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Chapter 7 bankruptcy requirements | Aurora St. Charles Elgin Batavia Oswego Napverille

Chapter 7 Bankruptcy Requirements

Things You Need to Know

Here you will find Chapter 7 requirements and other information:

  • Bankruptcy Filing and Creditors Notified
  • Financial Management Course Information (chapter 7 bankruptcy requirements)
  • Creditors Meeting and the Trustee Information (bankruptcy requirements)
  • Reaffirmation Agreement and Staying Current on House and Car Payments

Bankruptcy Filing and Creditors Notified:

When will my bankruptcy be filed with the Court?

Your bankruptcy will be filed with the U.S. Bankruptcy Court for the Northern District of Illinois within 7-10 days after you meet with your attorney to sign your bankruptcy petition and schedules, unless there is a reason to hold your case.

When will my creditors be notified of my bankruptcy filing?

Creditors will be notified by the Bankruptcy Court either electronically or by mail of your bankruptcy filing within 5 days of the date your case was filed. They will be provided your case number, the date your bankruptcy was filed, your attorney’s address and phone number, the Trustee’s address and phone number as well as the bankruptcy court’s information. It is important that you include the correct address for your creditors when you are filling out your bankruptcy questionnaire provided when you had your initial consultation.

One of the biggest benefits of filing bankruptcy is the automatic stay stops creditor harassment. If you are contacted by one of your creditors, let them know you have filed bankruptcy, give them your case number, tell them you filed in the Northern District of Illinois, let them know your bankruptcy lawyer’s name (Brad Covey) and that they are to contact our office if they have any further questions. You can also direct your creditors to our website for additional information specifically for your creditors.

What should I do if a creditor continues to contact me?

If a creditor continues to call you AFTER you have provided them your case information, please give them the information again BUT take the person’s name and the date and time they called. If a creditor continues to call, and you document these calls thoroughly, our office may be able to file for sanction against the creditor.

In the rare circumstance that a creditor continues to call, obtain the name of the person that calls and the date and time they called. Contact our office and someone will also contact the creditor.

You may receive statements, bills or invoices from your creditors the first month after your bankruptcy is filed. This is not unusual since they must update their system to reflect your bankruptcy. If you continue to receive statements, bills or invoices from your creditors, please contact them and remind them you have filed bankruptcy and give them my telephone number to call for any information. Be sure to document the name of the person you spoke to and the date and time you spoke with them.

Again, it is extremely rare, but if a creditor continues to contact you after your bankruptcy filing, there is legal action we may take against that creditor. However, we must be able to document when and how the creditor was provided your bankruptcy information. As a result, be sure to keep documentation of the dates, times and person(s) you spoke with for that creditor. Without this information, we will not be able to take legal action against the creditor.

Financial Management Course Information:

When do I need to take the Financial Management course? (A chapter 7 bankruptcy requirement)

As you know, you must take a financial management course and file the certification with the bankruptcy court to receive a discharge in your bankruptcy. We recommend you take the financial management course as soon as you receive your case number from us and before your creditors meeting. If you are married, each person must take the course separately, and you and your spouse will receive two different certificate numbers. Most of our clients take the course online at Ypside.com.  This is important, if you have any questions regarding when to take the financial management course please contact our office.  Please note that Ypside.com only offers the course online and there is no telephone number.  If you need a counseling service that offers a phone number or in-person counseling please contact our office.

What should I do after completing the Financial Management course?

Prior to your creditors meeting, forward a copy of your Financial Management Certificate to our office. The credit counseling agency will also either fax or email the certificate to us. Once we receive your certificate we will file it with the bankruptcy court.  If you have taken the course and provided us with the certificate, you should within ten days receive an email or letter from us confirming that the certificate was filed.  If you don’t receive confirmation that the certificate was filed please contact us immediately.  It is your responsibility to make sure the financial management certification has been filed with the Court. If you have taken the course but simply failed to have your certification filed with the Court prior to your expected discharge date, the Court will close your case and you will not receive a discharge of your debts.

What if I forget to take the financial management course or forget to have it filed with the bankruptcy court before my case is closed?

If the bankruptcy court were to close your case without a discharge because you failed to take the financial management course, you will be required to file a motion with the bankruptcy court to reopen your case. The court’s current cost to reopen the case is $260 for a Chapter 7 bankruptcy. There will also be substantial additional attorney fees to file the motion and obtain the order from the bankruptcy court.  Our office does not want you to incur any additional cost or inconvenience from not taking and filing the financial management certification. That is why it is extremely important that you complete and file the financial management certification in a timely manner.

Creditors Meeting and the Trustee Information:

Your One and Only Court Appearance (a chapter 7 bankruptcy requirement)

Your bankruptcy hearing is called the first meeting of creditors (“341 Hearing”). It’s called 341 hearing because section 341 of the bankruptcy code requires it. It is also called the “first meeting of creditors” although it is the only meeting (usually) and generally creditors do not show up.  It will be held approximately 4 to 6 weeks after we file your case. There will be no judge at the hearing. Your bankruptcy Trustee will preside over the hearing.  A bankruptcy trustee is usually an attorney appointed by the United States Trustee’s Office.  In the collar counties of Chicago, there are four trustees per county.  Our firm is very proud to have one of the four trustees in Kane County, Illinois and one of the four trustees in DuPage County, Illinois.

ID Required

You will be asked to swear or affirm to tell the truth and will testify under penalty of perjury.  The meeting will also be recorded. The trustee will verify your identity by reviewing your drivers license or other acceptable form of identification such as a passport. The trustee will also verify your social security number by reviewing your original social security card. Be sure to bring your photo identification and social security card to the hearing. If you do not bring acceptable photo identification and your social security card, the trustee cannot hold your hearing, and you will have to come back another day.

When is my creditors’ meeting?

Your creditors’ meeting occurs approximately 30 – 45 days after your bankruptcy is filed. We will send you an email with your case number, date filed, court location and time.  Attached to the email will be a copy of your petition and schedules that were filed with the court.  If you do not have email, we will send the same information via regular mail.  Additionally, you will receive a notice from the bankruptcy court in the mail within seven (7) days of the date your bankruptcy is filed regarding the date and time of your creditors meeting. If you do not receive a notice, please contact our office.

Where do I go for my creditors or 341 meeting, what time do I need to be there, where do I park, etc.?

The meeting location and date and time depend on where you live:

Kane County, Illinois Clients:

Geneva Creditors Meetings

Where: If you live in Kane County, Illinois your creditors meeting will be held in Geneva at the Old Kane County Courthouse. The address is 100 S. Third St., Room 250, Geneva, Illinois.  Again, this is the Old Kane County Courthouse, downtown Geneva. It is not in the Judicial Center in St. Charles. You should find this courthouse BEFORE the day of the creditors meeting.

When: The meetings are usually held between 11:00 am and 4:30 pm on Mondays.  However, you will receive an email or letter from our office with the specific date and time.  Please arrive 30 minutes early so that Brad can talk with you prior to meeting with the trustee. When you see Brad in the court waive to him to get his attention.

DuPage County, Illinois Clients:

Wheaton Creditors Meetings

Where: If you live in DuPage County, your creditors meeting will be held at the DuPage County Courthouse, 505 S. County Farm Rd., Room 2017, Wheaton, Illinois.

When: The meetings are usually held between 11:00 am and 4:30 pm on Tuesday or Wednesday.  However, you will receive an email or letter from our office with the specific date and time.  Please arrive 30 minutes early so that Brad can talk with you prior to meeting with the trustee. When you see Brad in the court waive to him to get his attention.

Note: Do Not Bring A Cell Phone to Court.  Security will not let you in the courthouse with a cell phone and will make you take your phone back to your car.

Kendall, Will, LaSalle County Clients:

Joliet Creditor’s Meetings

Where: 150 W. Jefferson St., 2nd Floor, Joliet, Illinois

When: The meetings are usually held between 11:00 am and 4:30 pm during the week.  However, you will receive an email or letter from our office with the specific date and time.  Please arrive 30 minutes early so that Brad can talk with you prior to meeting with the trustee. When you see Brad in the court waive to him to get his attention.

Note:  The meetings are not at the courthouse, they are at 150 W. Jefferson St.

The Trustee

The trustee is under a duty to ask certain questions, but he or she will not treat you rudely. All the trustees in the Northern District of Illinois, Chicago Division, are professional, courteous, and sympathetic to those in need of debt relief. In fact, most of the trustees are attorneys who represent debtors in their practices. The trustee must do his/her job, but you will be treated with respect. You should always answer questions honestly. To do otherwise is perjury and bankruptcy fraud, which are both felonies.

Sample Trustee Questions

  1. Did you sign the petition, schedules, statement of financial affairs? Did you sign the Declaration of Electronic Filing your attorney is showing you at this time?  Did you read the petition, schedules, statements, and related documents before you signed them? Did you attorney provide you with copies of all these documents prior to today?
  2. Are you personally familiar with the information contained in the petition, schedules, statement of financial affairs? To the best of your knowledge, is the information contained in the petition, schedules, statement of financial affairs true and correct? Are there any changes you would like to make at this time to make these documents more accurate?
  3. Are all of your assets listed on the schedules? Have you listed all of your creditors on the schedules?
  4. Have you previously file bankruptcy?  If so, when and where?
  5. Are you the beneficiary of any pending will or trust?
  6. Have you repaid any relatives within the last twelve months?  If so, who and how much?
  7. Do you have a domestic support obligation?  (This means child support or alimony). To whom? If you do have a support obligation, it should have been listed on your schedules.
  8. Have you read the bankruptcy information sheet provided by the United States trustee? Do you have any questions about what you read?
  9. Have you made any transfers of any property or giving gifts of any property worth more than $600 in the last four years? If yes: what did you transfer? To whom was a transfer? What did you receive in exchange? What did you do with the funds you receive?
  10. Do you own or have any interest whatsoever in any real estate?
  11. If so, when did you purchase the property? How much did the property cost? How much do you owe on the property? What do you estimate to be the present value of the property? Do you intend to reaffirm and keep the property?
  12. How did you arrive at that value? If renting: have you ever owned the property in which you live and/or is it owner in any way related to you?
  13. Does anyone hold property belonging to you? If yes, who holds the property and what is it? What is its value?

There are other questions that may be asked, but any additional questions depend on the individual facts of your case. Don’t be nervous. I recommend that you arrive at your hearing about thirty minutes early so we can review your case together prior to meeting with the trustee.

What else should I know about my creditors meeting?

Find Attorney Brad Covey: Please look for Brad Covey when you arrive, simply come up to him and check-in. He will usually be looking for several people and may overlook you in the crowd. If Brad is not there, do not panic. He may be running a few minutes late from a prior court proceeding.

Children: You are welcome to bring children to your meeting.  However, you may have to wait up to two hours before you see the trustee so plan accordingly.

Be Early: It is your responsibility to appear at the creditors meeting on time. Our office will not call and remind you of the meeting, since you will have already received two emails or letters, one from our office and one from the court. Be sure you know the location of the creditors meeting. Don’t get lost and be late!

Must Attend: You MUST appear at your creditors meeting.  If for some reason you will be unable to attend please contact our office immediately to discuss your options

Will all my creditors be at the creditors meeting?

It is actually rare that a creditor appears at the meeting. If a creditor does appear, it is usually to ensure they continue to receive domestic support (child support, alimony) or because they believe they were defrauded by you. If you see a creditor of yours in the courtroom be sure and tell your attorney!

What if the Trustee request additional information?

If the Trustee requests copies of documents such as tax returns, bank statements, etc. at the creditors meeting, be sure to provide this to our office within seven (7) calendar days or within the timeframe required by the Trustee. We will then forward the documents to the Trustee. If the Trustee does not receive these documents within the timeframe requested, he may file a motion to have your case dismissed or have you held in contempt of court. So, please follow through on any document requests by the Trustee.

What if the Trustee request changes in my bankruptcy?

If the Trustee requests that we make amendments to your bankruptcy, do not become concerned. This occurs from time to time.

Reaffirmation Agreement and Staying Current on House and Car Payments

Do I need to sign a reaffirmation agreement if I want to keep my house after filing bankruptcy?

First, you must be current and stay current on your payments if you want to keep your home after filing bankruptcy. Even if you are one month behind, the mortgage company may file legal documents with the bankruptcy court asking for permission to get out of your bankruptcy and proceed to foreclose on your home. This is called a Motion for Relief from Automatic Stay.

If you are making payments on a house you want to keep, you may sign a reaffirmation agreement.  Reaffirmation agreements are voluntary on both sides (you and the mortgage company).  There are benefits and drawbacks of signing a reaffirmation agreement.

If you sign a reaffirmation agreement on your home, you have obligated yourself to make payments on the house in the future. The mortgage company will continue to report your payments to the credit bureaus after filing your bankruptcy. If you make your payments to the mortgage company on time each month, you will receive the benefits on your credit report. However, if you sign the reaffirmation agreement and are unable to make payments on the home in the future, your credit will suffer from the negative reports and you may be held responsible for the mortgage debts if the house is foreclosed on in the future.

If you do not sign a reaffirmation agreement on your home, your payments may not be reported to the credit bureaus and it may show the debt on your house was discharged in bankruptcy, but you must keep making your house payments. As a result, your credit scores will not benefit from timely payments on the house. It may also cause some confusion when you try to refinance your house; however, this is usually easily overcome by requesting your payment history that will show you have made timely payments. If you are unable to make payments on your home in the future, you may not be held responsible for the debts on the house, since the debts were discharged in bankruptcy.

What if I do not receive a bill or statement from my mortgage company?

Your mortgage company may stop sending you a bill or statement while you are in bankruptcy. They may also not allow you to make payment electronically.  You may contact them and specifically request that they send a statement to you or allow electronic payments, but it is ultimately up to the mortgage company how they handle this while you are in bankruptcy. The mortgage company may require both of us to sign a release allowing them to send you the bill or statement. You MUST make your mortgage payment(s) each month if you want to keep your home. If you do not receive a bill or statement, simply add your account number on your payment and send it to the mortgage company by the due date. Indicating you did not receive a bill or statement is not a valid excuse for not making your payments. Be sure to keep accurate records that you have made the payments.

What if I get behind on my mortgage payments while in bankruptcy?

If you get behind on your payments while you are in bankruptcy, even one (1) month, the mortgage company may file a Motion for Relief from Automatic Stay. This means that they are asking the bankruptcy court for permission to start or continue foreclosure on your home. If you are behind on your payments as the mortgage company suggest, the bankruptcy court will give the mortgage company relief from the automatic stay and they then can pursue foreclosure.

Do I need to sign a reaffirmation agreement if I want to keep my car or truck after filing bankruptcy?

Yes.  If you want to keep your car or truck you must be current and stay current on your payments. If you are behind on your payments the finance company will not send or agree to a reaffirmation agreement and you may lose your vehicle. If you fall behind on payments, even one (1) month, the finance company has the right to file a motion for relief from the automatic stay asking the bankruptcy court for permission to repossess your vehicle.

If you are making payments on a car or truck and you want to keep it, you are required to sign a reaffirmation agreement. A reaffirmation agreement is a legal document stating that you will continue to make payments on your car or truck after your bankruptcy is final. If you want to keep a car or truck and fail to sign and file a reaffirmation agreement with the court before your bankruptcy is discharged, the creditor has the right to repossess the vehicle.

If you sign a reaffirmation agreement and get behind on payments after your bankruptcy is final, the finance company still has the right to repossess your vehicle, sell it at auction and come after you for the unpaid balance on the loan. It may also appear as a repossession on your credit report.

If you have not received a reaffirmation agreement from our office by the date of your creditors meeting, please contact the creditor and ask that they forward a reaffirmation agreement to our office. The reaffirmation agreement will be sent to you for signing. It is your responsibility to make sure a reaffirmation agreement is filed with the court if you want to keep the car or truck. You should contact our office at least two weeks prior to the expected date of discharge to be sure the reaffirmation agreement has been filed by your creditor. If the reaffirmation agreement is not filed with the court prior to your discharge, the creditor has the right to repossess the car.

What happens if I change my mind about keeping the car after signing the reaffirmation agreement?

If you sign the reaffirmation agreement and then change your mind, you may rescind the reaffirmation agreement before the bankruptcy court enters a discharge order or before the expiration of the 60-day period that begins on the date your reaffirmation agreement is filed with the court, whichever occurs later. To rescind a signed reaffirmation agreement, you must notify Attorney Brad Covey, the creditor and the court.  If you do not cancel or rescind the reaffirmation agreement under the correct court procedure, you will be responsible for paying the debt. As a result, do not wait until a few days before the deadline to rescind the agreement.

What if I do not receive a bill or statement from the finance company for the car/truck I want to keep?

It is possible the finance company will not sent you a bill while you are in bankruptcy; however, that is no excuse for not making your payment. You should pay your car/truck payment when it is due. Be sure to add the account number to your check.

What happens if I get behind on my car/truck payment while in bankruptcy?

If you get behind on your payments while you are in bankruptcy, the finance company may file a Motion for Relief from Automatic Stay. This is a legal document asking the bankruptcy court for permission to repossess your vehicle. If you are behind on your payments as the finance company implies, the bankruptcy court will almost always give them permission to repossess your vehicle. Even if you bring your car/truck payments current, you will be charged the finance company attorney’s fee. This is usually included in the amount needed to bring the loan current.

Do I need to sign a reaffirmation agreement if I DO NOT want to keep a car or truck?

If you own a car or truck and do not want to keep it, you should not sign a reaffirmation agreement.  If you are surrendering a vehicle, you may contact the finance company to make arrangements to turn in the vehicle or have them come and get it. Be sure to get a business card or other documentation from the person who takes possession of the vehicle.

Do I need to sign a reaffirmation agreement for furniture, computers, appliances, etc.?

If you have owned these items for several years and there is little or no value in the assets, the creditor may not incur the expense of repossessing the items. However, you should be prepared to surrender these items to the creditor should they pursue repossession and you have not signed a reaffirmation agreement.

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