What is Bankruptcy?
Bankruptcy is a federal court proceeding that gives debtors immediate relief from their creditors. If your income does not meet your expenses, you may qualify for bankruptcy. Our firm can help to review your income and expenses to determine if you can file. You also must be a resident of Delaware for more than 90 days to file in Delaware . As an individual, you may file under one of two bankruptcy chapters. Chapter 7 is a liquidation plan under which most of your unsecured debts are discharged without repayment to the creditors. Chapter 13 is a reorganization plan. Under Chapter 13, you continue to pay your normally monthly bills, including your mortgage. You then pay an agreed amount to the Trustee, a bankruptcy official, who distributes these funds to pay your creditors. Chapter 13 plans last for three to five years. Our attorneys can help you determine which type of bankruptcy is best for your situation.

BANKRUPTCY GENERAL INFORMATION HANDOUT
Now that you have signed your petition, and it is going to be filed in the Bankruptcy Court, we have prepared this informational handout to answer some of your questions.

COURT DATES
Regardless of the type of petition you file with the Bankruptcy Court, you will be required to appear in Court at least once. All hearings are mandatory and your appearance is required.

Your first hearing (the 341 meeting of Creditors) will be held APPROXIMATELY one month after your petition is filed with the Court. You will receive a notice from the court giving you the date and time to appear in court. This notice may be confusing to you because there are several different dates on it. The first date you come to is the date of your hearing. Approximately one (1) week after you receive your notice from the court, you will receive a letter from our office confirming when your hearing is and giving you directions. If your attorney is unable to attend the hearing, we may have another bankruptcy attorney appear in court with you. If it is necessary to have another attorney attend the hearing, every effort will be made to notify you of this before your hearing. Our staff works together on bankruptcies and we all try to make this experience as easy as possible for you.

The hearing is about twenty (20) minutes in duration and is held before a Trustee who has been appointed by the court to review bankruptcy cases.

IF YOU ARE FILING A CHAPTER 13 PETITION, WITHIN 30 DAYS OF FILING YOUR BANKRUPTCY PETITION. FAILURE TO MAKE THIS PLAN PAYMENT COULD RESULT IN A DISMISSAL OF YOUR BANKRUPTCY.

AT THE HEARING, YOU WILL BE REQUIRED TO BRING 2 OF YOUR MOST RECENT PAYSTUBS, PAYOFFS FOR ALL SECURED MERCHANDISE, PROOF OF INSURANCE ON YOUR VEHICLES AND ANY APPRAISALS THAT MAY BE REQUIRED. IF YOU OWN REAL PROPERTY, OUR OFFICE REQUESTS A TITLE SEARCH AND WE MAY SEND IT TO YOU ONLY TO VERIFY THE INFORMATION. YOU WILL BE REQUESTED TO CORRECT ANY ERRORS IN THE TITLE SEARCH.

Under certain circumstances you may be required to sign a reaffirmation agreement, promising to pay certain debts. We will discuss your options if such an agreement is proposed.

If you have filed a Chapter 13 petition, your second court appearance, the Confirmation Hearing will be held approximately twenty (20) days after the first hearing. If you are required to attend your Confirmation Hearing, we will contact you prior to the hearing. This hearing takes place in the Bankruptcy Court and can last up to two (2) hours, as you may have to wait for other cases before your own. Please note that after your Confirmation Hearing you will receive an Order Confirming Plan within 8 weeks. This document states that your plan has been confirmed by the court for whatever monthly payment will be made to the trustee. Your Order Confirming Plan should become a permanent part of your financial records!!!

Approximately sixty (60) days after your confirmation, you will receive a Motion from the trustee titled “Motion to Allow Claims and Order”. This document is a review of the claims filed. Your attorney will review this document and make sure all of the necessary proofs of claim were filed. Our office will be in contact with you if there is any question regarding a proof of claim. If you review this motion and find an error, please immediately call our office so that we may rectify the situation.

YOU MUST ATTEND ALL OF THE HEARINGS THAT ARE REQUIRED FOR YOUR CASE .

LAWSUITS
If you have been sued and a judgment has been entered against you before the petition is filed, there is a chance that a wage attachment may be served at your place of employment. If this happens, DO NOT PANIC!! You should contact us immediately, obtain copies of the order from your payroll department and bring them to us immediately so that we can stop this attachment. We know it is embarrassing to have the Sheriff come to your place of employment, but sometimes, this is unavoidable.

Wage attachments can only begin after you have been sued and a judgment has been entered against you. If, by the time your bankruptcy petition is filed, the wage attachment has already been issued and is in the hands of the Sheriff's Department to serve, this is beyond our control.

If this should happen to you, please let us know, and drop any papers pertaining to this at our office; we will have the attachment stopped as soon as possible.

Please understand that a wage attachment cannot be stopped in one day, it may take up to two weeks to finally have the attachment stopped. Your help in this matter is very important; if a wage attachment should occur and you have dropped the papers off, please let us know the address of your payroll department and any person we might need to speak with. This will enable us to stop the attachment more quickly.

INCOME TAX REFUNDS
The Internal Revenue Service receives a copy of every petition that is filed with the Bankruptcy Court. If you are expecting a tax refund, you should expect it to be delayed. Once the IRS receives notification of the filing of your petition, they automatically put a freeze on any refund that is due to you. The purpose of this freeze is so that they can review your previous returns and determine that all income tax liabilities from previous years have been paid. We do not know how long the freeze will be in effect or how long your refund check will be held up.

SECURITY INTEREST AGREEMENTS
Some creditors such as Blazer, Devon, Sears, etc.. may claim what is known as a "Security Interest" in your property. These creditors may take back the property you financed if payments are not made to them. We will not know who holds a security interest until we file your petition. In the event that a creditor claims a security interest, we normally ask for written proof of this security interest and then proceed to contact you to make arrangements to either keep and pay for the property or to return it. We may, at some point, ask you to contact the creditor directly in reference to making payments or giving the property back. These creditors may ask you to sign a Reaffirmation Agreement, which we can discuss at that time.

CREDITORS
Our office will be sending you a letter approximately one (1) week after your petition is filed, giving you the docket number, date of filing and chapter of your bankruptcy. If a creditor calls you after the filing of your petition, simply give them this information. Do not give them any information concerning your account or argue with them. If you have not received this letter, please have your creditors call our office. You may receive calls and letters from creditors for several weeks after you file since it may take some time for the creditors to receive proper notification and note the bankruptcy on your account.

YOUR CREDIT RECORD
For approximately ten (10) years after you file your petition with the Bankruptcy Court, your credit record may reflect a Bankruptcy filing. The debts, which were listed in your schedules, will, for seven years, appear on your credit report with an indication that they were discharged in bankruptcy. If you apply for credit during this time period, chances are you will be turned down. However, in some cases certain companies will offer you credit if you obtain a co-Signor or pay the old bill. Creditors sometimes report your credit as being delinquent or unsatisfactory. This is due to the fact that your payments may have been sporadic, late or delinquent BEFORE you filed your petition. We cannot change this credit record for you. The bankruptcy does not wipe clean your credit record; it relieves you of the responsibility to pay the debts.

Please note that any changes or corrections on your credit record are your responsibility and are not included in the Bankruptcy fees you have paid the attorney for our services. Any requests for assistance with your credit report will require an additional charge.

USE OF CREDIT CARDS
IT IS IMPERATIVE THAT YOU DESTROY ALL CREDIT CARDS
AND DO NOT APPLY FOR ANY CREDIT CARDS OR LOANS

IF YOU HAVE FILED A CHAPTER 13, THE TRUSTEE IS AN ADMINISTRATOR OF YOUR ESTATE UNTIL SUCH TIME AS YOU RECEIVE YOUR DISCHARGE. THE TRUSTEE MUST APPROVE ANY CREDIT THAT YOU APPLY FOR DURING YOUR CASE, INCLUDING THE REFINANCE OF YOUR REAL ESTATE. ADDITIONALLY, IF YOU WANT TO SELL YOUR REAL ESTATE AND PAYOFF YOUR CHAPTER 13 PLAN EARLY YOU MUST CONTACT OUR OFFICE TO OBTAIN THE COURT’S APPROVAL. PLEASE CONTACT OUR OFFICE PRIOR TO ANY CREDIT PURCHASE OR APPLICATION SO THAT WE MAY ADVISE YOU AND, IF APPROPRIATE, OBTAIN PERMISSION FROM THE TRUSTEE.

NOTICE OF ABANDONMENT – CHAPTER 7
You may get a notice from court saying that your property has been "abandoned". YOU MAY IGNORE THIS NOTICE, although you should not throw it away; it only means that the Trustee and Court agree that they have NO interest in your property and DO NOT wish to sell it to pay back your creditors. Please keep this notice with your other bankruptcy papers.


DEBTOR EDUCATION
Please remember that you must attend a Debtor Education Course to receive your Discharge. Our office will provide you with a list of the agencies that are approved by the District of Delaware. Once you have completed the course, please return the certificate to our office, so we may file it with the Bankruptcy Court. You WILL NOT receive your Discharge Order unless you provide our office with the certificate.


YOUR DISCHARGE
If you filed a Chapter 7 petition and are granted a discharge from all debts, you will receive a notice from the Court called a "Discharge of Debtor". This is a notice that the Court will send to you stating that you have been discharged from your dischargeable debts. This does not include non-dischargeable debts (which include some taxes, student loans, secured debts, etc..) Once you receive your discharge, please put it in a safe place with your other important papers. Your discharge should become a permanent part of your financial records!!!!!

If you have filed a Chapter 7 or Chapter 13 Bankruptcy, please note that the Court has up to one year to collect any funds you should receive (i.e. lottery winnings, inheritance, settlement). This means that up to one year after receiving your discharge, if you should receive a large, lump sum amount, you MUST report this to our offices so that we can report it to the Court . YOU CANNOT SPEND ANY OF THESE LUMP SUMS UNTIL SUCH TIME AS THE COURT APPROVES YOUR KEEPING THIS MONEY. Failure to report this could result in sanctions against you.

IT IS IMPERATIVE THAT YOU KEEP THE COPIES PROVIDED TO YOU IN A SAFE PLACE WHERE YOU CAN RETRIEVE THEM. OUR OFFICE USUALLY KEEPS A COPY OF YOUR FILE EVEN AFTER IT IS CLOSED, HOWEVER WE CANNOT GUARANTEE THE DOCUMENTS WILL BE RETAINED AND AVAILABLE INDEFINITELY. Since you may need some of your bankruptcy documents in the future, please keep your copies in a safe location.

If you have any questions, do not hesitate to contact our office. We are here to help you.