Bankruptcy Information Page 4
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Abuse of the Bankruptcy Process
The bankruptcy trustee reviews each bankruptcy to see if there has been "substantial abuse" of the process. One example of substantial abuse is where a person obtains a number of credit cards, runs them up very high or to the limit quickly, and then files bankruptcy quickly. Another example is where a person or married couple has a high enough income to pay some or all of their bills, but choose to try to discharge them in a Chapter 7 liquidation bankruptcy. If the bankruptcy court says there is abuse, then you would have two (2) choices: first, dismiss the bankruptcy; or second, convert (change) your Chapter 7 to Chapter 13 bankruptcy where you pay part of all of your bills. If you convert to Chapter 13 from a Chapter 7 bankruptcy, you will be charged additional attorney fees.
Discharge in Bankruptcy - Chapter 7
Your bankruptcy is over when you receive a paper called your Discharge of Debtor(s). Your bankruptcy is eligible for discharge sixty (60) days after your court hearing if there are no problems. However, because of the backlog at the bankruptcy courts, you will probably not receive your discharge for three (3) to four (4) months after your court date. Once you are discharged, you cannot file another Chapter 7 bankruptcy for eight (8) years from the date that your bankruptcy was first filed. (However, please note that if you get into real financial trouble again within eight (8) years, then you may be eligible to file a Chapter 13 bankruptcy sooner).
Discharge in Bankruptcy - Chapter 13
A Chapter 13 bankruptcy is discharged after you make all of your scheduled payments, at the end ofthree (3), four (4), or five (5) years. However, there is not waiting period to file another Chapter 13, so that if you get into financial trouble again, you can file another Chapter 13 bankruptcy right away.
Bankruptcy Attorney Fees
Please understand that you agree that if if you fail to pay the attorney fees for this bankruptcy, you agree that these fees are a post-petition debt that is not dischargeable and that you will also be responsible for all court cost and a reasonable attorney fee for any collection of the fees. Also, there will be no refund of any attorney fees paid to our office for any work done toward your bankruptcy, whether the bankruptcy has been filed or not.
Tax Refunds
Tax refunds are only protectable (exempt) to the sum of $100.00 per person ($200.00 for husband and wife). The court has the right to take any amount over that. However, it is generally too expensive and too much trouble for the court to take your refund if it is under $2,000.00 (this is not a firm number). Any refund received between the time you file and the time you appear in court must be held until the court date, you are not allowed to spend it. If the court waives their right to your refund at the hearing, you are fee to spend it.
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