How Are The Different Chapters Of Bankruptcy Different
Different Types of Bankruptcies Chapter 7 bankruptcy eliminates unsecured debt. Chapter 13 bankruptcy takes care of most of the debt, secured and unsecured, whether you pay off some or all of it. Chapter 11 bankruptcy provides temporary protection for high net worth companies and individuals as they restructure their finances.
Does Bankruptcy Clear Judgments
Does bankruptcy stop judgments? Does bankruptcy eliminate judgments? Yes, and yes.
A judgment results when a court rules in favor of a creditor, either because the debtor failed to respond to a lawsuit against him or her or the matter was fully and fairly determined by a judge or jury .
The majority of judgments stem from breach-of-contract actions brought in Texas state court. To learn more about different types of judgments, contact judgment collection attorney in Houston, Seth Kretzer. Chapter 7 or Chapter 13 bankruptcy can both clear court judgments, as further discussed below.
Filing Bankruptcy When The Car Accident Wasnt Your Fault
Auto accidents can be devastating physically, practically, and financially. In addition to causing personal injury, they can force victims to assume a great deal of debt that they may not be in a position to pay down. From medical expenses to repairing a vehicle, making up for lost wages and addressing property damage, the aftermath of a motor vehicle accident can be frustratingly expensive.
If the car accident you were involved in was either not your fault or less than 49% your fault, a personal injury attorney can help you to file an accident claim with the goal of obtaining a personal injury settlement from the at-fault party and/or their insurance company. However, not all legitimate personal injury claims are ultimately so successful that they result in the kind of damage award amount that the victim deserves.
For example, if you were the victim of a hit-and-run scenario, you may be unable to sue the at-fault party and/or their insurance carrier. Similarly, if the at-fault party doesnât have car insurance coverage, there may be no way to secure compensation to cover all the bills youâve incurred since the time of the accident. If this is the case, choosing to file bankruptcy may be the best option available to you.
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What Do You Do With A Judgment
You can pay a judgment or see if you can set up a monthly payment plan with the debt collector. Once the debt is paid, a satisfaction of judgment will be issued and put on public record to show you paid the debt. If you canât pay the debt, you might be able to get the debt discharged through bankruptcy. When you file your bankruptcy petition, youâll benefit from the automatic stay that generally stops civil judgments, wage garnishments, bank account holds, foreclosures, collection calls, and collection letters. Bankruptcy is also a preventative measure because debt collectors canât advance to the judgment stage and put a lien on real property or personal property while a bankruptcy case remains active.
What Are Some Different Bankruptcy Options
- Chapter 7: Liquidation
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Does It Matter If A Creditor Was Ignorant Of The Fraud
The short answer is yes. All the above discussion concerned cases where the creditor knew of the fraud but choose not to pursue it until after the bankruptcy. In those cases, the causes of action and evidence in support that was not used cannot now be used in a section 178 application. However, where the creditor demonstrates that they did not know of the fraud, and could not have reasonably discovered it until after the judgment debt, they are not barred from commencing an action to pursue this course, and if successful, would then have a judgment which survives the bankruptcy. In Royal Bank of Canada v. KIM the Superior Court of Ontario held that:
In my view the principle in Rodriguez barring a judgment creditor from leading evidence of conduct of the judgment creditor that would qualify under s. 178 unless the evidence was grounded in the process that produced the judgment debt is not applicable to a situation where the judgment creditor did not know of the debtors offending conduct and had no reasonable means of discovering it prior to commencing action and obtaining judgment.
What Can You Do About A Judgment Lien After A Bankruptcy Discharge
If a judgment lien survives a bankruptcy proceeding , then it continues to be lien on real estate and will attach to real estate acquired by debtor after the bankruptcy. Another way of thinking of it: the bankruptcy eliminated the debtors personal liability, but the lien still exists against any real estate owned or later acquired by the debtor.
There are several options for dealing with a judgment lien after bankruptcy:
- Attempt to re-open the bankruptcy case and address the lien. However, due to filing fees and attorney fees, this is often not the most cost-effective option.
- Wait until judgment lien expires. However, most judgment liens are valid for 20 years, so this could be a long wait.
- Pay the creditor. If the obligation to pay the debt has been discharged in bankruptcy, this would not make much sense, but it is still an option.
- File a motion in state court to eliminate the judgment lien.
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What Is A Writ Of Seizure And Sale Of Land
A creditor can file a writ of seizure and sale ofland against a debtor in any county or district where the debtor may own land. The writ would encumber any land presently owned or landwhich may be purchased in the future by the debtor in the county ordistrict where the writ is filed. If you wish to enforce the writ in morethan one location, you must issue a separate writ for each location and file itthere.
The writ of seizure and sale of land can be veryeffective in the long run since it will be difficult for the debtor to sell ormortgage the land until the debt is paid.
In addition, if another creditor has a writ filedin the same enforcement office against the same debtor and is activelyenforcing it, you will share, on a pro-rata basis , in any money paid into theenforcement office from any enforcement activity taken against thedebtor.
Note, however, that the enforcement office has ageneral duty to act reasonably and in good faith towards all parties. Theenforcement office can refuse to act if the estimated costs of executing thewrit of seizure and sale are greater than the debtors equity in the propertyto be seized.
The writ can be filed whether or not the debtorowns land at the time of filing. However, if you prefer not to file until youare certain the debtor owns land, for a fee you can do a name search at theland registry or land titles office located in the area where youthink the debtor may own property.
Paying In Installments Or Setting Up A Payment Plan
You may be able to pay your judgment in installments or set up a payment plan.
First, you can try talking to the creditor and see if they are willing to work out a payment plan with you. Remind the creditor that you want to pay but you just do not have the money to pay the judgment all at once. The creditor may decide they would rather have a little money at a time than nothing. If you work something out, make sure all the details are in writing. The agreement should include due dates, grace periods , if and how interest will accrue, where you should send the payments, what form of payment will be accepted, and who you should make the payments to. Make sure you keep detailed records and proof of your payments.
If the other side will not agree to a payment plan, you can try asking the court. You can file a motion to set up an installment payment plan. You will have to have the other side served so they can show up at the hearing if they want to oppose your request. The judge will make a decision at your hearing.
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How Does The Creditor Begin The Examination Process
The procedure is:
How Do I Serve The Bankruptcy Notice
You must serve the bankruptcy notice within six months of the date we issued it.
The person then has 21 days to comply with the notice from the date you served it.
Given the significant consequences of non-compliance with a bankruptcy notice, including potential bankruptcy proceedings in the court, you should consider personal delivery to the debtor. Court rules require that an affidavit of service of the bankruptcy notice be filed with an application for a creditors petition.
However, there are several ways you can serve a bankruptcy notice:
- personal delivery
You should seek legal assistance about the best method to serve a notice.
Paying The Judgment Creditor
You should make arrangements to pay the judgment immediately. If you do not pay, the creditor can start collecting the judgment right away. You can ask the judgment creditor to let you pay what you owe in weekly or monthly payments. This is the easiest way. Fill out the form Stipulation For Time Payments .The judgment creditor has different legal options available to collect the judgment from you if you do not pay on your own. If this happens, you will also be responsible for the costs that the judgment creditor spends to collect the judgment as well as accrued interest.
United States Bankruptcy Court
B) Notify the court of any change in mailing address — If a debtor has a change of mailing address, it is the debtor’s responsibility to promptly file a change of address form so that the Clerk’s Office, trustee, and creditors know where to mail documents to the debtor.
Download Form: Change of Address
C) Understand the Concept of Due Process for all Parties Due Process means that all parties must have the opportunity to prepare for the court hearing before the court makes a ruling. To prepare for a court hearing, a party must have time to prepare and review issues so that the party can determine the right action to take or which arguments to address. Bankruptcy court is not like television court programs. It is not appropriate to surprise the judge or surprise the trustee or creditor by showing up at a hearing with new witnesses or new evidence. The court only becomes involved when there are two sides that need a resolution. This means that the court AND the other party must be allowed to prepare for a court hearing. Therefore:
- A debtor must be presented with evidence in time to respond with its own evidence
- A trustee or creditor must be presented with evidence in time to respond with its own evidence and
- The court must be provided with evidence from all parties far enough in advance of a court hearing so that the court can properly review and consider all arguments and evidence.
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Do I Need Legal Advice Before I Attend A Contempt Hearing
A lawyer or paralegal is in the best position to advise youabout your legal rights and responsibilities. If you wish toconsult an Ontario lawyer or paralegal, you may contact the Law Society Referral Serviceoperated by the Law Society of Ontario. The Law Society Referral Servicecan provide you with the name of a lawyer or paralegal in your area, who will provide a freeinitial consultation of up to 30 minutes to help determine your rights andoptions. If you would like to be referred to a lawyer or paralegal, you may submit arequest to the Law Society Referral Service by completing the online requestform at www.lawsocietyreferralservice.ca.A crisis line is available Monday to Friday, 9:00 am to 5:00pm. The crisis line is intended for people who are unable to use the onlineservice, such as those in custody, in a shelter, or in a remote community withoutaccess to the internet. The phone number for the crisis line is 416-947-5255. Information about how to be referred to alawyer or paralegal through the Law Societys Referral Service is available at www.lsrs.info. You may also use the LawSocietys Lawyer and Paralegal Directory, which may be viewed at www.lawyerandparalegal.directory.
When Time Is Tight
The overlooked judgment lien usually pops up when you are ready to sell your home or to refinance it.
Often that means you are working to deadlines.
A motion to reopen and to avoid a lien is likely to take 45-60 days before you have a bankruptcy court order in hand, voiding the lien.
If you find yourself short of time, consider negotiating for the escrow to hold the money that would otherwise go to the holder of the lien when the deal closes, while you go back to bankruptcy court.
If you didnt check the public record before you filed your bankruptcy case to check for judgment liens, do it now. Dont wait for a time crunch.
Thankfully, bankruptcy courts are accustomed to helping with the overlooked lien.
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Why A Judgment Lien May Not Be Troubling
A judgment does not last forever. In the event that the judgment is considered a lien against your property, you may not be concerned if you dont intend to sell the property before the judgment expires.
Judgments expire in 10 years under both California and New York laws. In both states, however, the creditor can apply for an extension of the judgment to get 10 more years to collect the debt.
In addition, if youre in New York you have the option of going back to state court to seek a discharge of the judgment after a certain amount of time has passed since your bankruptcy discharge. Learn more about that here.
If you go through Chapter 7 bankruptcy and have a judgment but dont expect to need to sell your property within the time thats left for enforcement, you may decide to do nothing. Its a decision you need to make with your bankruptcy lawyer.
I Have To Complete A Financial Information Form And Give A Copyto The Judge At The Examination Hearing What Happens To It After The Hearing
The judge at the examination hearing may considerthe information you provide in the Financial Information Form and anysupporting documents when making a decision at the examination hearing. Youshould ask the courtroom clerk to return these documents to you after thehearing has finished because they may not be available for you to pick up afterthe hearing. The Financial Information Form and supporting documents do notbelong in the court file. Court files are available for public viewing, unlessan order of the court provides otherwise.
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Opposing The Sale Of Your Home Or Other Real Property
If you do not pay the judgment, the judgment creditor can sell your real property. The judgment creditor can get an order to sell your land, buildings, or home. Before your home can be sold, there must be a hearing to let you prove that you or your family live there. The judgment creditor must give or mail to you a copy of the Order to Show Cause, Application for Sale, and Notice of Hearing on Right to Homestead Exemption and personally serve the occupants of the home at least 30 days before the hearing.
READ THESE PAPERS CAREFULLY. You may be able to stop the sale or keep some of the money from the sale. The purpose of the hearing is to decide if your home should be sold and if you qualify for a homestead exemption.
For more information on homestead exemptions:
- Read the Code of Civil Procedure on homestead exemptions beginning with Section 704.710.