Some Common Questions About the Meeting of Creditors

What do I need to bring?

You will always need to bring your Social Security card and a valid, government-issued photo ID. If you can't find your Social Security card, you can bring an original W2, but not a copy. The Trustee will not hold your meeting without these, so don't forget!

Where are the Meeting of Creditors held?

For Chapter 7 cases in Allegheny County, the meeting will be held on the 7th floor of the Liberty Center in downtown Pittsburgh. 1001 Liberty Avenue, Pittsburgh, PA 15222. For Chapter 7 cases outside Allegheny County, the locations differ. Make sure to verify with your attorney before the meeting.

Chapter 13 Meeting of Creditors are held downtown in the US Steel Building, 32nd floor. 600 Grant St., Pittsburgh, PA 15219.

What should I wear?

There are no formal requirements, but you should at least dress in business casual. No Steelers jerseys!

Am I going in front of a judge? Is this in a court room?

Nope, you will go in front of a trustee, who is an attorney who reviews your case and asks you some simple questions about your filing. The meeting is held in a conference room, not a court room. Don't imagine this as a courtroom drama right out of a television show. It is a simple, straightforward affair.

Will my creditors be there to ask me questions?

Very rarely. The trustee sits in their place. It is rarely worth the creditors effort to attend, as there is very little they can do if your case is properly filed. If they do show up in a Chapter 13, it is usually to make sure there claim is being allowed (claims are what the creditors say you owe).

I will review the questions asked by the trustee several days before the Meeting of Creditors. While this meeting is fairly informal and should not cause anxiety, it is a hearing held under oath. I always tell my clients, as long as you tell the truth and don't hide anything from the trustee, there is nothing to worry about! The meeting is mostly a review of what you have already confirmed and filed, so there shouldn't be any surprises as long as you have been thorough.

Contact us if you have any questions about your Meeting of Creditors.

Can I Keep a Credit Card in Bankruptcy?

A common question asked by my bankruptcy clients before filing is, "can I not include one of my credit cards in my bankruptcy and keep it?" The reasons differ. Most people want to keep a card in case of an emergency, or at least for convenience. Some want to keep it for travel. Sometimes, the reason is pure nostalgia. "I've had it since I was a teenager!"

Unfortunately, regardless of the reason, the answer is always "no." Credit cards may never be retained in a consumer bankruptcy. The reason is that creditors of the same class must always be treated the same. If you pay back one credit card, you must pay them all back. If you keep one, you must keep them all. Otherwise, the credit cards not being repaid through your bankruptcy will object to your filing, basically asking, "hey, if they are getting paid, why aren't we?"

Closing out all of your credit cards isn't a big deal in Chapter 7 bankruptcy. You will be able to apply for credit cards several months after filing when your case is discharged. Whether or not you want to may be another issue. Many of my clients profess they never want to use another credit card, and while I encourage them to eventually get one to rebuild their credit, I can understand the sentiment. But, in any case, you will be able to access new credit before very long.

The issue is a bit trickier in a Chapter 13 bankruptcy. These bankruptcies last 3 to 5 years, and you are not permitted to use credit cards during this time. All of your credit cards will be closed. This makes planning and savings important in a Chapter 13 bankruptcy. You will need to maintain savings in case of emergency, as you will not be able to access quick credit. Debit cards will need to be used primarily for convenience (most people don't want to carry around large amounts of cash or trying to pay with checks). The advantages of Chapter 13 bankruptcy far outweigh this inconvenience, but it is something worth planning for and considering.

Not having a credit card for awhile can be an inconvenience in a modern economy, but given the advantages offered by filing bankruptcy, it should be seen as a temporary disruption for the greater good.

Contact us if you are facing large credit card debts. While you can't keep them, it is more important to remember that you can make them go away!

Does Bankruptcy Affect My Utilities?

Debts owed to utilities are dischargeable through bankruptcy. This is good news for anyone facing large, past-due bills for gas, electric, cable, or cell phones. However, many of my clients considering bankruptcy are concerned that including a utility in the bankruptcy will result in the service being denied in the future.

Fortunately, the bankruptcy code prohibits a utility from denying service to bankruptcy filers. Not that they would probably even want to... most bankruptcy filers get current and stay current after filing. The utilities would be denying good customers.

However, the bankruptcy code does allow utilities to require a security deposit after filing. Most utilities in western Pennsylvania do not bother with this requirement. The lone exception is Duquesne Light. Duquesne Light will normally close out your account when a bankruptcy is filed, whether or not you have a past-due account. They will require a security deposit (sometimes rather large) for service to continue. I let my clients know beforehand so they can plan accordingly. Once again, no other utilities in western Pennsylvania require this at this time.

If you are current with your cable, cell phone, gas, or water, you can continue making payments as normal, and your service will not be affected. If you are facing a shutoff, the bankruptcy automatic stay will stop the shutoff, so sometimes it is important to act quickly.

It is always worth checking before filing a bankruptcy to see if you have older bills, especially with cell phone or cable companies. Old cell phones bills from college or earlier sometimes linger. Cable bills and expenses are sometimes forgotten after several moves, as it is easy to forget to end the service or return equipment.

Contact us to discuss your options if you have issues with old utility bills or you are facing a shutoff.

Don't Transfer Property Before Filing Bankruptcy!

A big mistake people can make before filing bankruptcy is to transfer property to a friend or relative for less than full value before a bankruptcy. This could potentially be viewed as a fraudulent transfer. If you are considering filing a bankruptcy, make sure not to transfer property before speaking with a bankruptcy attorney.

Why is this an issue? Bankruptcy law allows you to exempt or protect personal property when filing. The purpose of the bankruptcy exemptions is to allow a true fresh start by permitting the debtor to keep property necessary to make a living and get back on their feet. However, these exemptions are not unlimited. While the exemptions are sufficient to protect the value of most debtor property, sometimes they do not protect everything.

This is potentially a problem for debtors who own their home outright or owe very little. This is more often the case with older clients who have been paying down their home for decades. Individual debtors may only protect $23,675.00 in equity in their home (joint debtors up to $47,350.00). If your home exceeds these limits, you would need to repay money through a Chapter 13 bankruptcy, and Chapter 7 bankruptcy will no longer be an option.

Some individuals think a way around this is to transfer the property to a friend or family member before filing. The Bankruptcy Court will not allow this. In fact, if you filed a bankruptcy after such a transfer, the Court can actually un-do the transaction. Most Trustees will ask if you have transferred property in the last 4 years before filing, and you are required to answer truthfully under the penalty of perjury. Trustees may also do property searches and look back even further. The bankruptcy petition specifically asks if you have transferred property into a self-settled trust in the last 10 years. In any case, you do not want to attempt to hide such a transfer.

It's safest to avoid all transfers of property in the months (and even years) leading up to a bankruptcy, even small, innocuous transfers. If you have transferred property, it may be transferred back before filing. Or, a Chapter 13 bankruptcy can be filed on the property as if it had never been handed over in the first place. When in doubt, hold on to the property until speaking with a bankruptcy attorney. There are options if property has been transferred, but it could make things difficult.

Contact us to set up a free consultation and discuss how to properly protect your property..

Labor Day

Labor Day may be the unofficial end to summer, but with temperatures pushing into the 80s, it sure doesn't feel that way. It's a great day to relax and forget the purpose of the day (work!).

As a bankruptcy attorney, people often ask me how many of my clients work. The answer? Virtually all of them! Bankruptcy is an option to help hardworking people more than anyone else. Hardworking people have things to lose, and people to protect, and the bankruptcy process will guard both.

The vast majority of my clients are hardworking people who hit one or two common hardships. The most common is medical bills. This country doesn't do a great job of providing reliable health care for working class citizens, and one or two major medical situations with sub-standard health coverage can push anyone into bankruptcy. Fortunately, medical bills are dischargeable in both Chapter 7 and Chapter 13 bankruptcy. With medical bills often reaching in the tens-of-thousands of dollars or more, bankruptcy is often the only option. Otherwise, these bills will stop you from moving on with your life.

Temporary job loss can also result in bankruptcy, and this can happen all too often in a fluid and recovering economy. Bills can pile up fast in a few short months, especially with interest rates on loans and credit cards well in the double digits. Missed mortgage payments can be paid through Chapter 13 bankruptcy, allowing me to even stop sheriff sales. It is a situation I have seen countless times. Someone is laid off for as little as three or four months, unemployment can't cover the mortgage or credit card payments, they go back to work (sometimes for a reduced salary) but it is too late. The bills are beyond control.

Another common scenario leading to bankruptcy for working individuals is divorce and marital separation. Expenses that were once split must now be paid in full. Two salaries become one, and sometimes all of the bills can't be paid. Divorce can also lead to massive legal bills. Living situations that were feasible while married can fall apart quickly with divorce. Divorce is bad enough on its own, but when it destroys your finances, it makes life that much more difficult. Bankruptcy can help.

Labor Day is a great time to relax and unwind. If you are hardworking and facing debt issues, related to the examples above, or caused by some other misfortune, contact us to discuss your options and see if bankruptcy may provide you with some relief. In the meantime, enjoy summer while it lasts!