This question was posted recently on our bankruptcy forum:
“Can a retained lawyer stop a judgement enforcement attempt before the actual bankruptcy is filed, and how much time between when an attorney is retained before the case must be filed? If you originally had credit card debt and it has been resold numerous times, must all the different collectors for the same debt need to be listed? What do you do if you know income taxes were filed but the records are lost?”
These questions were posted recently on a bankruptcy forum. Keep in mind that these answers may be true in general, but you should consult an attorney who is familiar with the bankruptcy laws of your state to confirm how the laws apply to your situation.
Can a retained lawyer stop a judgment enforcement attempt before a bankruptcy is filed, and how much time between when an attorney is retained before the case must be filed?
In answering the question above, let us assume you owe a significant amount of money to a credit card company and are unable to make the payments. In such a case, the credit card company may file a suit against you. If you do not respond in the allotted time frame, the court will rule in favor of the credit card company with a summary judgment. With the summary judgment, the credit card company now has a lien on your personal property (which may include your home). The credit card company’s attorney may now take steps to enforce the judgment by identifying your personal property and taking steps to seize it in an effort to sell the property to pay off the unpaid credit card balance (plus interest and attorney fees).
If you want to stop the creditor from starting to seize your property to enforce the judgment, you can have an attorney file what is called a Motion to Avoid a Judicial Lien. This motion informs the court that you are entering into bankruptcy and requests that once you have completed the bankruptcy, the lien be removed from your personal property. If the court accepts the motion, the lien will be removed and the judgment may be erased in full, depending on the type of bankruptcy you file and assuming you have included the credit card debt on the list of debts included in your bankruptcy.
In general, once you have retained an attorney and they have an understanding of your case, they can file the Motion to Avoid a Judicial Lien and the bankruptcy petition within a few days or possibly on the same day in extreme cases. You just need to be prepared to quickly provide the basic information the attorney needs to complete the necessary paperwork to file the bankruptcy. In addition, you must attend an approved credit counseling class (which may be as short as 90 minutes long) no later than the date the bankruptcy is filed.
If you originally had credit card debt and it has been resold numerous times, must all the different collectors for the same debt be listed?
No, you do not have to list all the different collectors that have held a given debt in your bankruptcy petition. It is generally sufficient to list the current collector of the debt. If you want to be thorough in being sure that the debt is identified clearly in your bankruptcy, you can list both the current collector and the original debt holder.
What do you do if you know income taxes were filed but the records are lost?
In a bankruptcy context, if you have already filed your income taxes for the current year, you losing your records is generally not relevant, as the Internal Revenue Service (IRS) will have the various forms and supporting evidence you submitted. You would only potentially need your records if the IRS audits you, which is outside the subject of bankruptcy.
A more important question concerning bankruptcy and income taxes pertains to what happens to your refund if you are due one. If you receive an income tax refund and spend it on family necessities (e.g., food, shelter, clothing) before you file bankruptcy, there is generally no reason you cannot keep those items. However, if you file a bankruptcy before receiving your income, the options to keep your refund vary widely from state to state, depending on if the refund relates to an earned income credit, child care credit, or fits within the amount of any other exemption allowed by your state.
Do I need to hire an attorney to discuss any of the above situations?
It is generally a good idea to consult a bankruptcy attorney when you are faced with debt you cannot afford to pay or other bankruptcy-related questions you are unsure how to address. As noted above, the specific bankruptcy laws that apply to your situation may vary depending on where you live, so it is important that you consultant with an attorney who is familiar with the bankruptcy laws for your state.
By completing the short form below, a bankruptcy attorney who knows the applicable bankruptcy laws for your state will review your case free of charge and provide you with initial guidance on how you should proceed. This review is 100% confidential and does not obligate you to anything further, so please take advantage of this free opportunity to obtain professional legal help today.
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