If you are filing bankruptcy, Get Your Money Out of Wells Fargo.
People filing bankruptcy get kicked when they are down, if they bank at Wells Fargo.
Wells Fargo sees your bankruptcy on your credit report and they freeze your checking and savings account. At least they do if you have more than five thousand dollars in their bank. (They have said in court they only do it if you have more than $5000.00. But they don’t just freeze the amount over $5000.00–they freeze it all.)
Why would a bank beat up their own customers?
Why Does Wells Fargo Beat Up Their Own Customers
So, why would Wells Fargo beat up their own customers like this? They claim they are required to ask the bankruptcy trustee if he wants the money. Although they are the only bank that does this, they have adamantly stuck to this policy for years.
It’s hard to make sense as a business proposition. I personally have probably cost them nearly a thousand customers over the years. (At one of our national meetings of NACBA, a former NACBA president joked maybe they did it to collect bounced check fees. That seems a small reward for losing lifetime customers.)
Anyway, get your money out of Wells Fargo. (A couple weeks after the bankruptcy is filed, you can go back there if you want.)
I first wrote about this problem in 2011.
I first wrote about this Wells Fargo problem in 2011
When you file Chapter 7 bankruptcy, that means you don’t have to make the car payments.
But that does not mean you get a free car. You don’t have to make the car payments, but the car still has to pay.
That’s because the car finance company is attached to the car title. Lawyers call that a lien. If the debt that’s attached to the car isn’t paid, the lien holder will repossess the car.
Don’t Forget to Make the Car Payment
It’s easy after bankruptcy to forget to make the car payment. If it slips your mind, the car finance company won’t send you a reminder. Why? Because you don’t have to pay. They also won’t send the car a reminder letter. They know the car doesn’t open its mail.
And if you get a week behind, they won’t call and demand payment. Because you don’t have to pay. And they won’t call the car, because the car doesn’t have a phone. Only one thing happens if you forget to pay. You wake up in the morning and the car is gone.
If you forget to make your after bankruptcy car payment, you won’t see the car. the car still has to pay.
Does Paying the Car Help Your Credit Score?
Suppose you forget to pay and the car gets repossessed. The repossession won’t show up on your credit report. That’s because the bankruptcy discharges the debt from you. But that also means your car payments won’t show up on your credit report if you do pay. You don’t have to pay.
The Alexandria Bankruptcy Court Trustee Hearings are now by Telephone.
Bankruptcy Trustee hearings are now telephonic. That’s the policy of the Alexandria VA bankruptcy court, effective April 9, 2020. (Richmond and Norfolk, too.)
Instead of a location, your hearing notice will have a phone number to call.
People who file bankruptcy are required by law to “appear” in front of the bankruptcy trustee to answer questions. (For most people, the questions are, “Did you go over these papers when you signed them, and is everything you put there true?”) Those hearings by law are between four and six weeks after we send your papers to the court.
Starting now, you and I will appear by phone.
The trustee does about a dozen hearings per hour; and everybody will call in the same phone number. So you and I will be listening in on the hearings for every other person that hour. (This is the same as it would be if we were all sitting in the hearing room together.)
Mute your phone. When you call in, don’t say “Am I on? Am I on?” You’re on an open mic to the whole room. If you talk when it’s not your turn, you are interrupting the bankruptcy trustee. (You don’t want the trustee to be grumpy when it’s your turn.)
The trustee is supposed to check your ID and social security number. On the phone there’s no way they can match your picture. But having an ID that matches the name on the bankruptcy papers at least proves something. So take a picture, or scan, of your ID and social security card. Email to email@example.com.
We Will Talk Privately Before and After
You and I will have a call-in a Saturday before scheduled time. To go over what’s going to happen. And make sure you are ready to call in.
On the day of, I’ll email you about ten minutes before; to make sure you are there; and cover any last minute jitters. Afterwards, I send an email wrap-up. And set a time for a call later in the day to handle any follow up questions you have, or action items that came out of the hearing. Those calls will only be between us.
I’ll be looking at my email during the hearing, so if you want to whisper me a question, do it by email. Use firstname.lastname@example.org. That’s the email I’ll be watching. (It gets to me 45 second quicker than email@example.com.)
Here are documents you should get
The Notice of a Bankruptcy case comes to you in the mail about a week after the papers go in. It tells when when your telephonic “appearance” is. It’s also a notice to the people you owe money to that they are required to leave you alone. And that anybody who is garnishing you has to stop.
Your Order to debtor tells you that you are required to show up for the telephonic appearance. And that if somebody dies and leave you money in the next six months, the bankruptcy trustee can come and get it. You get this in the mail with the Notice of a Bankruptcy Case.
Here’s stuff you need to look at before your telephonic bankruptcy hearing
The Bankruptcy information sheet is a form I’m required to give you. Congress really wants you to know you have four choices under the bankruptcy law. Chapter 12 is only for farmers (and fishermen.) I’ve never done a farmer. Chapter 11 is for people like Donald Trump. I’ve never done Donald Trump. Chapter 13 is a payment plan through the court. Chapter 13 can get you five years to catch up your house or pay off your taxes, You can also be forced into Chapter 13 if you are making too much money to get approved for Chapter 7.
Chapter 7 says ‘sorry I can’t pay these debts.’ For most people that’s what we want.
This Hearing Info is from me. It explains that you need to get us bank statements that cover the date your bankruptcy was filed. For ALL your bank accounts including the ones “I never use.” It also lists the questions they usually ask.
Finally here’s my 15 minute video
Ignore the parts about where to go and where to park–these are telephonic bankruptcy hearings, remember. But the other stuff is still right. PS Actually one other correction. We use Moneysharp.org for the required class. (The video mentions Hummingbird. They stopped covering Virginia.)
Now that most consultations are by phone and zoom, I’m posting these on my webpage.
The first disclosure
This first disclosure tell you that you have four choices under the bankruptcy law.
Chapter 12 is only for farmers, and fisherman. I’ve never done a farmer
Chapter 11 is for business people like Donald Trump. I’ve never done Donald Trump
Chapter 13 is a payment plan through the bankruptcy court.
If you are behind on your mortgage, Chapter 13 can give you time to catch up.
If you owe taxes, Chapter 13 can give you time to pay without more interest or late fees.
If you are making too much money to file Chapter 7, chapter 13 pays your debts over five years.
If your house would get sold in Chapter 7 bankruptcy, Chapter 13 can save the house.
Those are my explanations. the required notice explains them somewhat differently. That notice is here.
That notice also remind me if you lie to the bankruptcy court, you can go to jail.
The Second Disclosure
The second disclosure reminds you again to tell the truth. And it also tells you that you may be subject to audit. (The bankruptcy law calls for an audit of one case out of every hundred. Sometimes there’s no money in the budget, so they skip the audits; sometimes they do them.)
The Big Bailout Helps If You have to Skip Chapter 13 Payments
The big bailout law, just passed, includes some slack for people in Chapter 13. If you can’t make your Chapter 13 payments, we can ask the bankruptcy judge to add up to 24 months to your payment plan. Before that law was passed, if you got permission to skip some payments, you had to catch up in the months that are left.
How Will This Work Out?
I don’t know yet how this will work out. I’m thinking it over and talking with other, smart bankruptcy lawyers, while we try to see the best way to use this law.
If you can’t make your Chapter 13 payments, we can ask the bankruptcy judge to add them on to the end.
Here’s a little more info Covid-19 and the 7 Year Plan «. Asking for more time only applies to people who already have an approved plan. If you are not yet approved–or haven’t filed yet–you can’t ask for the extra two years to pay.
The Bankruptcy Court is Alexandria is Postponing the Trustee Hearings.
Because of the corona virus, bankruptcy hearings in Alexandria VA scheduled up through April 10 are postponed. (I’m guessing the rest of April will get postponed, too.)
Postponed Until When?
There’s no news on when they will be reschedule, or how.
Some courts have adopted call-in hearings. No word on that here.
What do I need to do?
The bankruptcy trustees are still nagging us to get the bank statements in on schedule. So if you haven’t sent us your bank statements or your 2019 tax papers, please send those in to your paralegal. And I’m guessing they will want you to send in a proof of your drivers license and social security card. So take that picture now, so you have it. (Or scan, if you have a scanner.)
Don’t forget to take the second class.
And if you haven’t yet, don’t forget to take the second class, at Moneysharp.