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The Tactical Chapter 7 13 Bankruptcy Manual

The Tactical Chapter 7 13 Bankruptcy Manual

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Published by ntshadow
Step by Step How to File Chapter 13 and Chapter 7 Bankruptcy from Bankruptcy-Divorce.com
Step by Step How to File Chapter 13 and Chapter 7 Bankruptcy from Bankruptcy-Divorce.com

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Published by: ntshadow on Dec 27, 2008
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10/16/2011

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You are required by the Court to list all your debts and all your assets. You do not want to

The Tactical Bankruptcy Manual, © 2007 Nick C. Thompson. All Rights Reserved.

17

miss a single Creditor when you prepare your bankruptcy, even if you wish to keep the debt or if
someone is cosigned on that debt. If you want to keep your car, home, or a credit card, list it
anyway. If you don’t think the debt can be bankrupted, list it anyway. If you do not list the
Creditor, he may be unaffected by the bankruptcy until you amend and add him. Also under the
new law, you must list him with an address the creditor has used at least twice in mail to you.
You are charged extra Court costs to add a Creditor later.

You can add a Creditor even after the bankruptcy is over (discharged) but you will have to reopen
the case and pay a filing fee (about $300) and an Attorney fee ($250 to $500 at 2007 prices) to add
debts after a discharge. You are permitted to file an amendment to add a Creditor before the final
discharge of your debts for 29 dollars plus a small attorney fee. This is a costly and time-
consuming nuisance, so it is better to list debts the first time. You may add a debt after your case
is discharged but only if the Creditor is not placed at an undue disadvantage because of your
delay. Adding a debt after your case is closed will cost you at least $600.00 dollars in court costs
and attorney fees so make certain you add any debts long before your case is discharged. Adding a
debt after your case is over is basically like starting the case from scratch. The only difference is
that there is usually not a 341 hearing in a reopened case.

Bankruptcy is the nuclear bomb of lawsuits: It destroys almost every type of debt. It will
sometimes even accidentally destroy debts that some Attorneys and the law will tell you are not
dischargeable. Although it may be harder to qualify for some debts, it is still a nuclear bomb
carrying the authority of a federal judge. Even though some debts are “not dischargeable” they
may be discharged anyway if the creditor forgets to object. If you have a doubt about whether or
not to list the debt, list it. You normally can’t be harmed by listing a debt or hurt your co-
signers by listing a debt.
Many people do not wish to list a particular Creditor because they want
to keep the property, or stay friends with a local lender—but all your creditors MUST be included
by law. Forgetting to add a debt may mean that you have to pay it later to get a home mortgage.

Until 2005 you could reaffirm and pay a debt to retain property. A reaffirmation is a signed
agreement to repay a Creditor even though you have filed bankruptcy. Normally, you keep
property by listing the Creditor and then signing a reaffirmation agreement with them. The new
law states that it is inherently a hardship and that the attorney cannot sign if income is less than
expenses. Therefore, the attorney can no longer sign a reaffirmation if you can’t afford the debt
according to your budget in Schedule J. Instead, the judge will sign your reaffirmation in a second
hearing. By signing and repaying on time, you work to rebuild your credit.

In 2005 changes that may make the attorney liable for the debt if he signs a reaffirmation
that you will repay the debt.
As a result, no attorney that I have spoken to encourages a
reaffirmation. Hopefully this will change back to the old rule. If you reaffirm, we suggest that
you pay your home and car on time and keep it fully insured to comply with your contract and
keep the lender happy. If you sign a reaffirmation under the new law, the lender may foreclose or
repo and sue you for the difference. The failure to sign a reaffirmation or redeem means that the
stay is automatically terminated 45 days after filing and that they can pick up property. You
should consider a redemption instead for any personal property but you cannot redeem real
property.

Often, Banks, Mortgage Companies, and Creditors will accept continued payments without a
reaffirmation but some may refuse to send you monthly statements. To get monthly statements
you can have your bank send you a form allowing them to contact you which your attorney may
have to sign. We commonly allow them to call you to negotiate if they send us a reaffirmation and

The Tactical Bankruptcy Manual, © 2007 Nick C. Thompson. All Rights Reserved.

18

you wish to keep property. Creditors cannot be forced to accept reaffirmations, but it is very rare
for them to refuse them. If your bank requires a reaffirmation, it must be signed before the case is
discharged. Reaffirmation agreements can be filed after discharge, but they must be signed before
discharge.

List your utility bills and every imaginable debt. Your service will not be disconnected just
because you listed your utility bills. But you may, at worst, have to pay a new deposit equal to one
month’s service, but the debt for your old utility bill on the day the case is filed can be discharged.
Telephone, electricity, heat, and water are utilities. Cable TV is a luxury and it is not a utility and
it is not regulated like the utilities. Utilities are required to continue service to you if you bankrupt
it. Also your utility bills may allow you to file a Chapter 7 if they are higher than the average bill
and can be used in the means test as a deduction from your income.

If you choose us as your Attorney, we will need a list of your debts with CORRECT account
numbers and addresses for each and every Creditor. We cannot and will not run down the
addresses unless you wish to pay us 150 an hour to do it.
We highly recommend that you get a
credit report that lists the addresses to help you. Most credit Reports normally don’t list the
addresses of the Creditors or the account numbers. The account number is also required after
10-2005
. Bring a list of all of your debts with complete addresses with you when you come or
complete our online filing with this information. You may guess the amount of the debt but
you must have a correct address
. Remember that credit reports do not normally have the
addresses for the Creditors listed and to list a debt you need both the address, amount, purpose of
the debt whether it is secured unsecured and whether it belongs to the Husband wife or is joint.
You can get a free report from our website. On our web site you can also download a spreadsheet
for listing your debts and a budget but inputting your information on the website is best.

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