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Check out the latest video regarding Life After Bankruptcy.
Starting September 12, 2008, the court location for Lake County bankruptcy cases will change. The new address will be:
Park City Branch Court
Courtroom B
301 Greenleaf Avenue
Park City, IL 60085
The hearing times will not change from the schedule set at Lakehurst. As for the Lakekhurst courthouse, we hardly knew you; we will hardly miss you.
In case you didn’t feel it, the numbers will tell the story. The total number of U.S. bankruptcies filed during the first three months of 2008 increased 26.9 percent over the same period in 2007. This figure is provided by the Administrative Office of the U.S. Courts which released the information today. Specifically, the total filings reached 245,695 during the first calendar year quarter of 2008 (Jan. 1-March 31), surpassing the 193,641 new cases filed over the same period in 2007.
Although we are nowhere near the amount of filings pre-reform, the uptick demonstrates that people in America are struggling significantly with debt. The bankruptcy reform laws of October, 2005 were just a speed bump on the road to future bankruptcy filings. If the sub-prime mortgage meltdown wasn’t bad enough, the current economic conditions and supra $4.00 a gallon gas prices have begun to take their toll. I believe that it is only a matter of time before filings propel to near record levels again. It will probably occur during the 2010 fiscal year.
Additional Information At Chapter 7 Bankruptcy
Yes, you read that correctly. Debit audits are officially back as of May 12, 2008. This is despite the fact that the panel trustee already examines the debtor, and despite the fact that the U.S. Trustee already reviews every petition filed with the Clerk. The new notice from the office of the U.S. Trustee, dated May 9, 2008, clearly states that the U.S. Trustee will resume debtor audits.
Isn’t the U.S. Trustee technically doing debtor audits when bringing 2004 Exam Subpoenas? Isn’t the U.S. Trustee already seeking tax documentation and proof of income through these 2004 Exam Subpoenas? Of course. However, they are not technically considered audits as mandated in Section 603(a) of Public Law 109-8, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Personally, I am still looking for the consumer protection portion of the Act. I know I saw it somewhere, but I just don’t see how the consumers are really being protected. I suppose that the reaffirmation hearings are some sort of consumer protection. Or you could say that the hearings are just another burden placed on the debtor to convince the court that the debtor can afford his or her car. This often requires additional time off of work, but that’s the debtor’s problem. It will just make it a little harder to pay for the car on time.
I would have simply called the Act the Bankruptcy Code and I would have subtitled a section of that Code, Abuse Prevention. Anyway, sorry for my digression. The reason that the debtor audits were suspended was due to budgetary reasons. I suppose everyone associated with bankruptcy, including myself, is spending more money than they did prior to bankruptcy reform. As for the upcoming audits, they will be limited to 1 out of every 1000 cases as opposed to 1 out of every 250 cases as before.
Lastly, I don’t recall how many cases were dismissed or how many discharges were denied due to a debtor’s failure to pass the audit. Were these audits simply attempts to demonstrate the type and extent of abuse promulgated by debtors? If so, will auditing 1 out of 1000 cases have any impact at all?
The truth is simply that the U.S. Trustee is doing just what the Act mandates. I would suggest that instead of robotically adhering to all provision of the Act, we should instead, make some revisions. The reforms laws may have looked good on paper to those who lobbied eight years for the changes. But looking good on paper and having an actual positive result are two different things. It’s o.k. to admit that and to acknowledge that. Now, an effort should be made to smooth over the rough spots and to clarify some of the ambiguities. Otherwise, we will continue to wade in the minutia, all the while pretending to be walking on soft, sandy beach. If the debtor audits produced little fruit and if the cost of said audits was prohibitive, why not look to make a change. Throw it back to the lawmakers to make it right. If everyone works together, it can probably get done within the next eight years.
Beware of the dangers in co-signing for another person:
In a hypothetical case of Joseph Debtor, a creditor was listed on the Petition and notice was properly sent. However, in addition to Joseph Debtor, there is also a co-debtor, Courtney Co-Debtor. The creditor can pursue the debt against the non-filing party, in this case, Courtney Co-Debtor. People often assume that the underlying debt has been eliminated in a Chapter 7 bankruptcy case. Actually, the liability of a particular debtor has been discharged in a bankruptcy. The underlying debt still remains as to any liable party who does not file for bankruptcy protection.
We see this often in the case of a co-signer to an auto loan. One party fails to make timely payments and the creditor pursues both the signer and the co-signer. If only one party files for Chapter 7 bankruptcy, the creditor is free to pursue the debt against the co-signer who has not filed.
The Clerk of the U.S. Bankruptcy Court for the Northern District of Illinois has just issued an updated version of the form required to accompany all motions for relief from stay. The form includes the following items:
Debtor, Creditor, Relief Sought, Chapter 13 Confirmation Date Hearing or Date Confirmed;
Chapter 7 Report of No-Assets or Date of 341 Meeting of Creditors, Type of Collateral, Balance Owed, Other Liens Against Collateral, Estimate Value of Collateral;
Default, Pre-Petition, Post-Petition, Number of Months, On Direct Payments, On Payments to Trustee;
Other Allegations, Lack of Adequate Protection, No Insurance, Taxes Unpaid, Rapidly Depreciating Asset, Other;
No Equity, Not Necessary For An Effective Reorganization, Other Cause, Bad Faith, Multiple Filings;
Debtor’s Statement of Intention Regarding the Collateral, Reaffirm, Redeem, Surrender, No Statement Filed.
After close scrutiny, you will notice that there are some additional line items that were not present in the prior version of the form. I think that creditors will have an easy time adjusting to the new, updated form.
There is nothing intuitive about filing amended schedules at the time of conversion from Chapter 13 to Chapter 7. You can spend an eternity looking for an event code on the bankruptcy clerk’s website that makes sense. For example, if you are looking for “amended schedules at time of conversion”, you will never find it. If you are looking for “conversion/amended documents”, you will never find it. You must look for “Schedule Post-Petition Debts Rule 1019″. Provided you stumble upon that event code, you will successfully file your schedules to the satisfaction of the clerk.
Importantly, you must remember to title your PDF just as written above. The standard amended schedules language provided by most bankruptcy software companies will not do.
Bankruptcy Code Section 727(a)(8): Debtor can receive a discharge under Chapter 7 of the U.S. Bankruptcy Code every eight years and a day.
Bankruptcy Code Section 1328(f): Debtor cannot receive a discharge under Chapter 13 of the U.S. Bankruptcy Code if he received a discharge in a prior Chapter 7 bankruptcy case filed within four years OR if he received a discharge in a prior Chapter 13 bankruptcy case filed within two years.
Bankruptcy Code Section 521(a)(1)(B): Debtor must submit payment advices within sixty days of filing bankruptcy; itemize the debtor’s monthly net income; disclose whether or not the debtor is anticipating any changes in income or expenses within the following twelve months.
There is an automatic dismissal for failure to submit the above items within 45 days. On the 46th day, the case is dismissed.
See Also: Chapter 7 Bankruptcy