A lot of things need to be done in a Chapter 13. A lot of paperwork would need to be filed and there would be a lot of different issues in terms of cramming down, reducing car loans, strip-it-off liens and valuing certain things. It would be a lot for somebody to handle all of that at one time, so it would be very important to have an attorney to help out with these issues.
An attorney could also work everything out with the Chapter 13 trustee and make sure the person did not need to waste their time by going to court because most of the issues with a Chapter 13 trustee could be resolved through phone calls if the person knew what they were doing.
Can Someone Attend This Hearing With Their Attorney?
Absolutely. A Chapter 13 is more complicated than a Chapter 7, so the person would definitely need to have a Chapter 7 attorney at a Chapter 13. There are more issues. The person may have car cram downs, they might want to reduce the loan on their car or there might be liens on your car or the house that the person would want to strip off and get rid of.
Another issue would be the amount of payments the person would be making regarding how much they would have to pay every month. This would obviously be an important issue because they would have to pay for up for three to five years, so they would want to make sure the number was as small as possible. It would be better to have an attorney because a Chapter 13 can be a fairly complex case.
Could Someone Make Errors Or Mistakes If They Tried To Do It On Their Own?
The main concern when filing a bankruptcy is that sometimes there are assets that a person would not realize they have. The main one would be tax refunds, and people often get five, six or seven thousand dollar tax refunds which they are entitled to during the course of the year.
Generally, when we start filing cases around September, we start asking people about their tax refund because by September the person would have earned three-fourths of their tax refund even though they would not be getting it for probably six monthsIf someone files in September, then there would be a meeting of creditors in October where they would ask about the kind of tax refund the person would be expecting the following year.
The person would just say, they were expecting to get $6,000. The trustee would confirm the date of filing as September 1st and they would calculate three-fourths of that and would say that they want that money. The person would be surprised because they would not have received that money yet, although it would still be considered an asset that the person had as of the date of filing. It is fairly common for the trustees to ask about it, and someone who was filing on their own might not realize they had that asset coming to them.
The other one is inheritance and people do not realize that if somebody dies within 180 days, six months of filing a bankruptcy, then that money would become part of the bankruptcy estate too. The person would have to be very careful about that and the lawsuits they may have against somebody. If someone had the right to sue somebody, then the trustee would be able to step into their shoes and collect that money, so those are the three most common assets that people do not even realize they have.
Can Someone Consult Their Attorney If They Do Not Know The Answer To A Question?
A person would generally be able to watch a few meetings of creditors before their own, so they would have an idea about the kind of questions that might be asked. I can ask my client if there are any questions they are having a problem with or anything like that when I am sitting with them.
Sometimes, we can go into the hall and figure out what the honest and correct answer would be to a question. The person might sometimes be having trouble interjecting. The trustee attorney is not really supposed to be testifying, because the debtor is supposed to be testifying, although sometimes people get confused. They will ask the person to be on the domestic support obligation whereas people would not know they were actually talking about child support. The attorney can clarify things for them.
In all the years I have been doing this, I have never had a problem if people had already told me things upfront.
What Would You Tell A Client To Expect?
I would remind the person to make sure they had told me about everything, all of their assets, everything they owned and everybody they owed money to before they filed the case because that would make everything much smoother in the long run.
The Chapter 7, 341 meeting of creditors should be very straightforward as long as the person had done that and they should not have any problems. The person should be able to answer every question with either a “yes” or “no” answer or in less than two sentences.
Some Chapter 7 trustees can ask the person why they filed a case, to which the answer could be that the person had lost their job, or their wages were being garnished or whatever the reason was, but they should certainly only give an answer with something they can explain in one or two sentences. It all comes back to telling the attorney as much as they can before they file the case so there are no surprises. There really would not be anything to worry about as long as the person had done that, and there would be able to answer any question simply.
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