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Changes to Official Bankruptcy Forms Effective and Mandatory on December 1, 2015

2015 Bankruptcy Forms Overview

Most Official Bankruptcy Forms were replaced on December 1, 2015 with substantially revised, reformatted and renumbered versions.  The new forms are now accessible on the Forms page to download or view them, click here.  To access the revised Court Manual, click here.

To view the Forms Number Conversion chart, click here.  To access additional information about the new forms, including Committee Notes, click here

This video presentation highlights and reviews form changes.


 BANKRUTPCY OVERVIEW



Filing Bankruptcy is one way to obtain a judicial determination of which assets of a debtor can and can not be executed to enforce a judgment (or, in the case of bankruptcy, any claim, even if not yet reduced to a judgment).


There are several types of Bankruptcy proceedings

BANKRUPTCY CHAPTERS AVAILABLE TO INDIVIDUALS


CHAPTER 7 (Liquidation):

Non-exempt assets (see exemptions) of a debtor may be sold (liquidated) for the benefit of creditors. In most individual cases all of the debtors assets would be exempt from liquidation. This is a "No Asset" case.


CHAPTER 13 (Adjustment of Debts--Individual):

The debtor proposes a plan, requiring Court approval (confirmation), whereby the debtor submits a budget, together with a plan (Wage-earner plan) proposing how they will use their best efforts to apply non-essential income to paying down their debts. There are several requirements which must be met before a Chapter 13 Plan will be confirmed by the Court.


CHAPTER 11 (Reorganization of Debts--Individual):

While Chapter 11 was written primarily with business entities in mind, it may be utilized in some circumstances for individuals, however this is extremely infrequent.
  

DISCHARGE

The goal of any type of personal bankruptcy (for an individual) is a FRESH START FINANCIALLY. This is achieved through the Bankruptcy Code by a discharge of their debts.

A "Discharge" simply means that those debts affected would become unenforceable by those creditors to whom those debts were owed.

Unenforceable means that those creditors are prohibited from using any method to collect upon those debts [phone calls, letters, lawsuits] or from enforcing judgments they may already have [taking wages, bank accounts, liens, etc.]. Such activities or procedures which have already begun would be stopped by the bankruptcy, and those done recently may be set aside or reversed.

Certain debts are not dischargeable:
1. Certain Taxes
2. Debts which were fraudulently incurred.
3. Creditor not notified in time to file a claim (if such a claim would otherwise result in a disbursement to that creditor)
4. Alimony/Child Support
5. Debts agreed to be paid in the course of a divorce
6. Debts incurred through intentional wrong doings.
7. Criminal fines and penalties (including restitution).
8. Most Student Loans
9. Certain Liabilities incurred while driving under the influence of drugs or alcohol.
10. Debts not discharged in a prior Bankruptcy.

The debtor will receive a discharge of dischargeable debts at the end of the case (about five months after filing for Chapter 7; at completion of the plan for Chapter 13, usually 36 months).

 

AUTOMATIC STAY

Bankruptcy protection starts immediately, this is called the "automatic stay". The automatic stay serves two purposes.

1. It immediately protects the debtor from ALL activities of creditors. This gives the debtor some "breathing room".

2. It also protects the creditors from each other -- by preventing a first-come-first-serve attack on the assets, if any, of the estate; and promotes an orderly distribution of those assets, if any.

Before taking any action against a debtor or a debtor's assets after a petition is filed a creditor must first obtain permission from the Court -- called "Relief from Stay". This relief is granted only after request by the creditor made by filing a "Motion for Relief from the Automatic Stay".

When you file for Bankruptcy protection under any of the chapters available to individuals, you will immediately stop not only creditor calls and letters, but will also stay pending or threatened lawsuits, real-property foreclosure proceedings --including sale, repossessions of automobiles and other secured property, wage garnishments, and IRS and State Tax levies

 

SECURED AND UNSECURED CREDITORS

There are generally two types of debts incurred by
individuals: secured and unsecured.

Secured creditors may have rights to repossess some asset belonging to the debtors pledged as collateral or security for their extension of credit.

Unsecured creditors have no other recourse than to obtain a judgment against the debtor and enforce that judgment. For example, credit cards, loans, hospital and medical bills, even legal bills and accident liability in most cases.

It is possible that an unsecured debt can become secured if a creditor obtains a judgment lien.

Some such liens may be set aside by the debtor during the pendency of their bankruptcy case by filing a motion.

It is also possible that a secured debt becomes unsecured upon loss or destruction of the collateral.

Debts may be partially secured and partially unsecured.

Unless otherwise non-dischargeable, unsecured debts will be discharged at the conclusion of the bankruptcy case.

Property subject to a valid security interest may be redeemed by the debtor by payment of an agreed price, or surrendered back to the creditor with no further obligation by the debtor, or the debt may be reaffirmed by the debtor if such reaffirmation will not subject the debtor to undue financial hardship.

 

The Bankruptcy Panel Trustee who is appointed to the case will examine the debtor's estate to determine if there are any assets available for liquidation in a Chapter 7 and/or income available for plan-confirmation in a Chapter 13.

In a Chapter 7 case the trustee may liquidate (sell) assets belonging to the debtor which are not "exempt" from such liquidation.

While Bankruptcy is Federal Law, Congress has left it up to the States to determine what residents of that state may keep even though they have filed a bankruptcy petition -- that is, exempt from sale. California has two sets of exemptions to choose from.

Before filing a petition in Bankruptcy it is very important to select which set of exemptions best protects those assets held by the debtor. The attorneys at the Law Offices of Kaufman & Kaufman will analyze your case and determine which set of exemptions best protects your property from sale by the trustee.

In most cases we are able to incorporate exemptions which will protect all of a debtors assets.

Some pre-bankruptcy planning regarding exemptions is
allowable.

 

 
 
 
 
 

THE BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005 (BAPCA)

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCA) makes the most sweeping changes since 1978, affecting both consumer and business bankruptcies.

Applying to all cases filed on or after October 17, 2005 BAPCA implements several significant changes to existing bankruptcy law, such as making it more difficult for individuals to file a Bankruptcy Petition under Chapter 7, including the addition of a Means Test and pre-filing credit counseling and pre-discharge debtor education classes.

Our office will help in guiding our clients through the requirements of BAPCA.


Please call our office at (714) 550-9305 to schedule your free consultation with an attorney to discuss these changes in the bankruptcy law.

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