Frequently Asked Questions
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FAQ’s – General Information
Can I go to jail for not paying my bills?
In general, there are no criminal penalties for failure to pay a consumer or business debt, even if the debt has been reduced to a judgment. Certain exceptions apply for child support and criminal fines.
If you write a check to a merchant on a closed account or with willful knowledge that you have no funds in your account, these could result in criminal charges.
If I am behind on my car payment, do I have to become current before I file or after I file bankruptcy?
If you file Chapter 13, you will NOT need to catch up past due amounts. The car note will likely be paid in your Plan over a 3 to 5 year period, even if your car note is due to be paid off sooner according to your original contract.
In a Chapter 7, if you wish to retain your vehicle, most creditors require you to be or quickly become current on your loan obligation before they will reaffirm the debt with you.
How long does bankruptcy stay on my credit report?
Any negative information on your credit report stays there for seven years. Bankruptcy stays on your credit report for 7 to 10 years.
Can I still use my credit cards after I file bankruptcy?
No, in a Chapter 13 you may not use credit cards or incur any new debt without first obtaining permission from the trustee or the court. This is done by completing a request to incur new indebtedness, which is then processed through the attorney’s office.
In a Chapter 7, your creditors will likely close your accounts, even if you have not listed an open, paid account in your bankruptcy paperwork. Any debt you incur after you file will not be included in the discharge. Note that you will likely receive numerous credit offers after filing Chapter 7; therefore, you can begin establishing your credit if you desire. Also, if you need a credit card for travel, you may wish to contact the card company and see if they will allow you to maintain your account, even if they lower your credit limit.
Do I have to list all my debt if I file bankruptcy?
Yes, all debts you owe must be listed in either a Chapter 7 or Chapter 13. If you file Chapter 7, you will indicate which creditors you intend to continue paying. In a Chapter 13, even though you must list the debt, there are ways to pay the creditor directly instead of including the payment in your plan if there are legitimate reasons for doing so.
If I live outside Hamilton County, why am I filing bankruptcy in Chattanooga?
Bankruptcy is federal law; therefore, your case will be filed in Chattanooga if you live in one of the following counties: Bledsoe, Bradley, Hamilton, McMinn, Marion, Meigs, Polk, Rhea or Sequatchie. If you reside in McMinn or Monroe county, you may choose to file in Chattanooga or Knoxville.
I don’t want to “file” on my house because I’m current. Can I keep my house/car out of bankruptcy?
You must list everything you own and everyone you owe; however, you will likely be able to keep the property you desire either in a Chapter 13 bankruptcy or a Chapter 7 case.
Can you alter my first mortgage payment in a bankruptcy?
There are new laws that may be passed that would allow your first mortgage to be adjusted by a bankruptcy judge in Chapter 13 if your total payoff is greater than the value of your property; however, that law is NOT currently in effect. Although a judge does not have the authority to alter the first mortgage payment in bankruptcy, it is still possible to negotiate a loan modification agreement with the lender before or during a bankruptcy. In fact, there are certain programs that are only eligible for active Chapter 13 debtors and/or those that have just received a discharge in a Chapter 7 case.
In a typical loan modification agreement, it is possible for your payment to be altered by re-amortizing the loan (taking your existing balance, including any fees, late payments and accrued interest, and dividing it over the remaining months of the loan to deem your loan as current and set a new monthly payment amount). Other lenders may consider refinancing your loan altogether under new terms and a new 30 to 40 year repayment period.
In Chapter 7, if you wish to retain your home, you will be required to continue to pay your mortgage, and typically the reaffirmed terms are according to the original terms and monthly payment. Again, there is nothing prohibiting you from requesting that the lender refinance the loan terms during or after your discharge.
Can you alter the payment on my second mortgage in bankruptcy?
YES, there ARE currently ways of altering your second mortgage or Home Equity Line of Credit (HELOC) in a Chapter 13 bankruptcy. If your home is not worth as much as what is owed on the second mortgage or on a judgment lien that has been recorded against your residence, you may be able to eliminate the second mortgage during your Chapter 13 plan and possibly pay the second mortgage holder or a judgment lien creditor less than what is owed on the note.
In Chapter 7, if you wish to retain your home, you will be required to continue to pay on the first and second mortgage, typically according to the original terms and monthly payment. Again, there is nothing prohibiting you from requesting that the lender refinance the loan terms during or after your discharge.
My car just got repossessed. Can bankruptcy help me get it back?
Possibly, if you have lost your car in the last week or two and you file Chapter 13, your attorney can petition the court to have the creditor return it to you, especially if you use your car to get to work or in a business.
If I return my car voluntarily to the creditor or dealer where I bought it, can they still hold me responsible for paying for it?
Unless you receive written notice from the creditor that they will not hold you liable, a creditor CAN hold you responsible for the “deficiency balance,” which is your payoff balance minus any credits made to your account as a result of the sale of the vehicle. There are certain defenses that may apply if the creditor fails to notify you according to state law; however, these defenses can be difficult to prove in court. Note that you can discharge a deficiency balance in a Chapter 7 bankruptcy and a deficiency balance is treated as an unsecured debt that does not bear interest if included in a Chapter 13 case.
Can I file without my spouse?
Yes, if you are married, your spouse is not required to file bankruptcy with you. In fact, it is possible for married couples to file two separate bankruptcy proceeding if appropriate, (i.e., husband files 7 and wife files 13). There may be legal issues that arise for the non-filing spouse; however, you should discuss your circumstances with the attorney if one spouse desires or needs to file bankruptcy and the other spouse does not.
If I file bankruptcy, how will this affect someone who co-signed a debt with me?
A bankruptcy filing is specific to the individual and not the debt; therefore, the bankruptcy will not typically appear on a co-signors credit report as if he or she has filed for bankruptcy. If you discharge your debt in a Chapter 7, the co-signor on the loan remains legally responsible for the obligation. In a Chapter 13, if you include the co-signed debt in your case and pay the creditor what is owed, this will likely protect the co-debtor and wipe out the debt as to you and the co-signor upon the completion of your case. Just as a debtor is protected by the automatic stay, a co-debtor has similar protections in a Chapter 13 case.
What if I forget to list a creditor when I file bankruptcy?
Whether you file Chapter 7 or 13, there is a process by which omitted creditors can be added to your case after you have filed it with the court. Therefore, if the debt was incurred prior to your case filing, it is eligible for inclusion and will not be excepted from discharge or excluded from your case if you add the creditor. There is a nominal charge for adding creditors and you should notify the attorney as soon as you realize someone was omitted from the original documents filed with the court.
What if I continue to receive calls and collection letters after I file bankruptcy?
You should notify the creditor of your case number, the chapter you filed and the attorney contact information. If they continue to contact you after this information is provided, note the details of the call/contact and advise the attorney. After filing a Chapter 7 or 13, all creditor communication should be routed through the court or your attorney’s office. If creditors are contacting you after they have been “notified” of your filing (official notice from court is not required to constitute “notice”) continued creditor contact in any form may be a violation of the automatic stay provisions.
What do I tell creditors if they call me before I actually have a case number?
If appropriate, you may wish to advise creditors that you have retained an attorney to assist you with your finances and then provide them with our name and contact information. Some creditors will honor this information, while others will not. If you receive any calls at your place of employment you can advise creditors you are not allowed to receive personal calls at work and ask them (preferably in writing) to stop contacting you at that number.
Will I still have to pay my mortgage after I finish my bankruptcy?
If you file Chapter 7 and desire to retain your home, you must continue making your mortgage payments. If you are surrendering the property to the creditor and wiping out any debt associated with the property, you will not continue paying your mortgage.
If you include your long-term mortgage in a Chapter 13 plan, upon your Chapter 13 discharge, your loan should be deemed current and you will simply continue paying the monthly mortgage payment where the Chapter 13 trustee “left off.” The trustee’s office will send a correspondence indicating when the last mortgage payment was made and when you should begin your next payment.
Can my employer fire me for filing bankruptcy and/or having my Chapter 13 payment come out of my check?
The bankruptcy law specifically prohibits employers from terminating you or taking any negative employment action against you simply because you filed bankruptcy or because you have money withheld from your wages.
FAQ’s During A Chapter 13 Bankruptcy Case*
Do I need to advise you when my contact information changes?
Maintaining communication with Ms. Randle’s office during your Chapter 13 case is crucial; therefore, notify us immediately with any new contact or name change information. If appropriate, we will update the court and trustee’s office so you will continue to receive notices and updates regarding your case.
After my initial meeting of creditors, will I ever have to go to Chattanooga again?
If your case is confirmed and you have no issues that arise during your case, you will not have to attend any further hearings or make any court appearances.
If you fall behind in your payments or if we need to alter your plan, you may be required to appear in court or at an additional meeting of creditors.
I changed employers; what do I do about paying my case?
If you change jobs, you should notify our office immediately. We will need your new employer’s name, payroll address and how often you are paid. We will provide this information to the trustee’s office so they can issue a wage order to your new employer if appropriate.
Please note that you are responsible for continued plan payments during your job transition, so mail your payment by money order or certified funds to Kara L. West, P.O. Box 511, Chattanooga, TN 37402. Make sure to include your name and case number. You may also wish to include a payment coupon.
I lost my job; what will happen to my Chapter 13 case?
If you have experienced a temporary layoff, you should continue to pay your plan payment as regularly as possible. You should mail your payment by money order or certified funds to Kara L. West as set out elsewhere in the website.
If your job loss is permanent, you should notify the office to discuss your options. The eligibility requirements for Chapter 13 mandate that you have “regular income,” however, this can be from unemployment, disability income or income from a spouse or family member who regularly contributes to your household if it provides you enough to fund your plan.
If you lose your job and do not have the means to continue your plan payment, please let us know immediately. We may be able to reduce your payment, modify your plan or convert your case to Chapter 7.
Can I incur new debt while I’m in Chapter 13?
During your Chapter 13 plan, you should NOT incur any new debt without requesting permission from the trustee. If you need financing, you should contact our office. You should have available the reason for the purchase, the purchase price or amount to be financed, interest rate and monthly payment. Typically, you must have been in your case for more than six months and you must be paying your current creditors 100%. There are some exceptions, especially for student loans, so contact us and we will forward the trustee the appropriate request form.
I am receiving statements from a creditor I forgot to list in my bankruptcy. What can I do?
There is a process for adding creditors that have been inadvertently left off your bankruptcy schedules. Please contact us with the name, address, account number and approximate amount owed. There is a nominal charge for adding creditors; however, as long as the debt was incurred prior to your filing, it can likely be included in your case.
I have incurred medical bills after I filed bankruptcy. Do I pay them?
Medical bills incurred after your Chapter 13 file date may be included in your present plan if the provider files a claim in your case. You can notify the provider of your case number and ask that they file a claim. If a creditor does not want to file a claim or you wish to pay them, you may establish payment arrangements directly with the provider.
Please note that medical providers and other “post-filing” creditors may not collect their debt by wage garnishment while you are in a Chapter 13; however, you will still owe the debt if it is not included and paid in your plan.
Will I receive tax refunds during my Chapter 13 case?
If you are paying your unsecured creditors more than 70% of what is owed to them and you are current on what is owed to the IRS, you are entitled to your tax refunds. If you are paying less than 70% to these creditors, your refund will be paid directly to the Chapter 13 trustee and used to increase the percentage of money that is paid to your unsecured creditors. Ms. Randle discussed this with you before deciding to file Chapter 13; however, if you have any questions about whether you are entitled to a refund, feel free to contact the office.
Please note that even if you are entitled to your refund, you should not use a rapid refund or advance tax loan if you are in Chapter 13.
Do I have to file income taxes during my 13 case?
Yes, in order to stay in your case, you must remain current on your income tax filings. You should also make every attempt to remain current on your post-filing tax liability. Please note you should not use a rapid refund or advance tax loan if you are in Chapter 13.
I received a motion to dismiss my case. What do I do?
If you have fallen behind on your plan payments and/or failed to update your employer information, the trustee can ask the court to dismiss your case. If you receive a motion to dismiss, please contact the office immediately. You have several options, such as increasing your payment and paying the arrearage over the remaining time in your case; catching up your payment before your court date, or modifying your plan where possible to lower your payment. The court sets a hearing date after giving you and your creditors 30 days’ notice so continue paying your plan payment and don’t misunderstand the motion as an actual dismissal of your case!
I received a letter from my mortgage company indicating my payment is changing. What now?
If your mortgage has an adjustable rate or is “escrowed” (includes your taxes and/or insurance), your mortgage payment may change during the course of your Chapter 13 bankruptcy. In order to accommodate the change, we can enter an agreed order with the trustee so that the payment will remain correct. This may change your plan payment, but Ms. Randle can determine that for you.
Do I continue to pay my property taxes while I’m in Chapter 13?
Unless your property taxes are included in your current mortgage payment, you should pay the taxes each year when due.
Do I have access to my case information and the balance of my Chapter 13 plan?
You may monitor the payments being made, along with the balances owed to each creditor by contacting our office for a periodic trustee report. You may also monitor your case online at www.trustee13.com. Your user name will be your case number (including the dash), and the password is the last four digits of your Social Security number. Please note that the balances on Mr. Still’s website are estimates only and the trustee may be holding money that you have paid but that has not yet been paid to your creditors since trustee payments are made on a monthly basis.
What is the payoff amount of my case?
If you want an estimate of your balance, you can access that online at www.trustee13.com. Your user name will be your case number (including the dash), and the password is the last four digits of your social security number. If you would like an exact payoff amount, this must be requested through our office in writing.
If a payoff is desired, you should complete the Payoff Request Form and fax or mail it to the office for Ms. Randle’s signature. Please note that a payoff will only be provided two times in a 12-month period, so do not request it unless you are relatively certain you can obtain funding to pay your case in full.
NOTE: If your plan is paid off within the first three years of your initial case filing, you must pay your unsecured creditors 100% of what is owed, which may be different than what was proposed in your Chapter 13 plan.
What if a creditor that I listed in my case doesn’t file a claim?
Unsecured, nongovernmental creditors have a deadline in which to file a claim in your case, which is approximately 90 days after the date set for your initial meeting of creditors. If you listed the creditor and they fail to file a claim before the deadline, you will not have to repay the debt as long as you pay as otherwise noted in the plan and you eventually receive a discharge from the court.
Secured creditors are NOT required to file a claim nor are they bound by a filing deadline. If a secured creditor fails to file a claim, it simply means they will not receive payment from the trustee during the case. Even though the creditor will not receive payment, they will still have a right to reclaim any property that secured their loan at the completion of your case, which is obviously not desirable. Because your plan proposes to pay secured creditors so that their lien will be released upon discharge or so that your long-term obligations, such as your mortgage, are current upon discharge, Ms. Randle will monitor the case and file a claim for any secured creditor that fails to do so.
Will Ms. Randle monitor the claims filed in my case?
Yes, when a creditor files a claim in your case, Ms. Randle is notified by email. Additionally, after the deadline has passed for unsecured creditors to file claims (bar date), Ms. Randle reviews all claims. At this time, she will make sure no creditor filed duplicate claims or filed a claim for more than what is owed. Additionally, she will file claims for secured creditors who have failed to do so.
You will receive a copy of the trustee’s report after the bar date and two times per year thereafter. If you see any creditors you do not recognize or find amounts that don’t appear to be correct, please notify Ms. Randle so she can discuss your case with you. You may also monitor payments in your case by enrolling at the trustee’s website.
Can I sell my home or car if I am in Chapter 13?
If you desire to sell property that is subject to your bankruptcy case, you may be able to do so; however, you will need to obtain court approval and give notice to your creditors. If this applies to you, please contact the office for an appointment.
I had a car accident in a vehicle I’m paying for in my bankruptcy. What do I do?
Hopefully, you had insurance coverage on the vehicle. If so, you should notify the insurance company that you are in a Chapter 13 case and contact our office as well. If the insurance company has deemed your car as a “total loss,” you have some alternatives. You can simply pay off the loan and we can modify your plan and reduce your payment. If you need a replacement vehicle, we may be able to use the insurance proceeds to accomplish this. If you were involved in an accident, please contact the office for an appointment.
I had an insurance claim and/or a lawsuit pending before I filed Chapter 13. I am ready to settle the case or have received a judgment in my favor; do I have to notify the trustee or the court?
All claims or potential lawsuits should have been listed when you originally filed your Chapter 13 case. In addition to this initial disclosure, in most cases, you will need additional documentation before you can settle or receive any money stemming from that case. Make sure you advise the claims adjuster or the attorney handling the case for you that you are involved in a Chapter 13 bankruptcy. You should update Ms. Randle about the progress of your case and advise her before any settlement and/or disbursement of funds is made.
*The information appearing on this website should not be used, nor is it intended to be legal advice or a substitute for a personalized legal consultation. The questions and responses are general in nature, and you should consult Ms. Randle to discuss how your individual case should be handled in any given situation set forth above.
FAQs Regarding The Meeting Of Creditors
What should I bring to my meeting of creditors?
Social Security card or an official document showing the full number. Receipt(s) of your plan payments (paystub and/or money order receipts)
Insurance information on your home and cars included in your case. Make sure the insurance document shows your policy number, the item of property that is covered, the lien holder or creditor’s name, effective dates of coverage and your deductibles. The best document to bring is called a “Policy Declaration Page,” which can be supplied by your insurance agent or located at the front of most insurance policies.
Documents reflecting statements from creditors that were NOT listed in your original filing, if applicable.
Where is the meeting of creditors held?
The meeting of creditors, or 341 meeting, as it is sometimes called, will be held in the basement conference room of the Historic United States Bankruptcy Courthouse located at 31 East 11th Street, Chattanooga, TN 37401. (Please note this is not the same location as the United States Federal Courthouse.) See Driving Directions to the Courthouse.
How should I dress for the meeting of creditors?
Although the meeting is not held in a courtroom, you should be mindful of your choice of clothing. You should avoid wearing a ball cap or hat, especially in the meeting room. Also, you should not wear shorts or tank tops. It is appropriate to wear casual clothing, as “Sunday dress” is not required. Simply use common sense and if you have questions, do not hesitate to ask the office in advance of your meeting. Also, note that many individuals work on the day of their meeting of creditors; therefore, clean, dry work clothing is acceptable if you need to come directly from work or return to work after your meeting.
What will occur at the meeting of creditors?
Anywhere from 10 to 20 cases are scheduled at the same time as your case. The trustee will be seated at the head of a conference table with his legal assistant, and you will wait in the conference room or in the hallway until your case is called. I will be available before the meeting to gather your identification and Social Security cards and answer any questions you may have.
At the beginning of each meeting, the trustee will make announcements and will begin calling the cases. Once your name is called, you should be seated to Ms. Randle’s left at the conference table. Ms. Randle will present your ID and Social Security documentation to the trustee’s assistant and you will be sworn in.
The Trustee will likely verify your current address and employment information. He may then ask other questions about the information you provided in your bankruptcy paperwork, and you should answer him loud enough for your response to be heard. Also, note that the hearing is tape-recorded, so answer verbally instead of simply nodding or gesturing.
Lawyers or creditor representatives may be present to ask questions about how they will be repaid. Creditors may also ask for insurance information, the condition of the property that secures their customer’s loan and information about co-debtors on your account when applicable.
How long should I expect the meeting of creditors to last?
From start to finish, depending on the issues in your case, the meeting will only last three to six minutes. If additional questions are required or additional documentation is needed, the trustee may continue the meeting of creditors to a new date. You may not be required to attend this continued meeting, but you should discuss this with Ms. Randle prior to the rescheduled date.
What if a creditor fails to appear at the meeting of creditors?
It is NOT mandatory for the creditor or a representative to appear at the meeting. In fact, very few representatives actually appear. Note that a creditor’s right to receive payment through a Chapter 13 plan is NOT based on their attendance at the meeting, and creditors have the option to file objections to your Chapter 13 plan online without attending the meeting in person. The deadline for filing an objection to a Chapter 13 plan is before or at the meeting, so we will know the nature of any objection the day that we attend the meeting.
It is very unlikely that unsecured creditor representatives will appear at the meeting either in a Chapter 13 or Chapter 7 case; however, your secured creditors are more likely to appear to finalize documentation.
Will I be required to answer the questions at the meeting of creditors or will my attorney answer on my behalf?
Although Ms. Randle can clarify any questions you don’t understand and address any legal issues that arise, you are personally responsible for answering the majority of what is asked by the trustee and the creditors. If you do not understand the question or do not know the information that is being asked, do not hesitate to ask Ms. Randle or simply indicate that you do not know.
Please note that no one should be rude or unkind to you during the meeting, so this should not be a concern.
What happens after the meeting of creditors in my Chapter 13 case?
If there are no objections or Ms. Randle resolves the objections, the 13 plan will be presented to the court for approval. Once approved, the judge enters an order called an “Order Confirming Chapter 13 Plan.” This typically happens within one week of your meeting of creditors, and you will receive a copy of the Order in the mail approximately ten to fourteen days after your meeting. Occasionally, depending on the complexity of your case, objections may take additional time to resolve; however, you should continue making your plan payments during this time and make sure to update the office immediately if you have questions or have any changes in your contact or employment information.
What happens after the meeting of creditors in my Chapter 7 case?
After your meeting of creditors, we will be awaiting additional reaffirmation agreements and other documents that may arrive by mail from the creditors if they were not present at the meeting. This is also a time period during which you should finish your second credit counseling session called the Financial Education Management Course. You will have 45 days after the meeting of creditors to complete this course but you may complete the course at any time after you receive your bankruptcy case.
If you do not have any debts you wish to reaffirm, there will be little activity between the time of your meeting and your discharge. Your discharge order will be mailed to you approximately 60 to 75 days after your meeting of creditors.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.