UNITED STATES BANKRUPTCY COURT
NOTICE TO CONSUMER DEBTOR(S) UNDER
§342(b)
OF THE BANKRUPTCY CODE
In accordance with § 342(b) of the Bankruptcy
Code, this notice to individuals with primarily consumer debts: (1) Describes
briefly the services available from credit counseling services; (2) Describes
briefly the purposes, benefits and costs of the four types of bankruptcy
proceedings you may commence; and (3) Informs you about bankruptcy crimes and
notifies you that the Attorney General may examine all information you supply in
connection with a bankruptcy case.
You are cautioned that bankruptcy law is
complicated and not easily described. Thus, you may wish to seek the advice of
an attorney to learn of your rights and responsibilities should you decide to
file a petition. Court employees cannot give you legal advice.
Notices from the bankruptcy court are sent to
the mailing address you list on your bankruptcy petition. In order to ensure
that you receive information about events concerning your case, Bankruptcy Rule
4002 requires that you notify the court of any changes in your address. If you
are filing a joint case
(a single bankruptcy case for two individuals married to each other), and each
spouse lists the same mailing address on the bankruptcy petition, you and your
spouse will generally receive a single copy of each notice mailed from the
bankruptcy court in a jointly-addressed envelope, unless you file a statement
with the court requesting that each spouse receive a separate copy of all
notices.
1.
Services Available from Credit Counseling Agencies
With limited exceptions, § 109(h) of the
Bankruptcy Code requires that all individual debtors who file for bankruptcy
relief on or after October 17, 2005, receive a briefing that outlines the
available opportunities for credit counseling and provides assistance in
performing a budget analysis. The
briefing must be given within 180 days before the bankruptcy
filing. The briefing may be provided individually or in a group (including
briefings conducted by telephone or on the Internet) and must be provided
by a nonprofit budget and credit counseling agency approved by the
In addition, after filing a bankruptcy case,
an individual debtor generally must complete a financial management
instructional course before he or she can receive a discharge.
The clerk also has a list of approved
financial management instructional courses. Each debtor in a joint case must
complete the course.
2. The Four Chapters of the Bankruptcy
Code Available to Individual Consumer Debtors:
Chapter 7: Liquidation ($245 filing fee, $39
administrative fee, $15 trustee surcharge: Total fee $299)
1. Chapter 7 is designed for debtors in
financial difficulty who do not have the ability to pay their existing debts.
Debtors whose debts are primarily consumer debts are subject to a “means test”
designed to determine whether the case should be permitted to proceed under
chapter 7. If your income is greater than the median income for your state of
residence and family size, in some cases, creditors have the right to file a
motion requesting that the court dismiss your case under
§707(b) of the Code. It is up to the court to
decide whether the case should be dismissed.
2. Under chapter 7, you may claim certain of
your property as exempt under governing law. A trustee may have the right to
take possession of and sell the remaining property that is not exempt and use
the sale proceeds to pay your creditors.
3. The purpose of filing a chapter 7 case is to
obtain a discharge of your existing debts. If, however, you are found to have
committed certain kinds of improper conduct described in the Bankruptcy Code,
the court may deny your discharge and, if it does, the purpose for which you
filed the bankruptcy petition will be defeated.
4. Even if you receive a general discharge, some
particular debts are not discharged under the law. Therefore, you may still be
responsible for most taxes and student loans; debts incurred to pay
non-dischargeable taxes; domestic support and property settlement obligations;
most fines, penalties, forfeitures, and criminal restitution obligations;
certain debts which are not properly listed in your bankruptcy papers; and debts
for death or personal injury caused by operating a motor vehicle, vessel, or
aircraft while intoxicated from alcohol or drugs. Also, if a creditor can prove
that a debt arose from fraud, breach of fiduciary duty, or theft, or from a
willful and malicious injury, the bankruptcy court may determine that the debt
is not discharged.
Chapter 13: Repayment of All or Part of the
Debts of an Individual with Regular Income ($235 filing fee, $39 administrative
fee: Total fee $274)
1. Chapter 13 is designed for individuals with
regular income who would like to pay all or part of their debts 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.
2. Under chapter 13, you must file with the
court a plan to repay your creditors all or part of the money that you owe them,
using your future earnings. The period allowed by the court to repay your debts
may be three years or five years, depending upon your income and other factors.
The court must approve your plan before it can take effect.
3. After completing the payments under your
plan, your debts are generally discharged except for domestic support
obligations; most student loans; certain taxes; most criminal fines and
restitution obligations; certain debts which are not properly listed in your
bankruptcy papers; certain debts for acts that caused death or personal injury;
and certain long term secured obligations.
Chapter 11: Reorganization ($1000 filing fee,
$39 administrative fee: Total fee $1039)
Chapter 11 is designed for the reorganization of
a business but is also available to consumer debtors. Its provisions are quite
complicated, and any decision by an individual to file a chapter 11 petition
should be reviewed with an attorney.
Chapter 12: Family Farmer or Fisherman ($200
filing fee, $39 administrative fee: Total fee $239)
Chapter 12 is designed to permit family farmers
and fishermen to repay their debts over a period of time from future earnings
and is similar to chapter 13. The eligibility requirements are restrictive,
limiting its use to those whose income arises primarily from a family-owned farm
or commercial fishing operation.
3. Bankruptcy Crimes and Availability of
Bankruptcy Papers to Law Enforcement Officials
A person who knowingly and fraudulently conceals
assets or makes a false oath or statement under penalty of perjury, either
orally or in writing, in connection with a bankruptcy case is subject to a fine,
imprisonment, or both. All information supplied by a debtor in connection with a
bankruptcy case is subject to examination by the Attorney General acting through
the Office of the United States Trustee, the Office of the United States
Attorney, and other components and employees of the Department of Justice.
WARNING:
Section 521(a)(1) of the Bankruptcy Code
requires that you promptly file detailed information regarding your creditors,
assets, liabilities, income, expenses and general financial condition. Your
bankruptcy case may be dismissed if this information is not filed with the court
within the time deadlines set by the Bankruptcy Code, the Bankruptcy Rules, and
the local rules of the court.