Frequently asked questions (FAQ) about what to expect during a bankruptcy case. Click a question below to read the answer.
- DO I HAVE TO DO THE CREDIT COUNSELING/DEBTOR EDUCATION TO BE ELIGIBLE TO FILE A BANKRUPTCY CASE?
- HOW DO I OBTAIN THE CREDIT COUNSELING/DEBTOR EDUCATION?
- WILL I HAVE TO GO TO COURT?
- WHAT HAPPENS AT THE COURT HEARING (MEETING OF CREDITORS)?
- HOW LONG DOES IT TAKE FOR MY BANKRUPTCY CASE TO BE COMPLETED?
- IS IT MANDATORY TO SIGN A REAFFIRMATION AGREEMENT TO KEEP THE COLLATERAL?
- CAN I NEGOTIATE A PAYOFF ON A SECURED DEBT?
- CAN I CHANGE FROM ONE BANKRUPTCY TO ANOTHER?
- CAN CREDITORS OBJECT TO A CHAPTER 13 PLAN?
- WHAT IF I CAN’T MAKE THE PAYMENTS ON MY CHAPTER 13 PLAN?
- CAN I OBTAIN CREDIT WHILE IN A CHAPTER 13 BANKRUPTCY?
1. DO I HAVE TO DO THE CREDIT COUNSELING/DEBTOR EDUCATION TO BE ELIGIBLE TO FILE A BANKRUPTCY CASE?
Yes. You may not file a bankruptcy case without first having the pre-bankruptcy consultation. You will not receive a discharge without completing the education course.
2. HOW DO I OBTAIN THE CREDIT COUNSELING/DEBTOR EDUCATION?
We can help you obtain the pre-bankruptcy consultation through GreenPath, or you may obtain the consultation from the local Consumer Credit Counseling Service office or a number of other agencies. Most of our clients choose to use GreenPath. Our office has an account, so you can pay our office for the consultation. (We are not allowed to charge a fee for this service.) There must be some telephone or personal contact by online chat on the initial consultation, even if the information is entered by you online. The educational course may be done entirely online. If the pre-bankruptcy consultation is done by telephone, expect to spend 40 minutes. You may do this at your home, but if you are a little nervous about what to expect or are worried about your cell phone not holding its charge, you may use our office to make the call. If you choose GreenPath, the education course, which cannot be taken until after you file your case; consists of reading a book, then taking a test by telephone or completing an online course. Other providers may use other formats.
3. WILL I HAVE TO GO TO COURT?
You will be required to attend a meeting of creditors, which your attorney will normally call a “341," after the section of the bankruptcy code requiring the meeting. Creditors seldom attend, so if you and your attorney are well prepared, the meeting should last no more than five minutes. The trustee assigned to your case will ask you, under oath, certain questions concerning your assets. In the Northern District of West Virginia, meetings of creditors are held in the Bankruptcy Courtroom in Wheeling, the Bankruptcy Courtroom in Clarksburg, and City Council Chambers in Martinsburg; depending on the county in which you reside. In Chapter 13, in addition to the Meeting of Creditors, you will be required to attend a confirmation hearing in bankruptcy court; however, in the Northern District of West Virginia, your plan may be confirmed without a hearing, if there are no objections and the trustee agrees.
4. WHAT HAPPENS AT THE COURT HEARING (MEETING OF CREDITORS)?
The trustee conducts the meeting and sits on one side of a table. When your case is called, you and your attorney will come to the table and sit across from the trustee. You will give the trustee your driver’s license and Social Security card, and the trustee will swear you in, as all testimony is given under oath. Then the trustee will ask you questions about your assets. These questions are not difficult, as they already should have been truthfully set forth in your bankruptcy petition. Most trustees in this district will ask to see any pay stubs you have received since filing your case and your last bank statements from each bank account you maintain. You are required to bring those to the meeting. When the trustee is finished, any creditors who are present may ask you questions. It is not unusual for no creditors to appear.
5. HOW LONG DOES IT TAKE FOR MY BANKRUPTCY CASE TO BE COMPLETED?
A Bankruptcy case is set for a Meeting of creditors at the next available date, which will be 20 to 40 days after your case is filed. Meetings of creditors are set two days per month, generally the second or third Wednesday or Thursday in Clarksburg, one day per month in Wheeling, and one to two days per month in Martinsburg. A discharge cannot be granted until at least 60 days after the meeting of creditors.
6. IS IT MANDATORY TO SIGN A REAFFIRMATION AGREEMENT TO KEEP THE COLLATERAL?
The bankruptcy code states that it becomes a matter of state law if you don’t sign a reaffirmation agreement. In other words, is filing bankruptcy an incident of default under state law? No clear State Court decision has arisen yet concerning West Virginia law, but the United States Court of Appeals for the Fourth Circuit has rule that a creditor can repossess personal property securing as debt if the debt is not reaffirmed. Most debtors have signed Reaffirmation Agreements if doing so was a good deal for them, and have refused to do so when it was not. Some creditors have repossessed vehicles, but the discharged debtors were able to get a better deal by buying a new or used car than what they were paying for the repossessed vehicle.
7. CAN I NEGOTIATE A PAYOFF ON A SECURED DEBT?
In Chapter 7 cases, there is no prohibition against a debtor negotiating a payoff on a debt secured by property owned by the debtor. However, if the payoff is to be in payments by a reaffirmation agreement, it must be filed with the court prior to discharge. If you have the cash, most debts can be reduced to the value of the collateral by filing a motion for redemption with the court. One cannot redeem collateral over time; the value must be paid in full after entry of the Order permitting the redemption. In Chapter 13 cases, you can likewise negotiate a value, but the Chapter 13 trustee might object if the trustee believes the secured creditor was receiving more than it is entitled or if the trustee thinks the collateral is unnecessary.
8. CAN I CHANGE FROM ONE BANKRUPTCY TO ANOTHER?
This is called converting, and you can convert your case from one chapter to another so long as the case wasn’t converted from that chapter to begin with.
9. CAN CREDITORS OBJECT TO A CHAPTER 13 PLAN?
Yes. Creditors can object to your Chapter 13 plan, but their objections will only be sustained if your plan does not conform to the law.
10. WHAT IF I CAN’T MAKE THE PAYMENTS ON MY CHAPTER 13 PLAN?
This depends on the reason you can’t make your payment. If there is a temporary problem, such as short-term layoff or sickness, the payments can be temporarily suspended. If the problem is a permanent reduction of income, the case may have to be converted to Chapter 7, or, in some circumstances, a hardship discharge can be granted.
11. CAN I OBTAIN CREDIT WHILE IN A CHAPTER 13 BANKRUPTCY?
Yes, but only with the court's approval and for a good reason. It is very difficult to find a lender who will give you credit while you are in a Chapter 13 bankruptcy.