Bankruptcy Chapters 7 & 13
The most common forms of bankruptcy used by most ordinary consumers are Chapter 7 and 13. In a common Chapter 7, the debtor (you) wipes out his or her debts without offering to pay on them. There are certain restrictions to Chapter 7 concerning amounts of property and income. In a Chapter 13, a debtor reorganizes his or her finances by paying some of the debt back over a three to five year period by making payments to the bankruptcy trustee. A Chapter 13 can be used to save homes from foreclosure, stop repossessions, deal with taxes, lower auto and furniture payments and protect property, which might be lost in Chapter 7. At Tom Scott & Associates we strive to fit you with the form of bankruptcy that will work best for your individual situation. If we don't think you should file at all, we will tell you so.

Listing Your Bills
It is your responsibility to provide the names, proper addresses, and account numbers for all your bills. A bill that is not listed in the bankruptcy or that has a wrong address cannot be discharged. You will be given a copy of the bankruptcy papers to keep for your records. It is your responsibility to check the papers in Schedules D, E, and F, to be sure all your bills are listed.

Non-Dischargable Bills
Most bills will be discharged by a Chapter 13 bankruptcy (wage earner plan where you pay your bills), but not all bills can be discharged by a Chapter 7 (called liquidation where you discharge your bills). The following are some of the bills you cannot discharge in a Chapter 7 bankruptcy: taxes, bad checks, child support, student loans, criminal/traffic fines and court costs, accident damage caused by a drunk driver, money/credit obtained after a false credit application was made, and intentional damage to property. Although, you must still list these bills on your bankruptcy with the rest of your bills.

Property You Can Keep
Bankruptcy law provides that you can keep most of what you own free and clear (cars, furniture, personal items, etc.) and thisis called exempt property. You must disclose all your property to the attorney so it can be listed in the bankruptcy. You cannot hide property from the Bankruptcy Court. There are some limitations to what you can keep and the attorney will explain those to you.

Lawsuits
Bankruptcy will stop nearly all lawsuits against you but only after your bankruptcy is filed and the court is notified in writing that you have filed bankruptcy. You must provide the attorney with complete information about all lawsuits you are involved in, including copies of any court papers.
It is possible that during or even after the bankruptcy one or more of your creditors may file a lawsuit against you. You must get the papers to the attorney immediately to protect your rights. A delay may cause you to waive (lose) a defense to the lawsuit called discharge in bankruptcy. Please pick up any certified mail you get because it might be a lawsuit.
You will not have to go to court for these lawsuits unless the attorney tells you to go. However, bankruptcy will not stop criminal, traffic, divorce, or support cases and you must go to court on those.

Garnishments
Bankruptcy will stop garnishments against you, but only after your employer is notified in writing about the bankruptcy. Note: the money already garnished cannot be refunded.

How Your Bills Are Notified About Your Bankruptcy
Within two (2) or three (3) weeks after your bankruptcy is filed, the bankruptcy court sends a court order to all your creditors ordering them to stop any type of collection and to notify them (and you) about your court date. Our office does not notify your creditors about the bankruptcy except where there is a lawsuit or where you have a secured bill (for example: car, house and furniture) that you want to keep and pay for, or surrender.

Bankruptcy Hearings and Continuances
In most cases you will have only one (1) hearing for your bankruptcy. The hearing will be held in downtown Indianapolis and will be held four (4) to six (6) weeks after your case is filed. You will receive notice of the hearing about two (2) to four (4) weeks before the hearing date and you must attend this hearing or your bankruptcy may be dismissed. If husband and wife both file, both must attend. If you so not attend your scheduled hearing and the attorney must obtain a continuance for you, there will be an extra charge for your rescheduled hearing. Please do not bring children to any hearings that you must attend. In most cases, your hearing will be rescheduled to another date if your children are with you and this will result in the extra charge. Please dress appropriately. Please Note: All fees due are to be paid by the original hearing date regardless of whether the hearing is continued or not.

Change of Address or Telephone Numbers
If you change your address or telephone numbers during the bankruptcy, you must notify our office at once so that you receive all your bankruptcy papers. We also need to be able to contact you to deal with any problems that may arise.

Credit Cards
If your bills include credit cards, stop using these cards at once and do not use them anymore. Any new purchases on these cards after your bankruptcy is filed can cause problems. If the credit card company asks you to cut up the cards and return them, then please do what they ask.

Paying Bills
If you want to reaffirm (pay) some bills, such as your car, house, or furniture, then keep making your payments as scheduled. Do not stop making those payments unless you are filing Chapter 13 bankruptcy and the attorney will advise you what to do. Keep your vehicle insured at all times!
You do not have to pay any of your other bills any further unless we advise you to do so.

Adding Bills After Your Bankruptcy is Filed
Your bankruptcy can discharge bills only if they occurred before the bankruptcy is filed. If you find a bill from the past that your forgot to list in the bankruptcy, you can add it while the bankruptcy is still pending. There is an extra charge of $70.00 to add creditors each time.

Student Loans
Currently student loans are non dischargeable in bankruptcy no matter how old they are. A Chapter 13 bankruptcy can delay payment while in the bankruptcy but payments normally must be resumed on the student loan(s) after completion of your bankruptcy.

Objections to Your Bankruptcy
If one of your creditors files an objection to challenge whether that bill should be discharged or if your bankruptcy trustee (the person the judge appoints to supervise your bankruptcy) takes legal action to take some of your property, then you will be charged additional reasonable attorney fees to defend you in these actions.
These objections / complaints can be filed up to sixty (60) days after your court hearing. If a creditor does not attend your hearing, does not necessarily mean that they cannot do anything if there is a problem.

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.