 3) reaffirm (re-sign) the debt . You cannot reaffirm a debt unless the creditor is willing to continue to maintain a business relationship with you, i.e., you cannot force a creditor to allow you to reaffirm a debt.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

IMPORTANT INFORMATION ABOUT SECURED DEBT

A debt is “secured” if any of the following apply:

1)         You have given the creditor a security interest (for example, a mortgage) in your property; or,

2)         One of your creditors obtains and files a money judgment against you in the Office of the Clerk of Court or Recorder of Mortgages; or,

3)         You purchased something and have not paid the full purchase price for it; or,

4)         One of your creditors is given a lien by operation of law (for example, the I.R.S., the state, and the parish for taxes, or a building contractor or materialman for unpaid construction work or supplies, or a laborer for unpaid wages, to name just a few, or a bank or credit union for the amount of a loan).

Special consideration must be given to secured debt because valid, perfected liens survive your bankruptcy unless they are canceled or avoided. What this means in layman’s terms is that if you want to keep your house or motor vehicle or any other property that is encumber by a valid lien, you will usually have to pay off the mortgage or lien unless the law allows you to redeem the property from the lien by paying the creditor its fair market value or unless you take additional steps at additional cost and expense to cancel the lien.

The most common kinds of secured debt are:

1)                  Real estate mortgages and home equity loans and lines of credit;

2)                  Motor vehicle liens on cars, trucks, mobile homes, vacation homes, campers, ATVs, boats, jet skis;

3)                  Any loan from a bank or credit union (always secured by your checking and other accounts), even if it’s called a “signature loan”;

4)                  Unpaid purchase price liens for big ticket items, such as home improvements, swimming pools, hot tubs, satellite dishes, furniture, and major appliances (if you owe money to a creditor such as Home Depot or Lowe’s or Rooms-to-Go or A-1 Appliances or Best Buy, they will probably try to claim that they have a secured debt); and,

5)                  Recorded money judgments and tax liens.

IF YOU HAVE ANY QUESTIONS
ASK YOUR ATTORNEY.

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

What You Should Know About Liens,
And How They Can Hurt You

Q.         Might I lose my property in a Chapter 7 if there is a lien on it?

A.         Yes; if the lienholder wants the property, you must surrender it unless you either reaffirm the debt or redeem the property from the lien.

Q.         Just what are liens?

A.         The Bankruptcy Code defines a lien as "a charge against or an interest in property to secure payment of a debt or performance of an obligation." In layman's terms, this means that a creditor who has a lien on your property has the right to have the property seized by the sheriff and sold at public auction if you default on your obligation to the creditor.

Q.         How do I know if a creditor has a lien on my property?

A.         A creditor can obtain a lien on your property if you give him one, such as when you borrow money from a bank or finance company and put up property you already own as collateral for the debt.

            In some cases, the law gives a creditor a lien on your property without you doing anything. For example, if a creditor obtains a court judgment against you and records it in the mortgage office, it becomes a lien on any real estate you might own in that parish. These liens survive bankruptcy and could cause you problems when you try to sell your house. The cost of removing these liens is not included in your basic bankruptcy fee.

            In other cases, the law gives a creditor a lien on your property without the creditor having to do anything. The most common example is a vendor's lien (also called a "purchase-money security interest"). If you purchase something on credit and don't pay the seller the entire purchase price, the unpaid seller can have the sheriff repossess it. If you finance a sale of property through a bank or loan company, and don't pay the bank or loan company in full, the bank or loan company can in some cases have the sheriff repossess the property.

Q.         What should I do if a creditor has a lien on my property?

A.         First, tell your attorney so that the debt can be properly listed in your bankruptcy papers. Second, decide on whether you need or want the property badly enough to either reaffirm the debt or redeem the property from the lien.

Q.         How do I reaffirm or redeem?

A.         Reaffirmation and redemption can be complicated. Ask us for more details.

 

IF YOU HAVE ANY QUESTIONS
ASK YOUR ATTORNEY.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

________________________________________________________________


WILL YOU KEEP YOUR HOUSE
AND OTHER REAL ESTATE IF YOU FILE A CHAPTER 7?

1.         The only way that you can be sure that you will keep your house or other real estate when you file a Chapter 7 bankruptcy is if ALL of the following apply:

a)   Your home qualifies as your bona fide homestead on the date you file for bankruptcy; and

b)   You are completely up-to-date on all your monthly mortgage and escrow payments; and,

c)   You keep up all of your monthly mortgage payments after you file; and,

d)   Your house has less than $35,000.00 of equity; and,

e)   Your mortgage holder allows you to reaffirm the debt; and,

f)    You file a Motion to Reaffirm before the date of your discharge; and,

g)   The bankruptcy court judge approves your proposed reaffirmation of the debt; and,

h)   You make all future monthly payments required by the reaffirmation agreement on time,
including principal, interest, taxes, and insurance.

2.         If you have any doubt whatsoever about the value of your house, you should have it professionally appraised before you file bankruptcy. The court does not have to accept your appraisal, but it usually will if the appraisal is done by a reputable, independent fee appraiser.

3.         In cases where there is more than $35,000 of equity in your house, your Bankruptcy Trustee will usually allow you to "purchase" the equity from the estate, instead of selling the house or car on the open market. Usually you are given several months to come up with the funds.

4.         In the situation described above, if you don't have or can't raise the necessary funds to purchase your equity, you may be able to save your house by converting your case to a Chapter 13.

5.         If you own, or are buying, or have inherited, or have been given any interest in any land or real estate in Louisiana or in any other state or country, WE STRONGLY RECOMMEND that you obtain a formal real estate appraisal or at least a Broker’s Price Opinion (BPO) through a professional of your choice before filing bankruptcy or Chapter 13 if there is any possibility that: a) you might have more than $35,000 of equity in your home, or b) you might have any equity at all in any other real estate. You are legally responsible under the law for accurately listing AND placing an accurate value on all your property.

6.         We will generally NOT approve reaffirmation agreements on your home or other real estate, especially if an adjustable rate mortgage or balloon payment is involved. We believe that a court hearing should be required in all home reaffirmation cases, and that the judge should decide whether reaffirmation is in your best interest.

 

 

Don't take any chances.
If in doubt, ask your attorney before you file.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

WILL YOU KEEP YOUR HOUSE
IF YOU FILE A CHAPTER 13?

Read this page carefully and find out.

1.         As a general rule, you keep all of your property when you file a Chapter 13, but every rule is subject to qualifications and exceptions.

2.         You can never reduce the amount of your monthly notes on a mortgage secured only by your family home, even in a Chapter 13 Plan, unless your mortgage holder agrees to a reduction, and this almost never happens, or unless the value of your house is so low that the mortgage is considered completely unsecured.

3.         If you are up-to-date on your mortgage when you file your Chapter 13, the only way that you can be sure that you will keep your house is if you continue to make all future monthly mortgage and escrow payments on time directly to your mortgage holder, AND you make all payments due under your Chapter 13 Plan directly to the Trustee, AND you pay all taxes and insurance that become due.

4.         If you are behind on your mortgage when you file your Chapter 13, the only way that you can be sure that you will keep your house is if you immediately start making future monthly mortgage payments on time directly to your mortgage holder AND you make all payments due under your Chapter 13 Plan directly to the Trustee.

5.         Here’s an example of what we mean:

                  If you have a first mortgage with installments of $1,200.00 per month including escrow, and a second mortgage with installments of $300.00 per month, and your Chapter 13 Plan calls for you to pay the court $600.00 per month, then you must pay a total of $1,200 + $300 + $600 per month ($2,100 total) in order to keep your house. You must also pay all taxes and insurance on the property.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

WILL YOU KEEP YOUR CAR, TRUCK,
OR OTHER MOTOR VEHICLE
IF YOU FILE A CHAPTER 7?

Read this page carefully and find out.

 

1.         If you have an outstanding loan for which the vehicle is collateral, you must be up to date on all of your payments and your lender must allow you to reaffirm the debt. Your lender has the right to require you to turn over the vehicle when you file Chapter 7 unless you redeem the vehicle from the lien by paying the lender its present value.

2.         If you have any other lien on your vehicle (such as a recorded judgment or a tax lien), that lien may survive the bankruptcy and the creditor may be able to seize your vehicle.

3.         As a general rule, your Chapter 7 Bankruptcy Trustee will not take your vehicle if any of the following circumstances apply:

a)   The equity in the vehicle qualifies for an exemption; or,

b)   There is no equity in the vehicle because you owe more on it than it is worth; or

c)   It is burdensome to the estate (for example, the cost of storing, insuring, and selling it would be more than your Bankruptcy Trustee would net from the sale).

4.         You may only exempt one vehicle, and then only the first $7,500 in equity value.

5.         The fact that you must have a vehicle to get to and from work is not sufficient to qualify it as exempt. Owning a car or truck must usually be a requirement of your job (e.g., traveling salesman, pizza delivery man, home health care worker, etc.), or you must need a vehicle to transport your tools, equipment, or materials. You may be required to give the court an affidavit from your employer that having a car is a condition of employment, and you might have produce your tax returns showing that you take a business deduction for the use of your vehicle or that you are paid mileage by your employer.

6.         Even though your vehicle is paid for in full, you will not be allowed to keep it unless it is exempt due to the requirements of your job or unless it has little or no resale value. If the non-exempt equity in your vehicle is worth more than $7,500.00, your Bankruptcy Trustee will usually want to sell it.

7.         In cases where there is more than $7,500.00 of equity in your motor vehicle, your Bankruptcy Trustee will usually allow you to "purchase" the equity from the estate, instead of selling the vehicle on the open market. Usually (but not always) you are given several months to come up with the funds.

8.         If the total of all of your non-exempt assets is more than $1,500.00, your Bankruptcy Trustee might sell all of the assets, including your non-exempt vehicles.

Example:     You have a two non-exempt vehicles, each worth $750.00. The Bankruptcy Trustee might try to sell them both because together they would bring in at least $1,500.00.

9.         In the situation described above, if you don't have or can't raise the necessary funds to purchase your equity, you may be able to save vehicle by converting your case to a Chapter 13.

Don't take any chances.
If in doubt, ask your attorney before you file.

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

 


IMPORTANT INFORMATION ABOUT JOINT DEBT,
JOINT AND SEVERAL DEBT,
AND CO-SIGNED DEBT

A debt is “joint” if it is incurred by two or more people. A debt is “joint and several” if it is incurred by two or more people and each person is responsible for paying the entire debt. Almost all contractual joint debt is actually “joint and several” debt. You might be liable for debts that you aren’t even aware of.

The most common example is credit card debt when the card is in both spouses’ names and when both spouses have signed the original credit card application (not the same thing as an “Authorized User). When spouses get divorced, all joint credit cards should be cancelled and reissued, or you might find yourself liable for the debts your ex-husband or ex-wife incurred on the card years after your divorce.

“Co-signed” debt is debt that is guaranteed by someone else, usually a friend or a relative who doesn’t fully realize that co-signed debt has all of the legal consequences of borrowing the money with none of the benefits. Most lenders require that business debt be co-signed. If the borrower doesn’t pay, the lender goes after the co-signer for the full amount. Co-signed debt is generally listed as “contingent” because the lender doesn’t usually look to the co-signer for payment unless and until the primary debtor stops making payments or files for bankruptcy.

It is important that you list all joint debt and all co-signed debt
on your bankruptcy schedules.

1)         If you have any joint debts with other people, you must list their names and addresses.

2)         If someone has co-signed a debt for you, you must list their names and addresses.

3)         If you have co-signed a debt for someone else, you must list the name and address of the primary creditor and the amount of the debt, as well as the names and addresses of all other co-signers and joint debtors who might be liable for the debt with you.

 

If your have any questions,
ask your attorney.

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 


Filing bankruptcy
DOES NOT
automatically eliminate your past-due income tax liability.

You will definitely have to pay the following taxes, and interest thereon, unless excused or abated under non-bankruptcy law:

A)         Income taxes that became due within the past three years. Note: income taxes for the year 2009 do not become due until April 15, 2010 at the earliest, or until August 15, 2010 if you obtain an automatic extension, or until October 15, 2010 or later if you get an extension for cause.

B)         Income taxes for which a return was not actually signed and filed more than two years ago.

C)         Withholding taxes ("trust fund" taxes due on a 941 return), no matter how old.

D)         Income taxes for any year, no matter how long ago, for which a required tax return was not actually signed and filed by you. Note: if the IRS filed a Substitute For Return for you, the law considers that no return was filed by you.

E)         Income taxes for any year, no matter how long ago, for which you filed a fraudulent tax return. Note: if you greatly understated or under-reported your actual income on a tax return, the IRS might consider that return to be fraudulent.

F)         Taxes that were assessed within the last 240 days, or which are assessable on the date of your bankruptcy.

G)         Certain other taxes. Ask us for details.

You will not have to pay income taxes for the years in which all of the following conditions apply:

A)         The tax return was due, with extensions, more than three years ago; and,

B)         You filed the return on time; and,

C)         The return was accurate and complete; and,

D)         There were no offers in compromise made and none are pending or expired; and,

E)         You receive a discharge in your bankruptcy case.

 

 

Tax liens are different from tax liability.
Filing bankruptcy
does not automatically eliminate your tax LIENS either.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 



Filing bankruptcy
DOES NOT
automatically eliminate your student loans?

 

You will definitely have to repay your student loan(s), and any student loans that you co-signed for someone else, if:

A)         You do not qualify for and obtain a hardship exception (very difficult and almost impossible to do); and,

B)                  You have no non-bankruptcy defenses to repayment.

 

Unless we advise you in writing
that your student loan is dischargeable,
you should assume that you will have to repay it.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

Important InformationAbout
Inheritances

 

You may be entitled to inherit property and not know it. In Louisiana, if a person dies without a will, his estate goes to his children. What this means is that if either or both of your parents are deceased, you may have an interest in their estates that could be taken by the bankruptcy court. For example:

Suppose your father died fifteen years ago without leaving a will. At the time he died, he and your mother had just purchased a house in Louisiana. For the last fifteen years your mother has lived in the house and made all the mortgage payments, and now the mortgage is almost paid in full. You have one brother and one sister. Your father’s succession has never been opened.

Whether you realize it or not, you own one-sixth of what you consider to be your mother’s house. The bankruptcy trustee can take any property that you own that is not exempt. If your interest in your mother’s house is not exempt, the trustee can take and sell your one-sixth interest in your mother’s house for whatever it will bring at a public sale. If your mother has remarried, the trustee in some cases may be able to make her move out of her house.

The situation is just as bad if you don’t file bankruptcy and if one of your creditors obtains a judgment against you and finds out about your interest in your father’s succession. A judgment creditor can seize any property that you own that is not exempt, just like the trustee can.

Even if you don’t have an interest in a succession now, if you acquire an interest within 180 days of filing bankruptcy, that interest belongs to the trustee. Another example:

Your father has a serious heart condition, or a terminal illness, or is very elderly. He dies without a will five and one-half months after you file bankruptcy.

Even though your bankruptcy case may be closed and completed, any inheritance that you acquire within 180 days after you file bankruptcy belongs to the trustee.

 

If YOU THINK YOU MIGHT BE ENTITLED TO INHERIT ANY PROPERTY, NOW OR LATER,
TELL US ABOUT IT NOW,
BEFORE YOU FILE BANKRUPTCY.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

Important Information About Personal Injury and Insurance Claims,
Pending Lawsuits, And All Other Legal Claims and Causes of Action

If you have been injured, and the other party was at fault or is otherwise legally liable for your damages, that claim will become the property of your bankruptcy estate and you may lose control over the right to settle it or to collect the proceeds of your lawsuit against the wrongdoers.

Even if you have not yet filed a lawsuit, the right to bring a lawsuit and any pre-petition cause of action for damages belongs to your bankruptcy trustee.

The same is true for insurance claims for bodily injury and even property damage.

All personal injury and insurance claims, pending lawsuits, and other causes of action must be listed and your bankruptcy papers.

 

If YOU THINK YOU MIGHT HAVE A PERSONAL INJURY CLAIM, OR ANY INSURANCE CLAIM,
OR IF YOU HAVE A PENDING LAWSUIT
AGAINST ANYONE FOR ANYTHING,
TELL US ABOUT IT NOW,
BEFORE YOU FILE BANKRUPTCY.

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 


UNKNOWN LAWSUITS, CLAIMS, AND LIENS

Our office does not check all the public records to determine whether there are any lawsuits pending against you, or whether there are recorded money judgments, property liens, or UCC financing statements standing in your name, unless special written arrangements are made in advance and unless an additional fee is paid for this service.

What you don’t know about a pending lawsuit or lien can hurt you.

Most people do not have any lawsuits pending, or any judgments, liens, or UCC filings recorded against them. But the only way to know for sure is to physically check the public records at all of the courthouses in all of the parishes where you have lived, owned property, or entered into contracts.

You may check the records yourself at no charge by going to the various courthouses where a lawsuit may have been filed against you.

 



Filing bankruptcy does not remove recorded money judgments, liens, or UCC filings from the public record.


The cost of checking the public records and/or removing any money judgments, liens, or UCC filings from the public records is not included in your basic bankruptcy retainer.


If you own property which is encumbered by a recorded judgment, lien, or UCC filing, you may have to pay additional fees and expenses to obtain a clear your title to your property.


 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

Important Information
About
Bankruptcy and Foreclosure Sales

 

If you have a mortgage that has been or is about to be foreclosed, you have an important decision to make regarding when you should file bankruptcy.

 

Filing bankruptcy usually stops foreclosure sales, at least temporarily, unless you are a what is called a “repeat filer.” Sometimes this is what you want to do; other times it is better to get the sale over with and move on with your life. This is a decision that only you can make, and it is important that you give serious thought to the consequences.

 

If the property is your family home, and if you don’t have moving money or a place to go, filing bankruptcy after the foreclosure lawsuit and been filed and before the sale date will get you additional time, usually at least four to six months, sometimes longer.

 

On the other hand, if you’re ready and able to move, you might want to delay filing bankruptcy until after the property has been sold at the sheriff’s sale. Why? Because filing bankruptcy does not get the property out of your name, and as long as you are the record owner and title to the property remains in your name, you may incur additional financial obligations and duties.

 

The owner of the property is responsible under the Louisiana Civil Code for damages caused by the property’s disrepair and neglect. If the mailman falls on your sidewalk and breaks a leg, he will probably sue you and it would not be covered by your bankruptcy. Bankruptcy only covers debts that are in existence on the date you file; any debts or expenses that you incur after filing are your responsibility.

 

Another problem with filing bankruptcy while property is still in your name is that you may also be liable under parish or city ordinances for keeping the grass cut and the property boarded up and maintained. You might find yourself subject to fines or penalties. You may also get bills for state and local property taxes.

 

Think twice about the consequences of filing bankruptcy before a foreclosure sale. Sometimes it’s better to wait until the property is no longer in your name.

 

Only you can make the decision on when to file.
Filing too soon or too late
has consequences.

 

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

IMPORTANT NOTICE
ABOUT THE VALUE OF YOUR HOME


If you own, or are buying, or have inherited, or have been given
any interest in any land or real estate in Louisiana or in any other state,

WE STRONGLY RECOMMEND

that you obtain a formal real estate appraisal
or at least a Broker’s Price Opinion (BPO)
through a professional of your choice
before filing Chapter 7 bankruptcy
if there is any possibility that:

1. you might have more than $35,000 of equity in your home,
or
2. you might have any equity at all in any other real estate.

-----------------------------

If you are filing a Chapter 13 case
the Trustee now requires a recent BPO or appraisal
(one obtained within the past three years).



You are legally responsible under the law
for accurately listing AND placing an accurate value
on all your property.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 


WHAT YOU SHOULD KNOW ABOUT
THE MEDIAN INCOME AND MEANS TESTS

An Important Note About the New Bankruptcy Law. Whether or not you qualify for a Chapter 7 bankruptcy or a three-year Chapter 13 Plan under the new bankruptcy law depends on your “annualized current monthly income.” The law does not consider what you are currently earning, or what you will earn next month, or your last twelve months earnings, or even what you reported on your tax return last year. Instead, qualification is based on the pre-tax gross income you received (not earned) from all sources during the six months prior to the date you file your bankruptcy petition; your income for the month in which you actually file is not counted.

Why This Is Important. It is important because you may qualify in one month but not in the next. You may lose your right to file a Chapter 7 or a three-year Chapter 13 Plan by not filing your case promptly or by filing too soon.

Examples. Here are a few examples.

1)         Suppose you’re paid bi-weekly. Even though you receive exactly the same pay every check, there are some months that you get three paychecks instead of two. In a close case, this might make your income appear to be greater than it actually is.

2)         You may get unexpected overtime, or a bonus, or a pay raise that will exceed your six-month average and disqualify you from doing a Chapter 7 or three-year Chapter 13. Or you may take on a second job or start receiving pension or disability benefits that will raise your income.

3)         On the other hand, if you have just lost your job or had a significant pay reduction, waiting a month or more while your income is reduced may enable you to qualify for a Chapter 7 or three-year Chapter 13.

 

It is important that you understand that just because you or do not qualify this month does not mean that you will or will not qualify next month.

 

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

WHAT BILLS SHOULD YOU CONTINUE TO PAY?

 

As a general rule ( and there are exceptions to every rule), you should continue to make the following payments even though you intend to file bankruptcy:

 

        House note (including second and third mortgages, if any), if you want to avoid repossession.

         Mobile home payments, if you want to avoid repossession.

         Rent on your house or apartment, if you want to stay.

         Car payments on any vehicle that you want to keep.

         Insurance premiums on your house and car.

         Electricity, gas, water, phone.

         Student loans and/or current tuition, if any.

         Doctor bills for any doctor you want to continue seeing.

         Taxes.

         Alimony and child support, if applicable.

         Any debts secured by property that you want to keep.


WHAT ELSE SHOULD I ESPECIALLY REMEMBER?

 

You may have to turn over your bank and checking accounts to the trustee.

 

You may lose all or a large part of your income tax refund.

 

You may have to turn over any money or property you get from a personal injury lawsuit or inheritance to the trustee.

 

You may have to reaffirm a debt if you want to keep the collateral.

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

 

 

 

DID YOU PAY BACK ANY LOANS OR DEBTS,
OR MAKE ANY GIFTS, TO ANY OF YOUR FAMILY MEMBERS, FRIENDS,
OR BUSINESS ASSOCIATES WITHIN THE PAST YEAR?

 

You must disclose all payments made to people who the bankruptcy code calls “insiders.” Insiders include your parents, children, in-laws, grandparents, aunts, uncles, cousins, and basically every relative that you are close to.

 

If within the past year you gave money or anything else of value, paid back all or part of what you owe, to a relative or other insider, you must advise the court and the trustee may be able to get the money back from the person you paid it to. Needless to say, this can be an unpleasant surprise.

 

Tell us about these payments before we file, and be sure to list them on your Statement of Financial Affairs.

 

 

© 2012 William G. Cherbonnier Attorney at Law, LLC New Orleans 504 309-3304
All Rights Reserved – May Not Be Reprinted or Reproduced Without Permission

 

About Our Law Firm

We are a private, for-profit law firm located the metropolitan New Orleans area.  The name of our firm is William G. Cherbonnier Attorney at Law LLC.  We have two convenient offices, one on the Eastbank on Causeway Boulevard in Metairie close to Lakeside Shopping Center, and the other on the Westbank in Gretna about a mile off the Expressway.

Who We Are

We are consumer defense attorneys.  We represent individuals and small businesses who have be sued by banks, mortgage servicers, credit unions, debt buyers, finance companies, payday loan companies, and other lenders.  We represent consumers only, and never the businesses who sue consumers.

Our Philosophy

We believe that no one should try to represent himself in a debt collection or foreclosure lawsuit, and we produced this website to try to explain the lawsuit process and help Louisiana consumers find a lawyer that will represent them for a fair and reasonable price (or for free if they qualify for legal assistance).

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