Filing for bankruptcy can provide relief from debt collection. The automatic stay generally stops most collection activity, but exceptions apply and the protection may be limited or lifted. Utility-service protection is also conditional; you may need to provide adequate assurance of payment for service after filing. Sources: Western District automatic stay guide; 11 U.S.C. § 366(a)–(b).
Errors in bankruptcy papers need prompt attention. Some can be corrected by amendment, but eligibility for discharge is a separate legal question. The available options depend on the error and the circumstances. Here are five common problems to avoid. Sources: Fed. R. Bankr. P. 1009(a), p. 8; 11 U.S.C. § 727.
- Filing the wrong chapter. Chapter 7 eligibility and the means test require a case-specific review. For individuals with primarily consumer debts, the means test can create a presumption of abuse, subject to statutory exceptions and possible rebuttal. A court may dismiss an abusive Chapter 7 case or, with the debtor’s consent, convert it to Chapter 11 or 13. Filing under an unsuitable chapter does not mean that dismissal is automatic. Sources: 11 U.S.C. § 707(a)–(b).
- Not completing your counseling requirements. Credit counseling generally must occur during the 180 days before filing. Debtor education is a separate course taken after filing and generally required before discharge. Limited exceptions apply. Debtor education must last at least two hours; the two requirements are not one one-hour course. Fees and delivery options vary, and free or reduced-fee services are available based on ability to pay. Use approved providers and meet the applicable filing deadlines. Sources: 11 U.S.C. § 109(h); U.S. Trustee Program credit counseling FAQs; U.S. Trustee Program debtor education FAQs; U.S. Courts discharge guide.
- Not using your exemptions properly. Exemption mistakes can leave property unprotected, but they do not automatically prevent a discharge. The exemptions available to you depend on applicable law, including domicile rules. Where a choice is available, the federal bankruptcy exemptions and the alternative state-law framework are different systems; you cannot simply select individual exemptions from both. An attorney can assess the available exemptions and the risk to your property. Sources: 11 U.S.C. § 522(b); 11 U.S.C. § 727.
- Not attending the meeting of creditors. The 341 meeting is conducted by a trustee, not a judge. You must attend and answer questions under oath; creditors may attend and ask questions too. Almost all meetings are held virtually, so follow your notice and trustee’s instructions. Missing the meeting can lead to dismissal. In the Western District of Washington, the U.S. Trustee may apply for dismissal after a debtor fails to appear. Contact your attorney promptly if you cannot attend. Sources: U.S. Trustee Program 341 meeting guide; Western District LBR 1017-1(e).
- Not including all your assets or debts. It’s your trustee’s job to make sure everyone in your case is following the rules. If you don’t, you could have your case dismissed, or even face fines and jail time for fraud. In bankruptcy, you’re not only obligated to list all the debts, you have to list everything. If there’s a debt you want to continue to pay, you’ll have a chance to say that. Certainly do not omit assets, and even money you believe you have coming your way, such as trusts or inheritances. Failure to do so has big consequences.
Over the past 34 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can review whether bankruptcy may help stop your garnishment and address your debts through a repayment plan. Sources: 11 U.S.C. § 362(a)–(d); U.S. Courts: Chapter 13 bankruptcy. If money has already been garnished, recovery may be possible in some cases, depending on the timing of the transfers, applicable exemptions and other legal requirements. A refund is not automatic or guaranteed. Sources: 11 U.S.C. § 547(b)–(c), (e)–(g); 11 U.S.C. § 522(g)–(i); 11 U.S.C. § 550(a). But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.
