About Bankruptcy

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ABOUT BANKRUPTCY FILING AND THE COURT

IN FORMATION WHICH WILL BE CONTAINED IN CLERK’S NOTICE REQUIRED BY BANKRUPTCY CODE SECTION 342(B)

CHAPTER 7: Liquidation: Total Court Fee: $299.00

Chapter 7 is a proceeding for the liquidation of a debtor’s estate. Under Chapter 7, a trustee is appointed to liquidate all of Debtor’s non-exempt assets. The trustee then distributes the assets in accordance with the priorities established by law to the creditors. The debtor ordinarily obtains a discharge. Debtors may file for relief under Chapter 7 only if they are eligible therefore. Circumstances which may preclude a debtor from seeking relief under Chapter 7 include: earning of current monthly income (CMI) in excess of the applicable median amount, CMI such that disposable income is in excess of an amount necessary to pay $10,000 to unsecured creditors over a five-year period or $6,000 over a five-year period if that amount is equal to 25% of the debtor’s unsecured debt. These tests apply to debtors whose debt is principally consumer debt.

CHAPTER 11: Business Reorganization: Total Court Fee: $1,030.00

Chapter 11 is a proceeding for the reorganization of a debtor engaged in business. Under some circumstances, it is available to consumers as well. Under Chapter 11, a debtor may propose a plan which modifies the rights of one or more classes of creditors. The rights of the creditors may be impaired either by a consent of the majority in number or two-thirds in amount of the class affected. A liquidation plan results in creditors being “deemed” impaired.

CHAPTER 12: Family Farmer: Total Court Fee: $239.00

Chapter 12 is designed for "family farmers" or "family fishermen" with "regular annual income." It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts. Under chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years.

CHAPTER 13: Repayment of All or Part of Debts of Individual with Regular Income Total Court Fee: $200.00

Chapter 13 is designed for individuals with regular income who are temporarily unable to pay their debts but would like to pay them in installments over a period of time. You are only eligible for Chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code. You are required to seek relief under Chapter 13, rather than Chapter 7, if your filing under Chapter 7 would constitute “abuse” within the meaning of the Bankruptcy Code.

Under Chapter 13, you must file a plan with the Court to repay your creditors all or part of the money that you owe them, using your future earnings. Usually, the period allowed by the court to repay your debts is three to five years. Your plan must be approved by the Court before it can take effect.

Under Chapter 13, unlike Chapter 7, you may keep all your property, both exempt and non-exempt, as long as you continue to make payments under the plan. After completion of payments under your plan, your debts are discharged, except for the following debts: trust fund taxes; taxes for which returns were never filed or filed late (within two years of the petition date); taxes for which you made a fraudulent return or evaded taxes; fraud and false statements; undisclosed debts; defalcations by a fiduciary; domestic support payments; student loans; drunk driving injuries; criminal restitution and fines; and civil restitution or damages awarded for willful or malicious actions causing personal injury or death.

SERVICES PROVIDED BY CREDIT COUNSELING AGENCIES: 11 U.S.C. §109

Individuals are ineligible for relief under any chapter of the Bankruptcy Code unless, within 180 days of the bankruptcy filing, they receive “an individual or group briefing” from a non-profit budget and credit counseling agency approved by the United States Trustee. The agency must provide its services without regard to the debtor’s ability to pay any fee. The service may be provided personally, telephonically, or on the Internet and must outline opportunities for credit counseling and assist in performing a related budget analysis. Services provided by credit counseling may include evaluation of alternatives to bankruptcy, including but not limited to debt management plans. Such plans required concurrence by creditors and this might not be possible in all cases. The Credit Counseling requirement under 11 U.S.C. §109 must be met prior to filing the petition (unless petition is accompanied by a motion for extension for exigent circumstance or a declaration/certification of waiver).

IMPORTANT INFORMATION

A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury in connection with a bankruptcy case shall be subject to fine, imprisonment, or both.

All information supplied by a debtor in connection with a bankruptcy case is subject to examination by the Attorney General.

NOTICE TO “PERSONS ASSISTED”

REQUIRED BY BANKRUPTCY CODE SECTION 527(a)

Under federal law, we are considered a “debt relief agency” and you are considered an “assisted person”. We are required by section 527(a) of the Bankruptcy Code to give you the following notices:

All information that you are required to provide with a petition and thereafter during a case under the

Bankruptcy Code must be complete, accurate, and truthful; All of your assets and all of your liabilities must be completely and accurately disclosed in the documents filed to commence the case, and the replacement value of each asset (as defined in section 506 of the Bankruptcy Code) must be stated in those documents where requested after reasonable inquiry to establish such value; Your current monthly income, the amounts specified in Section 707(b)(2) of the Bankruptcy Code, and in a Chapter 13 case, your disposable income (determined in accordance with Section 707(b)(2)), must be stated after reasonable inquiry; and The information that you provide during your case may be audited. Failure to provide such information may result in dismissal of the case under this title or other sanction including, in some instances, criminal sanctions.

IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES REQUIRED BY BANKRUPTCY CODE SECTION 527(b)

If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or, in some localities, you can get help from a bankruptcy petition preparer who is not an attorney.

THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. ASK TO SEE THE CONTRACT BEFORE YOU HIRE ANYONE.

The following information helps you understand what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine. Before filing a bankruptcy case, either you or your attorney should analyze your eligibility for different forms of debt relief made available to you by the Bankruptcy Code and which form of relief is most likely to be beneficial to you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents called a Petition, Schedules, and Statement of Financial Affairs, as well as, in some cases, a Statement of Intention need to be prepared correctly and filed with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court. Once your case starts, you will have to attend the required ‘First Meeting of Creditors” where you may be questions by a court official called a “trustee” and by your creditors.

If you choose to file a Chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so and a creditor is not permitted to coerce you into reaffirming your debts. If you choose to file a Chapter 13 case (in which you repay your creditors what you can afford over three to five years), you may also want help with preparing your Chapter 13 plan and with the confirmation hearing on your plan which will be before a bankruptcy court judge. If you select another type of relief under the Bankruptcy Code other than Chapter 7 or Chapter 13, you will want to find out what needs to be done from someone familiar with that type of relief. Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition prepares, can give you legal advice.

NOTICE REQUIRED BY BANKRUPTCY CODE SECTION 527(c)

Except to the extent this law firm (the “Debt Relief Agency”) provides the required information itself after reasonably diligent inquiry of the CLIENT (the “Person Assisted”) or others so as to obtain such information reasonably accurately or inclusion on the Bankruptcy Petition, Schedules, or Statement of Financial Affairs, this law firm, by this CLEAR AND CONSPICUOUS WRITING desires to inform you how to provide the information required in your Bankruptcy Petition, Schedules, and Statements of Financial Affairs:

1. HOW TO VALUE ASSETS AT REPLACEMENT VALUE

You must determine how much your personal property is worth as it is today. Do not value your property based upon what you can sell it for. Instead, value it as what you would have to pay to replace it. If you property is new or close to new, consider retail value adjusted to whatever extent appropriate for the amount the property has been used. If there is a market for your property as used, you may use that market to determine value. For example, you may consider using thrift store prices or prices at house or garage sales or at a secondary marketplace such as eBay to determine what it would cost you to replace your personal property.

2. HOW TO DETERMINE CURRENT MONTHLY INCOME

In order to determine “current monthly income”, you must consider your income for the six months immediately prior to commencement of your Bankruptcy Petition. If you provide us with accurate payment advices for the six months immediately prior to the commencement of the Bankruptcy Petition, we will assist you in determining your “current monthly income”.

3. HOW TO DETERMINE THE AMOUNT SPECIFIED IN SECTION 707(b)(2) AND, IN A CHAPTER 13 CASE, HOW TO DETERMINE DISPOSABLE INCOME IN ACCORDANCE WITH SECTION 707(b)(2) AND RELATED CALCULATIONS

In order to determine these amounts, you should provide us with actual expenditures you make in each of the pertinent categories. We will compare them to the allowed amounts pursuant to the current Internal Revenue Standards in order to determine your “disposable income” in accordance with Section 707(b)(2).

4. HOW TO COMPLETE THE LIST OF CREDITORS, INCLUDING HOW TO DETERMINE WHAT AMOUNT IS OWED AND WHAT ADDRESS FOR THE CREDITOR SHOULD BE SHOWN

In order to determine your list of creditors, the amount owed and what address to be shown, we will need to see your bills for each creditor for a period of 90 days prior to the commencement of your case. We may utilize a nation list of creditors’ addressed for additional information. IT IS VITAL TO HAVE THE PROPERTY ADDRESS FOR EACH CREDITOR, AS WELL AS THE ACCOUNT NUMBER FOR EACH CREDITOR. FAILURE TO PROVIDE THIS INFORMATION MAY RESULT IN ANY NOTICE BEING GIVEN TO THAT CREDITOR BEING TREATED AS INVALID, RESULTING IN THAT DEBT NOT BEING DISCHARGED IN YOUR BANKRUPTCY CASE.

5. HOW TO DETERMINE WHAT PROPERTY IS EXEMPT AND HOW TO VALUE EXEMPT PROPERTY AT REPLACEMENT VALUE AS DEFINED IN SECTION 506 OF THE BANKRUPTCY CODE

When you provide us the complete list of your property, we will evaluate with you the applicable law of Oregon as well as any other state in which you may have lived in recent years to determine which exemption applies. We do not think that it will be very easy or appropriate for you to determine exemptions without appropriate and competent bankruptcy assistance.