Well…not necessarily. You might have to worry a bit more about your utilities, especially if you are still receiving service from the same company to whom you owe that past debt.

Utility service in bankruptcy is governed by section 366 of the Bankruptcy Code. Normally, efforts to collect a past-due debt after a bankruptcy filing are stalled by the automatic stay. But when that creditor is a utility, they have the right under section 366 to an adequate assurance of payment.

This assurance of payment generally takes the form of a deposit, usually two times the amount of an average monthly bill. The deposit would have to be paid within 20 days after the bankruptcy filing. If the deposit is not paid in time, the company may discontinue service to the debtor.

So the upshot is that if you owe a utility that you are currently using more than twice your average monthly bill, it might be worth discharging your past-due debt to that utility and paying the deposit. If you owe less than twice your average monthly bill, you are probably better off paying off the debt to the company before filing (less than $600 is best, due to preference payment issues) and keeping current on your utility bills at all times.

If you owe a lot of past-due debt to the utility and you cannot afford the deposit that they are demanding after your bankruptcy filing, you have the option of filing a motion with the bankruptcy court to ask for a lower deposit amount.

It’s best to discuss these issues with your bankruptcy attorney before filing. Ask your attorney to explain your options regarding all types of past-due debt and to recommend a good course of action based on your individual situation.

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First, don’t worry. Remember – most, if not all, of your debts are on file somewhere – in your consumer credit reports. It is possible to pull your credit report from each of the three main consumer credit reporting agencies and find out what your creditors have reported with regard to what, and whom, you owe. These three agencies are Experian, Trans Union, and Equifax.

But what if you think you already know exactly who you owe and how much you owe them, prior to filing for bankruptcy? It is still a good practice to pull your credit reports before you file, anyway.

You should pull your credit reports because you may have forgotten a debt, a creditor may be reporting that you owe more than you think you do, and/or one or more of your debts may have been sold to a debt buyer without your knowledge. This is just a good due diligence practice.

The official site for free credit reports from all three credit reporting agencies is annualcreditreport.com. You don’t need to use the ones you see advertised on TV – they will cost you some money, possibly every month. So watch out what services you might be signing up for when you are surfing the net looking for credit report sources.

If you are going to hire an attorney to help with the bankruptcy, speak to that attorney first before you go to the trouble of pulling the reports, unless you just want to see them anyway. The attorney may already have a credit reporting service they want to use. Tell the attorney that you want a copy of the credit report they pull for you. Or, they may want you to pull your own reports first, before starting on your bankruptcy case. Different lawyers go about the preparation of a bankruptcy case in different ways.

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The means test is like a big IRS form with spaces for plugging in certain numbers and checking off boxes. If you’ve filed for bankruptcy in years past, you may not have seen it. The form was introduced as a result of the new bankruptcy legislation that Congress passed in 2005, which created more hoops for individual bankruptcy filers to jump through.

It has two main parts: The first determines whether your earnings are above or below median. The second is for those who are above median – it lets you take *certain* deductions from your income in an attempt to lower it to the point where you can qualify for a Chapter 7.

Obviously, it’s preferable not to have to fill out the second part of the Chapter 7 means test.

Those whose earnings vary during the year might be in a better position with regard to the means test than those with steady over-median earnings. Examples of people with variable pay over the course of a typical year include teachers, college professors, those who work solely or primarily on commission, and those who periodically claim unemployment insurance benefits because of temporary jobs or seasonal employment.

Many people credit their variable income for getting them into debt trouble to begin with, since they aren’t always able to afford their monthly payments steadily throughout the year.

How can earnings that vary over the year possibly be to your benefit? Because the means test only includes the earnings you received during the 6 months before your bankruptcy filing. If that prior 6 months encompasses a part of the year during which your income was lower, you have a better chance at your pay being below the median and qualifying for a Chapter 7.

So when considering the question of when you should file, think about filing soon after a period of lower income.

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Why do I ask about real estate? For starters, I ask about real estate because the Chapter 7 trustee who reviews your case is likely to ask you at your meeting of creditors whether you’ve ever owned real estate. If you say yes, the trustee will want to know what you did with the real estate, how much it’s worth, and so on. I like to know the answers to important questions like these before they pop up at the meeting of creditors so that if there are going to be any potential problems, we can address them ahead of time.

What are some potential problems with real estate ownership that could crop up? One example is that even in this economy, you might have equity in your real estate – i.e., it might be worth something – and the amount of equity you have in the property can take up some or all of the limited exemptions available to you. This can have an effect on how much property (including personal property) you’d be allowed to keep after the bankruptcy.

Also, if, for whatever reason, you gave away your real estate – including signing it over to someone else (like a relative) just because you couldn’t afford the mortgage payments anymore, you are likely to have a problem. A transfer like this can look like a fraudulent transfer prior to bankruptcy.

In case you’re thinking ” I didn’t commit fraud,” the term “fraudulent transfer” as used in the bankruptcy setting is a specific legal term that has a specific meaning and is defined broadly in the law. It does not necessarily require intent to commit fraud. It’s just that Congress decided it didn’t like the idea of people dumping assets before filing, probably because it didn’t want people trying to look poorer when they had assets they could have sold to pay their debts but gave away those assets instead.

As a result, I like to ask people about real estate ownership. In case you are thinking of not disclosing current or prior real estate ownership to your attorney, think again – the trustee can take steps to independently research your property ownership situation and find things out. It’s better for everyone that you disclose everything to your attorney so that they can help you figure out the best course of action before you file for bankruptcy.

If you are in NJ and thinking of filing for bankruptcy, consider calling Jennifer Weil for a free telephone consultation to discuss your financial situation at 201-676-0722.

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This is what something called “exemptions” are for. The way I explain it to clients is this: When you file for bankruptcy, something called the “bankruptcy estate” is created, kind of like the estate that is created when someone dies. Everything in the that estate temporarily comes under the Chapter 7 trustee‘s control. The trustee can sell estate assets to pay off your creditors. If something is NOT in the bankruptcy estate, it will not come under the trustee’s control.

How do you keep your stuff out of the bankruptcy estate? You list all it in your filing. Then you cite to the statutes allowing you to exempt each item from the estate. The laws allowing you to keep property out of the bankruptcy estate are generally called “exemptions”.

Does that mean you can exempt anything from the bankruptcy estate, no matter how expensive the it is? NO. Unfortunately not. Exemptions are limited. And they vary greatly by state.

How are exemptions limited? Generally, they are limited by type of property and by amount. For example, you might find that the statute that applies to jewelry might be limited in amount to $1500. This means you could exempt only $1500 worth of jewelry from your bankruptcy estate (that’s just an example – I made it up, so don’t rely on that statement for jewelry!). Limitations like this can make it difficult (and sometimes impossible) to exempt very valuable items like real estate, newer cars, or valuable collectors’ items.

How do you value your items? Generally speaking, you value your property by determining its resale value – how much could you get for it at a garage sale or on an auction website?

How do I exempt items that I don’t want to list in my papers? You don’t. Unlisted property is not exempted.

The bottom line is that you need to speak to a bankruptcy attorney in the state where you live to find out what the exemptions limitations are. And don’t make the mistake of transferring property to someone else just to keep it out of the bankruptcy estate.

If you are in New Jersey and need a bankruptcy attorney for a potential Chapter 7, please call Jennifer Weil at 201-676-0722 for a free telephone consultation or email me at jweil@jenlawyer.com.

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But I decided to list a variety of things that will help kick-start your bankruptcy case. Here are fourteen of them:

1. Gather your last 6 months’ worth of paystubs or other proof of income;

2. Have ready the details of your last bankruptcy filing, if any, including the date of filing and the case number;

3. Gather your last 3 to 6 months’ worth of credit card statements and bank statements from all accounts, including checking, savings, retirement, CDs, IRAs, investment accounts, money market accounts, etc.;

4. Gather all the collection letters that you have received in the past few months;

5. Gather copies of all bills on which you are behind in paying;

6. Gather basic information on these types of debt (if you still owe them, even if you’re current on payments): Student loans, back taxes, alimony, child support, criminal fines and restitution; debts resulting from fraud; and divorce or property settlement debt;

7. Gather information regarding any cash advances or balance transfers you had in the past few months;

8. Get a copy of last year’s tax return or tax transcript;

9. Gather information on all of your most valuable property, such as expensive jewelry;

10. If your last year’s tax filing is overdue, file that return so the amount you owe or the refund you are owed can be determined;

11. If you own real property, gather the deed and mortgage and home equity loan papers;

12. If you have a car, gather any loan documents or lease documents on that car;

13. If you have any secured debt, gather the papers relating to it;

14. Get your picture ID and your Social Security card or other proof of your Social Security number;

Remember, disclosure is a key to a successful bankruptcy case. If you don’t disclose, you may not get all the exemptions to which you are entitled. Tell your bankruptcy lawyer everything about your financial situation, especially if you borrowed money from a relative.

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If you are in New Jersey and considering bankruptcy, please call Jennifer Weil for a free telephone consultation at 201-676-0722.

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The answer is that there is no minimum debt amount required to file a Chapter 7 bankruptcy. A more important issue is whether you earn enough income to pay off your debts.

If you earn enough money to pay your debts off over time, you may have difficulties successfully filing a Chapter 7 bankruptcy. So you should look at your debts in proportion to your income to determine whether you can pay off your debts over time while still paying your reasonable housing and food expenses.

If you are concerned about being eligible for a Chapter 7 bankruptcy in New Jersey, please call 201-676-0722 for a free consultation or email jweil@jenlawyer.com.

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Once the meeting of creditors takes place and assuming there are no complicating factors in your Chapter 7, it’s about 60 days before you receive your bankruptcy discharge of all your dischargeable debts.

Regarding how long it takes from the time your hire an attorney to begin the process up until the time of filing, a lot of it depends on your individual situation. If you have loose ends that need tying up, such as an unfiled tax return from a prior tax year, you will probably need to get these things taken care of before you can file.

Also, it may take people some extra time to gather all of the documentation required for an attorney to complete the bankruptcy papers. And some attorneys may take installment payments for their attorney fees, which can delay the filing date, since all attorneys fees must be paid before a bankruptcy can be filed.

Chapter 13 bankruptcies, on the other hand, can take anywhere from 3 to 5 years to complete, since a Chapter 13 involves making monthly payments over time to your creditors.

If you think you might need a bankruptcy attorney in New Jersey, please call me at 201-676-0722 for a free telephone consultation.

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Instead, every Chapter 7 case will be scheduled for a meeting of creditors, which does not take place in a courthouse. In Newark, New Jersey, the meetings of creditors take place in a downtown office building. Most large creditors (such as credit card companies) typically do not show up for these meetings, which usually only last about 5 minutes.

At the meeting of creditors, the trustee assigned to your case will ask you a series of questions regarding your bankruptcy while you are under oath.

But sometimes, a bankruptcy case is more complicated than average and a court hearing might be needed. David Harris, a Pennsylvania bankruptcy lawyer, provides a good outline of some instances when a court appearance might be required.

If you are in New Jersey and seeking a Chapter 7 bankruptcy lawyer, call 201-676-0722.

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Which debts should you put in the bankruptcy and which ones should you leave out?

Answer: You are required to list all of your debts in your bankruptcy papers! It is a common notion that you are allowed to keep some debts out of your bankruptcy by not listing them – but this could not be further from the truth.

Don’t forget, you are signing your bankruptcy papers under penalty of perjury, which means that you could be criminally prosecuted if you fail to disclose information on those papers. These papers require you to list complete information, including “all” of your debts.

What if you accidentally leave out some piece of information? Then you should tell your lawyer as soon as you realize your mistake, because you may be able to amend the filed bankruptcy papers. You may be required to pay an extra fee to the Bankruptcy Court.

And don’t forget to list all debts you may owe to friends and relatives. Many people do not think about listing debts to friends and relatives, because they don’t consider them to be the same type of debt as the credit card debt they are so worried about. And it’s true – debts owed to friends and relatives are different, but that does not mean they shouldn’t be listed in your bankruptcy papers.

If you are seeking bankruptcy advice in northern or central New Jersey, call Jennifer Weil at 201-676-0722 or send an email to: weilattorney@gmail.com.

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