Do I Need to Include a Creditor on My Bankruptcy If There Is No Balance on the Account?
If you have a credit card or a loan with a zero balance, it is a personal decision whether you include them on your bankruptcy. If there no balance, it may not be necessary to include them on your bankruptcy filing; however, it may be in your best interest to include them should there be any fees or interest charges that were placed on your account during the most recent billing cycle.
Regardless of whether you include the creditor on your bankruptcy, the creditor will most likely find out about your bankruptcy filing and terminate your privileges with them. For example, if you have a line of credit with no balance, you will most likely be unable to take any future draws on the line of credit. The same would apply with a credit card. Although you did not include the credit card company on your bankruptcy, they will most likely terminate your card. As a result, attempting to make charges on the credit card after filing bankruptcy could lead to an embarrassing event.
If you have a credit card you would like to retain and use after filing bankruptcy, you will need to contact the credit card company in advance of filing bankruptcy and determine if their policy would allow you to keep the card. A few companies have been willing to allow you to continue to use the credit card after filing bankruptcy; however, that is the exception. Do not wait until after your bankruptcy has been filed to contact the creditor, since they will most likely not be willing to speak with you. In addition, if you fail to include them in your bankruptcy filing and determine there was a balance on the account, you may be charged fees to add them to your bankruptcy. As a result, it is always the safest approach to include the creditor on your bankruptcy filing regardless of whether there is a current balance.
Am I Responsible for the Loan On My Car If I Voluntarily Turn it In?
You will still be responsible for the loan or debt on your vehicle even if you voluntarily turn it in. If you have a vehicle that you cannot make payments on, you have the choice of voluntarily surrendering the car or you can let the creditor repossess it. What many people do not know is voluntarily surrendering the vehicle is still considered a reposession on your credit report, a voluntary reposession.
Can A Person Incarcerated File Bankruptcy?
A person who is incarcerated can, in fact, file for bankruptcy. However, there are some extra steps that will have to be taken.
Since a person who is in prison obviously cannot leave, they must file a power of attorney so that a friend or family member can meet with the bankruptcy lawyer who is intending to file the bankruptcy. This would have to be done as soon as the incarcerated person decides that a lawyer needs to become involved. This is because the lawyer will need power of attorney information from the very beginning of the meetings in order to discuss anything with the friend or family member.
One of the things that is required when filing bankruptcy is the debtor has to take the credit counseling course and financial management course. Since a person who is incarcerated most likely will not have regular access to the internet, a motion must be filed by the attorney to waive the requirement to take these courses.
There is also one other motion the attorney will most likely have to file. Since the incarcerated person will not be able to attend the 341 Creditor’s Meeting, a motion will have to be filed stating the reason that the debtor cannot attend.
All of this information is based on the debtor being in the Western District and Middle Districts of North Carolina. Most likely some of these steps will be the same in different districts, but be sure to check with your attorney because there very well could be different requirements.
Are Debts Ordered in a Separation Agreement Dischargeable in Bankruptcy?
When the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) became effective October 17, 2005, debts ordered in a separation agreement, divorce decree or other order of the Court became non-dischargeable. This can be reviewed in detail at 11 U.S.C § 523(a)(5) and 523(a)(15). Domestic support obligations, inclusive of alimony, child support and other debts ordered to be paid by the court, cannot be eliminated in bankruptcy regardless of whether it is ordered before, during or after the date of the bankruptcy filing. In addition, the debts cannot be eliminated regardless who is owed the debt – spouse, ex-spouse, child, guardian of the child or a governmental unit. 1 U.S.C § 101(14A).
If you are in the process of a separation and divorce, it is important to understand what you are obligating yourself to pay prior to signing the paperwork. A couple of common examples are provided below:
Example One: You and your soon to be ex-spouse have a credit card with a balance of $10,000. You and your spouse incurred this debt when trying to start a business. During the negotiations of the separation agreement, you decide to take responsibility for the credit card. You feel this is the right thing to do since you pushed the development of the business. In this case, your spouse is “held harmless” for this credit card balance. As a result, you must pay this debt.
Example Two: You and your ex-spouse own a home. Your ex-spouse and two children live in the home and want to continue to live in the property. Both of your names are on the first mortgage loan but only your name is on the second mortgage. You have agreed in the divorce decree to pay the mortgages on the home until your youngest child graduates from high school. Once again, since you took responsibility for the debts under the divorce decree, you cannot file bankruptcy to eliminate the debts on the two loans. You are now solely responsible for the debt on the house.
There are obviously many examples, but these are two of the more common scenarios we see at Duncan Law. Again, it is extremely important to assess your ability to pay prior to accepting responsibility for the debt¸ since it will not be dischargeable in bankruptcy.
