After you file a Chapter 7 or a Chapter 13 bankruptcy, you will be required to attend a brief hearing called a Section 341 Meeting of Creditors. Bankruptcy professionals usually refer to this hearing as a "341 hearing."
Your 341 hearing will be held between 30 and 45 days after you file and it will last about 5 to 10 minutes. Although nothing final happens at your 341 hearing and most of the questions are fairly simple, you may be concerned about this hearing. Assuming that you have never been thorough bankruptcy before, it is perfectly understandable that you would be a little nervous. In this short video, Clark and Washington associate attorney Laura Post talks about 341 hearings. If you have any questions about 341 hearings – please feel free to call Laura or any of our staff lawyers.
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Every week, Clark and Washington gets calls from elderly clients asking for information about bankruptcy because of unmanageable debt. And all too often, this debt arises because the senior overspent on television home shopping programs or because the senior succomed to the pitch of a telemarketer.
Last year the New York Times ran a story called "Bilking the Elderly, With a Corporate Twist." The story documents the process of how mailing list vendors compile detailed information about seniors using telemarketing phone scripts, and how these lists are sold to unscrupulous companies who rip off elderly victims by selling useless products and services.
One company, InfoUSA Info advertised lists of “Elderly Opportunity Seekers,” consisting of 3.3 million older people “looking for ways to make money,” and “Suffering Seniors,” 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe that their luck can change.”
Often bankruptcy can eliminate the debt that arises from these scams, but not before a senior loses his life savings or puts his home at risk. If you are a senior or if you are a family member of a senior:
- put your name on the national no-call directory
- avoid revealing personal information if you enter sweepstakes as many sweepstakes are designed to collect personal information that will be sold to telemaketers
- create a "disposable" email address with Yahoo or Hotmail for use in any online form
- never reveal bank or credit card information to an unknown caller
- don't be afraid to hang up if you feel uncomfortable
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As you may have read, one of the practical implications of the October, 2005 changes to the bankruptcy law has been to "push" debtors away from Chapter 7 and into Chapter 13. Chapter 13 is still a form of bankruptcy and it is a very powerful tool, but you need to be very careful at the outset of your case to make sure that you and your lawyer create a liveable and reasonable budget.
Clark and Washington sees dozens of clients each month in our five Tampa/St. Pete offices and our attorneys regularly meet to compare notes and to discuss current cases. One of the changes that we have implemented in our case evaluation process has been to emphasize to our clients the importance of giving us accurate information about what the client and members of his household actually spend each month. Chapter 13 lasts between 36 and 60 months and we need to work hard to make sure that we do not commit our client to a Chapter 13 payment that our client cannot afford.
We now suggest that our new clients keep a "to the penny" diary about spending habits. You should keep this diary for a minimum of two weeks, although 30 days would be better. You need to write down every penny you spend and keep receipts whereever possible.
Based on experience, we find that:
- most people underestimate how much they spend on food – both groceries and eating out
- many people spend $25 to $100 per month on items like cigarettes, checkout line magazine or candy purchases and other items that don't otherwise make their way into a budget
- kids are expensive!
If we have receipts and documentation we have resources to argue for a Chapter 13 payment that reflects reality, rather than estimates. Keeping track of what you spend is always important, but never more so than when you are considering bankruptcy.
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Will Congress give bankruptcy judges the power to modify the terms of mortgage loans? Scripps News reports that several bills have been introduced in Congress to do just that. These bills would limit relief to homeowners who didn't earn enough income to afford mortgage payments, had a subprime or nontraditional loan or faced imminent foreclosure. Bankruptcy judges would be required to set commercially reasonable interest rates on modified mortgages and not reduce loan balances to less than the market value of the property.
Needless to say, advocates for the mortgage industry are not happy about this prospect. They envision a situation in which homeowners turn to bankruptcy to rewrite unfavorable mortgage loan terms and they fear a slippery slope in which the mortgage securities market becomes unstable because of a lack of certainty regarding the value of a mortgage backed security.
As a bankruptcy law firm, we see many situations in which the onerous terms of a mortgage note limit the scope of relief that a debtor can obtain. Further, bankruptcy loan term modifications are commonplace in automobile, furniture, jewelry and other commerical loans, without causing havoc in those industries.
Despite the limited scope of this relief, President Bush has stated that he will not sign any change to the bankruptcy law that would give bankruptcty judges the power to modify mortgage loans. We will keep an eye on this very controversial topic and report any significant developments.
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When is the right time to file for Chapter 7? Clark and Washington's Jamie Allen explain why Chapter 7 can provide the most benefit to you when are not expecting your financial situation to get much worse.
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