Bankruptcy laws are more complex than ever, and a messed-up filing is a headache!
When you file bankruptcy in Rhode Island, you should list everyone you owe money to. If you fail to list a creditor, you risk not getting off the hook for that particular debt. How can you avoid leaving a creditor out of your bankruptcy filing? Typically a credit report will identify most of your creditors. (Once every 12 months you can order a free credit report through annualcreditreport.com, or by calling 877-322-8228.)
However, not all debts will appear on your credit report. Medical bills, utility bills, and cell phone bills are often missing from credit reports, as are outstanding gym membership fees, unpaid magazine subscriptions, etc. In addition, debts that have been unpaid for more than seven years may stop showing up on a credit report. But if you don’t list them they might come back to haunt you after your bankruptcy (for the original amount plus a lot of interest accrued in the hands of some local collection agency– after the original creditor “charged off” the debt).
If you do accidentally fail to list a creditor when filing for Chapter 7 bankruptcy, it’s often possible to go back and amend (fix) your bankruptcy papers to include the missing creditor within 90 days after you file, though a $26 court fee will apply. Beyond 90 days, a heftier court fee ($260) will apply, and there are some situations where adding a missing creditor may not even be allowed. Chapter 13 (payment-plan type) bankruptcies can be even more risky to have to add a missing creditor.
Generally speaking, yes — Rhode Islanders who are unemployed can file for bankruptcy, even if they’re still getting unemployment payments. Of course, you’ll want to make sure that you’re eligible to file a wipe-it-all-clean Chapter 7 bankruptcy (versus a Chapter 13 payment plan bankruptcy). Also, if you have a worker’s compensation claim or are suing your former employer for wrongful discharge, this may complicate things a bit. But a Rhode Island attorney experienced with bankruptcy should be able to sort out these details for you.
Most people do NOT need to appear before a judge in order to complete their bankruptcy in Rhode Island. But they do need to attend a Section 341 Meeting of Creditors, which is run by a bankruptcy trustee (not a judge) who has been appointed to administer their case. Typically, the trustee will ask for ID (so remember to bring your drivers license and social security card). Then the trustee will spend several minutes asking you questions about what you own, your debts, income, etc.
If you’ve retained a good attorney, however, you won’t be alone. I attend this meeting with every one of my clients, and it’s rare for there to be any issues. In fact, most creditors don’t even bother coming. This Meeting of Creditors is held on weekday afternoons at the Federal Center, 380 Westminster Street, 6th Floor, in downtown Providence, and usually lasts for only a few minutes.
People who are considering filing bankruptcy with me often ask what to bring for our first meeting. (If you’re interested in scheduling a free initial consultation to see if bankruptcy is a good option for you, call my office at 401.738.3030 today.) The purpose of this first meeting is to ensure that we’re both comfortable that going forward with a bankruptcy filing makes sense in your specific situation. So it’s generally helpful if you can bring in your recent bills, collection notices, and any lawsuit-related papers, as well as any other documents that you’d like me to take a look at. At the end of the meeting, I can give you a checklist so you’ll know exactly what information my office will need from you in order to get your case prepared and filed.
It is rare for someone who is represented by a bankruptcy attorney to lose their property (home, personal possessions, retirement plans, etc.) as a result of a bankruptcy filed in Rhode Island. The Rhode Island statute dealing with what you are allowed to keep or “exempt” in spite of a bankruptcy filing has some particularly generous provisions. You can often keep or “exempt” the following items (up to set dollar limits) from being taken from you as a result of a bankruptcy filing in Rhode Island:
• the home where you live
• one or more vehicles
• furniture, home electronics, and other household items
• office equipment
• 401ks, IRAs and various other types of retirement accounts
• Cash, bank account balances, and cash equivalent assets
If you are considering filing bankruptcy and own real estate or other significant assets, you owe it to yourself to speak to an attorney who specializes in bankruptcy law before assuming that all of your assets will be exempt. I offer free initial consultations and often can determine during this first meeting if there is a risk of assets being lost as a result of a bankruptcy filing. Please feel free to give me a call to schedule an appointment to discuss your particular situation.
A Rhode Island bankruptcy filing can be used to get rid of many types of debt. Filing under Chapter 7 may allow many types of debts to be wiped out completely:
- credit card debt
- electric, gas, water, and other utility bills
- medical, dental, and vision bills
- personal and unsecured bank loans
- automobile loan obligations remaining on a repossessed vehicle
- mortgage loan obligations remaining on a foreclosed home
Any child support obligations, recent taxes, and student loans are generally not eligible for discharge. But in some cases, even student loans can be eliminated in a bankruptcy if it can be shown that these debts create an unreasonable hardship for you.
Posted in chapter 13, chapter 7, debt settlement, income taxes past due, new bankruptcy law, Rhode Island, RI Bankruptcy Court, Stop Home Foreclosure
Tagged first mortgage, mortgage modification, second mortgage, underwater real estate
Many people think they won’t be able to sign up for new credit cards after filing bankruptcy. While all bets are off given the current credit crisis, in recent years the answer to the above question has typically been yes — it was fairly common to hear of clients receiving offers to sign up for credit cards soon after filing.
Why does this happen? It’s because credit card companies know that you won’t be able to file bankruptcy for a number of years, which makes you a relatively good credit risk.
Yes, in many cases you can. In Rhode Island, you can keep vehicles you own outright up to $12,000 under the state’s “motor vehicle” exemption. Even if your vehicle is worth more, you could potentially hold on to a vehicle valued up to $17,000 by also claiming the state’s $5,000 “wildcard” exemption.
If a creditor has a secured loan on your vehicle, you can often keep your vehicle through a bankruptcy as well. Debtors can choose to reaffirm an auto loan, and if the car payments continue to be made, the secured creditor would have no reason to repossess the vehicle.
Yes — in many cases filing a Chapter 13 bankruptcy can stop a home foreclosure sale from proceeding. Over the years, many Rhode Island homeowners have used this type of bankruptcy filing to prevent foreclosure and allow themselves to get caught up on their mortgage payments and keep their house.
People sometimes find it necessary to file bankruptcy again. The good news is you can file again; the bad news is you may want to wait a while. Under the new bankruptcy law, you can file a Chapter 7 bankruptcy eight years after you initially filed for Chapter 7 . You must wait four years to file for Chapter 13 bankruptcy again.
You can actually file for Chapter 13 even before the 4 year limit, but in this case you’ll have to pay back 100% of your debt over time. While this might not sound like an appealing option, it may be a useful approach for people attempting to save their home from foreclosure.