Just about the most important task of filing bankruptcy is to provide your attorney with the name and address of each creditor. If a creditor is not notified of the bankruptcy there is a good chance the debt will not be discharged. One way to prevent these painful omissions is to obtain a copy of your credit report before filing a case. A good Nebraska bankruptcy attorney will always obtain a copy of the credit report and import every debt into the list of creditors.
Every person who files bankruptcy must attend a court hearing conducted by the bankruptcy Trustee, and the hearing takes place about one month after the case is filed. Every creditor listed on the bankruptcy schedules is notified of the hearing and they have the right to attend and ask questions of the debtor. We refer to these hearings as a "341 hearing" (because it is required under Section 341 of the Bankruptcy Code) or as the "meeting of creditors."
One of the most frustrating problems faced by debtors in a 3-5 year Chapter 13 case occurs when the IRS places a "hold" on a tax refund because taxes are due for prior years. Generally, the IRS may not take tax refunds once a Chapter 13 bankruptcy case is filed since the taxes owed are either being discharged by the bankruptcy or they are being paid off through the payment plan. However, if you owe taxes and are in the middle of a Chapter 13 plan, expect delays in receiving that tax refund.
Recently, the Sixth Circuit Court of Appeals ruled that the temporary freezing of a tax refund during a Chapter 13 case does not violate the bankruptcy stay and the court denied the debtor any compensation for the delays and legal fees incurred to release the refund. See In re Harcher, No 10-4201 (6th Cir.Sept 12, 2012).
By: Jessie Polson
A recent article in the Wall Street Journal reveals that more than 5,000 arrest
warrants were issued since 2010 in the one-third of all U.S. States that allow creditors to place debtors in jail for not paying a debt. Nebraska does not allow this procedure, however, a debtor who fails to attend an Order in Aid of Execution hearing may be arrested for not attending the hearing. To make matters worse, due to a lack of notice, many debtors are unaware that they have been sued let alone that they had to attend a court hearing.
It seems like a lot of our cases involve debtors who fall behind on bills after becoming injured at work. After exhausting their savings and retirement accounts, the workers compensation insurance company makes a low-ball offer to settle the claim. Another tactic I see is where the insurance companies frequently terminates the temporary workers compensation payment based on some technicality in an effort to force a settlement.
Every person filing bankruptcy must provide the court a list of all their property, including bank accounts and the balance in each account on the day the bankruptcy is filed. Since bank account balances change daily or even hourly, it is often very difficult to precisely state the exact account balance, especially if there is a delay between the time a case is signed and the time it is actually filed with the bankruptcy court.
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