Can I Pay My Family or Friends Back Before I File Bankruptcy?
Well, you can, but it’s probably not the best idea. Family members and friends for the fact of the matter are considered “inside” creditors, as labeled in the bankruptcy code 11 U.S.C § 101 (31)(A)(i). Because this is a loan from your family or friend and was never recorded, they are not looked at the same way as a regular creditor such as a credit card or a mortgage.
You are required to list any payments that you have made that are over $600 in your petition. But the court is going to look into where your payments went. Did you pay your mother back $800 and not any other creditors? If that is the case, the court could look at it as if you were playing “favorites” (meaning, you were choosing to pay her over another creditor) and the Trustee would have the right to go back to your mother and demand that she turn the funds that she took from you and give them to the bankruptcy Trustee for them to distribute to your creditors. Meaning that you and her both would lose out on the money.
As in any case, each case is different and if this pertains to your situation you will need to discuss it with your bankruptcy attorney, so that he or she may properly advise you.
What if Creditors Keep Calling After I’ve Filed Bankruptcy?
When you file bankruptcy, an “automatic stay” goes into effect against all of your creditors. The automatic stay, Section 362(a) of the U.S. Bankruptcy Code, among other things, prohibits creditors from contacting you to collect a pre-petition debt. In short, no more harassing phone calls from your creditors! This is one of many advantages the law offers to individuals who file Chapter 7 bankruptcy or Chapter 13 bankruptcy.
All of the creditors listed in your bankruptcy will receive notice within 5 business days when your bankruptcy petition is filed. This notice is sent to every creditor, both electronically and by mail. Generally, most creditors will stop all collection attempts immediately after they receive notice of the bankruptcy.
Should you receive phone calls from any of your creditors after you’ve filed bankruptcy be sure and let the creditor know you filed bankruptcy and provide them with your case number, the filing date and the name and phone number of your attorney. It is important that you document all of the phone calls you receive from the creditor by writing down the date and time you receive the calls and the name of the person you talked to. If a creditor continues calling you after you’ve informed them of your bankruptcy filing, they are in violation of the automatic stay and you should contact your attorney to let them know. Most likely your attorney will call the creditor and give them a courtesy warning to stop making contact with the debtor. At that point, if the creditor continues with their collection efforts by calling or sending you bills, your attorney may choose to file sanctions against the creditor for violating the automatic stay.
Will Bankruptcy Stop Creditor Phone Calls and Harassing Contact?
Yes, once a person has case number after filing either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, a creditor is prohibited from trying contact the debtor in any attempt to collect a debt.
What to Expect at the Creditors’ Meeting
Whether you are filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you will be required to attend a creditor’s meeting (also known as a 341 Meeting of Creditors). The Court schedules the date and time of your creditors meeting after your bankruptcy has been filed and a bankruptcy Trustee has been assigned to your case.
Who is a Bankruptcy Trustee and What Do They Do?
A trustee is an individual appointed by the federal government in charge of overseeing bankruptcy proceedings. Chapter 7 bankruptcy and Chapter 13 bankruptcy trustees are usually bankruptcy attorneys or accountants.
