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Dec 2012Posted by Robert Weed / in General Information About Bankruptcy Law, Virginia Bankruptcy / 20 comments
The 2007 Mortgage Forgiveness Tax Relief Act expires December 31, 2012. That’s one of the tax cuts, put in place when George Bush was president, that are about to expire. This one may force more people to file bankruptcy.
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Oct 2012Posted by Robert Weed / in After Bankruptcy, General Information About Bankruptcy Law / 65 comments
Lots of people, in current or recent bankruptcy, are getting letters from Bank of America forgiving their second mortgages.
What’s going on?
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Oct 2011Posted by Robert Weed / in General Information About Bankruptcy Law / 43 comments
Planning to file bankruptcy? You will need to round up bank statements. You’ll need them at the beginning of the bankruptcy process; and you’ll need them again for your bankruptcy hearing.
(Here are specific instructions on what bank statements you need for your bankruptcy hearing in Alexandria, Virginia.)
Since you need to tell the bankruptcy court about all your accounts when you file your bankruptcy papers, you want to talk them over with your lawyer early–in time to identify and fix any problems.
Bring bank statements on every account in your name, when you first meet with your bankruptcy lawyer.You will need to tell the court about every account your name is on. So you and your lawyer needs to know what those accounts are.
Does that include the account with only five dollars that you never use any more? Yes.
Does that include your mother’s account that she “just put your name on in case of emergency”? Yes.
Does that include the account where only your wife’s paycheck goes, but is in both names? Yes.
Does this includes credit unions, too? Yes.
Does it includes accounts you have with your minor children? Yes. And also college savings plans you have for them.
Does it includes money markets? And investment, brokerage accounts? Yes and yes. And Bitcoins; and Paypal accounts. And accounts you have overseas.
More than just banks, it includes every place you have money.
When you first talk to your lawyer, you need to talk about all those accounts. So bring bank statements–and other accounts–with you.
Is your mother’s $200,000 life savings–in the account you are on “for emergencies”–going to be a problem? You want to talk that over when you first meet with your lawyer. Do not wait and bring it up when you are signing the final draft of your bankruptcy papers.
The same thing with your wife’s account that’s “in both names.”
When you bring in the bank statements, then you are not guessing. You and your lawyer can see whether, and how, your name is listed on each account. And how much money goes through it every month.
Both of those can be important to getting your bankruptcy approved–without having the bankruptcy trustee take some of your money. (Or worse, take some money that’s not yours–that belongs to someone else in the family.)
Getting through bankruptcy, without losing any money, may take some planning. Your lawyer may have your wife change her direct deposit to a different account–one only in her name. Your lawyer may want mom to take all the money out and put it in a different account. Maybe the lawyer will just want proof of where mom got all that money.
Besides the bankruptcy trustee maybe grabbing those accounts, some of your creditors might try to get to them. Your lawyer will want to compare your accounts with your creditors–and may suggest you change banks for that reason.
All that takes time and planning–so make sure you bring in all those bank and other account statements at the beginning.
Toward the end of the bankruptcy process, you are required to show those statements to your bankruptcy trustee. What statements? Every one that your name is on.
You need to give your bankruptcy trustee copies of your bank statements. That can be a big headache.
Those will mostly be the same accounts that you went over with your lawyer at the beginning, but maybe with some changes. If you have accounts that you don’t use, your lawyer may have told you to close them. If your accounts were in a bank where they weren’t safe, you may have new accounts now.
The bankruptcy trustee is looking at your account statements for two reasons. First, because the law (Bankruptcy Rule 4002) requires it. Second, to see if you had too much money on the day you filed your bankruptcy case. (“Too much money” meaning enough that the bankruptcy trustee can grab some of it.)
Sometimes getting those bank statements is a problem, if you wait until after your case is filed. Some banks, and especially some credit unions, stop sending statements when they get notice of the bankruptcy. And they may cut off your internet access, too.
(Stopping the statements and cutting off internet access is most likely a problem if you owe money to that bank. They don’t want to be violating the bankruptcy law by trying to collect your old debts, so they just stop sending you ANYTHING.)
I recommend a two step process. First, when you come in for your court preparation appointment, bring your most recent bank statements. Those may be a few days, or even a few weeks old.
Then, the day after your bankruptcy case is filed and your papers go down to the court, get an internet print out from the end date of the last statement on through to the day after your bankruptcy is filed. Take care of that right away–in case the banks and credit unions cut off your internet access when they get notice of the bankruptcy.
Taking care of bank statements–and all account statements–both early and late in the bankruptcy process, is a key to have your bankruptcy case go smoothly.
Filed a bankruptcy case for some folks last week who had SIXTEEN bank accounts. Half of them they hadn’t used in years, but kept open because it was too much trouble to close them. Now they are trying to get account statements showing the date the bankruptcy was filed, and the bank is not cooperating.
Duh–if you’ve left a three dollar balance on a bank account for four years, the bank is NOT going to consider you a good customer. And if you thought it was too much trouble to close those accounts before you file bankruptcy, see how much trouble it is to get that bank statement balance now that you have filed bankruptcy.
You need to do yourself–and the bank–and the bankruptcy court a favor and close accounts you are not actively using.
So, I’m starting to charge. I’m charging for the extra paperwork we have when people have multiple, unnecessary bank accounts.
For a single person, your first THREE bank accounts are free. If you have more than THREE! accounts on the day you file bankruptcy, there’s a $50.00 charge.
For a married couple the first five are FREE. After five, there’s a fifty dollar charge.
(You also get one more for free for each child you have.)
Each bank account you have means a lot of work–for you, for me, for the bankruptcy trustee. And the more you have, the harder it is–for you, me. and the bankruptcy trustee–to make sure they are all covered. So, close ’em.
If it’s too much trouble to close them, I’m charging for the extra paperwork on my end. You will still have to do extra work to get each statement balance. And if you get sent home from your hearing because the trustee thinks you missed one statement, you were warned.
So, close those accounts you’re not using.
