Category Archives: Bankruptcy Tips and Advice

Why Did I Receive A Letter From REM Division of Notification?

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So you filed for bankruptcy protection under Chapter 7, 11 or 13 and now you are receiving all this information/marketing material in the mail. One of the letters could be from REM Division of Notification. If you do not have much time right now just throw the letter away, burn it, shred it or return it to the sender and stop reading now. REM Division of Notification DOES NOT have any to do with the United States Bankruptcy Court or have anything to do with your actual bankruptcy case. They are just trying to pry some money out of your hand for now good or apparent reason.

Filing Bankruptcy Is A Public Record

Yes, the bankruptcy filing is a public record. Like all legal matters bankruptcy records are open to the public. You need a Public Access to Court Electronic Records account and login. After you create a PACER account it will cost $0.10 a page to review the documents. So companies like REM Division of Notification pay $0.10 a page to obtain your information and send marketing material to you. There is nothing wrong with that until you read the letters that come in the mail. I have yet to read a marketing letter that is not misleading or confusing to our clients. Sage Financial sends marketing material to bankruptcy filers to complete the second required course for around $50.00. While it is true a second course is required to receive a discharge of eligible debts when filing bankruptcy. The company we recommend to our clients only charges $7.95 for the second required course. Every now and then we have a client get fooled by Sage Financial and use them for the second course and they waste $40+. On a side note, Google also finds the bankruptcy filing information because the meeting of creditors hearings are posted as a PDF on the bankruptcy court’s website.

REM Division Of Notification’s Letter Is Misleading

First, REM Division of Notification has nothing to do with the government or the United States Bankruptcy Court. The letter in the top left-hand corner says “Bankruptcy Notification Division” as if the letter is an official communication from the bankruptcy court. The second misleading statement is in the first sentence. The letter says “Your Bankruptcy has been filed by the Court System and the information needed to access your records is printed above.” No, that is false and misleading again. Your bankruptcy attorney has records of your bankruptcy petition and all you should need to do is call them for a copy of the filed documents. The REM Division of Notification letter actually does not provide any information to access records. Next the letters says, “Please keep this letter because during your bankruptcy there will be 3 stages you will go through in order to complete the process. Many times the data centers are very slow in or with sending you the information you need so we will keep you informed and supply you with any available court information you may request using our web site during your proceedings.” What data centers? Once a bankruptcy case is filed certain documents are served directly by the court and the court is NOT slow in providing service. There are deadlines for everything, so it is actually not possible for notices to not be sent timely.

You Should Be Receiving The Information You Need From Your Bankruptcy Lawyer

Hopefully you used good judgment and retained a bankruptcy lawyer to prepare and file your bankruptcy petition. If so, then that lawyer should be providing you with all the information you need from start to finish. That is part of what you are paying the lawyer for. So what does REM Division of Notification actually do? Who knows? It appears they will provide you will the filed documents from your bankruptcy case for a fee. These are the same documents you should get from your attorney for free or can obtain directly from the bankruptcy court yourself for $0.10 a page. REM Division of Notification probably only has a normal PACER account just like me, pay $0.10 a page for documents, then fool people into using their service and charge people something far over $0.10 a page so they make a lot of money.

Ask Your Bankruptcy Attorney

If you filed for bankruptcy protection and have questions about the documents you are receiving in the mail ask your bankruptcy attorney to explain them to you. Before calling your bankruptcy attorney scan and email the letter or fax the letter to your attorney first. It is difficult to explain a document or answer questions if we cannot read the actual letter the questions are about. So please forward the document first, then call and ask questions.

Can I or Should I File a Motion to Reopen My Bankruptcy Case?

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Bankruptcy cases normally close for two reasons: 1) all of the requirements have been fulfilled and the allowable debts have been discharged or 2) one or more of the requirements have not been completed as requested and the bankruptcy case has been dismissed. The debts in cases that have not met all the requirements that are closed have not been discharged. If you need anything further from the bankruptcy court after the closure of your case you need to file a motion to reopen your bankruptcy case. Pursuant to 11 U.S. §350(b), “A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.” Federal Rules of Bankruptcy Procedure Rule 9024 indicates a motion to reopen a bankruptcy case is not subject to the one year limitation prescribed in the Federal Rules of Bankruptcy Procedure Rule 60. This means that you may bring your motion to reopen a case years after your case was closed. The court charges a filing fee to reopen your case. So why would you want to reopen your bankruptcy case? Here are several more common reasons why you may want to do so:

1. You did not File a Financial Management Certificate with the Court

One of the requirements in receiving a discharge pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is that you take a mandatory financial management course. This class provides information about managing your finances and attempts to teach you how to budget. Once you complete the course you receive a certificate of completion. This certificate is also referred to as the financial management certificate. You need to file this certificate with the court in order to receive a discharge of your debts. If you do not file this certificate with the court your bankruptcy case is closed without a discharge. This means that all your hard work leading up to and including the bankruptcy filing is for naught as the creditors can still try to collect their debt from you after the bankruptcy case is closed. This is true even if you were in a Chapter 13 bankruptcy case and you made all the required payments to the Chapter 13 trustee according to your Chapter 13 plan. If your case is closed without a discharge because of the non-filing of the financial management certificate, the fix is simple: contact your bankruptcy attorney to reopen your bankruptcy case (and pay the court filing fee) to file the certificate. Once you file the certificate you will receive a discharge of your debts and the case will be closed again.

2. You did not Pay the Filing Fee Installment as Required by Court Order

Some people choose to pay the court’s filing fee in installments due to financial issues. The court issues an order with deadlines to make each filing fee installment payment. If you miss one installment even by one day the court may dismiss your case for not following their order. If this is the case you need to file a motion to reopen the bankruptcy case (and pay the court filing fee to reopen) to pay the remainder of the filing fee. Note there are two fees discussed here: the court filing fee to file your bankruptcy case and the court filing fee to reopen your case.

3. You did not Pay the Chapter 13 Plan Payment as Required

If you filed a Chapter 13 Bankruptcy you must make each and every monthly payment to the Chapter 13 Trustee to obtain the relief you seek. If you do not abide by the terms of the approved Chapter 13 plan, and miss a payment the trustee, the trustee will file a motion to dismiss your case with the court. If you are unable to pay the entire amount of arrears you can consult with your bankruptcy lawyer to see what alternatives are available to you. If your case is dismissed you may choose to reopen your bankruptcy case to pay the missed payments and continue on with your Chapter 13 Plan.

4. You Want to File a Motion to Avoid a Judgment Lien

You can file a motion to avoid a judgment lien from your personal or real property in a Chapter 7 or Chapter 13 bankruptcy case if the lien impairs your exemptions. Many people who file Chapter 7 bankruptcy cases pro se or with a bankruptcy petition preparer (meaning they did not have a bankruptcy attorney and they represent themselves in the case) do not know the law, that judgment liens can be avoided or know how to file a motion to avoid a judgment lien. This is one of the many reasons you should always consult with bankruptcy lawyers before filing bankruptcy. Even if your case is closed and your debts are discharged you may file a motion to reopen your bankruptcy case to file the motion to avoid a judgment lien that impairs your exemptions.

5. You Want to Add Creditors to Your Bankruptcy Case

If you forgot to list a creditor in your bankruptcy case, your debts have already been discharged and your case closed, you can reopen your bankruptcy case to include your forgotten creditors depending on the jurisdiction in which you live. In the 9th Circuit if you have a no-asset Chapter 7 bankruptcy case (meaning all your assets are exempt and therefore no assets were administered by the Chapter 7 Trustee) this is not necessary given the creditors would not have received anything even if they were notified of your bankruptcy filing.

The above list is not an exhaustive list of why a motion to reopen a bankruptcy case may be filed. There are numerous other reasons why other parties like the trustee assigned to the case might want to reopen a bankruptcy case. The closure of your bankruptcy case does not necessarily mean your case is over.

Unfair Collection Methods and Violations of the Fair Debt Collection Practices Act

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I received a very disturbing call the other day from one of my clients. She essentially told me a collection agency called her and told her there would be a warrant issued for her arrest if she did not pay her outstanding debt. The collection agency said the warrant was for issuing a bad check. My client was confused because she did not write any bad checks, but at the same time she was scared because the collection agency was very convincing and the representative was spewing all the “legal mumbo jumbo” (her words) at her that she did not understand. Instead of contacting us, her bankruptcy attorneys, she called all her family members and friends and paid most of the amount owed to the collection agency because she was afraid that she would be sent to jail. Does this sound familiar to you? Unfortunately this sounds very familiar to us. We have even heard worse stories than this. We have heard of collection agencies calling parents of people that owe money and threatening to send their children to jail because their children did not pay their debts. The parents of course want to do anything they can to prevent their children from going to jail so they pay the collection agencies. Collection agencies prey on people who do not know the law and scare them into paying their debts even when they cannot afford to make the payment. This is what the Fair Debt Collection Practices Act (“FDCPA”) seeks to prevent.

The FDCPA was enacted by Congress to ensure that debt collectors collect their debts in a fair manner. The FDCPA ensures that debt collectors do not step over the line with harassment and unethical practices. Under the FDCPA, debt collectors are prohibited from calling you any time before 8:00 a.m. and after 9:00 p.m. in YOUR time zone. It doesn’t matter what time zone the debt collector is calling you from. Debt collectors cannot call anyone other than you to collect the debt from you. That means they cannot call your parents, your siblings, or your friends unless you give permission for them to do so. If they do contact your relatives or friends the only thing they can do is ask how they can contact you. They cannot tell anyone else that you owe them any money. They cannot lie or use deceptive or misleading statements to you in an attempt to collect the debt. They cannot use unfair practices against you (such as threatening to put you in jail or to take away your possessions if they cannot legally do so).

Communication

If you tell a debt collector you have a bankruptcy lawyer the debt collector cannot contact you any further. All communication from that point on has to be through your legal counsel. If you tell the debt collector (or if they reason to believe) that they cannot contact you at your work because it is against work policies to receive personal phone calls the debt collector must immediately stop calling your place of employment. Another gem that most consumers do not know about is if you send something to the debt collector IN WRITING that you refuse to pay the debt or that you want them to stop contacting you, the debt collector can no longer contact you unless it is to tell you that their efforts to contact you will stop or to let you know they are proceeding with certain remedies against you (for example, if they are going to sue you).

Harassment

The FDCPA forbids debt collectors from harassing you when they call you. That means they cannot yell at you, curse at you, threaten you, use obscene language, or annoying you by constantly calling you. When the debt collectors call you they have to tell you who they are and where they are calling from. I have heard of clients receiving harassing phone calls from people that use abusive language and refusing to state where they are calling from. You do not have to take such abuse.

If your debt collectors violate the FDCPA you have a remedy against them: you can sue them for civil liability under 15 U.S.C. 1692k. One caveat: in order to be liable under the FDCPA, the debt collectors generally have to be a third party collection agency. They are generally not the original creditors. For example, if you owe money to Chase, Chase is not a debt collector. They are the original creditor. Certain states may have their own state laws against unfair and deceptive collection activities though. California has the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) which mirrors the Fair Debt Collection Practices Act. However, in California’s Rosenthal Act, original creditors can be held liable if they do any of the prohibited acts.

What Should I Avoid Prior to Filing for Bankruptcy Protection

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In addition to the previous article, How to Avoid Fraud Charges in Bankruptcy, there are certain things that you should not do prior to filing for bankruptcy, as it may inconvenience you, or hinder or delay your case.

Banking

When it comes to banking, most consumers are loyal to their banks.  The most common phrase I hear is, “But I’ve been banking with “X” Bank for more than “X” years!  They have been very good to me.”  These banks are so good to their customers that they are allowing them to take out credit cards that are linked to their bank accounts.  What the consumers don’t realize is that if they are behind on their payments, the banks have the ability to offset the debt by taking the money from their customer’s bank accounts.  They are able to do so because the contracts signed (which most people don’t read) allow them to do so.  Thus, consumers are surprised to find that when it comes time to send off the rent check or mortgage payment, they don’t have the money to do so because their bank already has a chunk of their money.  To avoid this scenario, do not bank at an institution where you owe money.  Some consumers think they are safe if they do not have the funds in their bank accounts.  This is not always true.  Banks can still offset the debt, and then you would be considered overdrawn, and now you would owe bank fees and bounced checks due to non-sufficient funds.

Paying Down Debt

If you were trying to avoid bankruptcy, then paying down your debt is a great idea.  However, if you already know that your only available option is to file bankruptcy, you should not be paying back your creditors, especially your family and friends, whom are considered “insiders.”  Paying creditors back is considered a “preference.” If you have paid back more than $600 to an “insider” in the past year, the trustee has the option of going after the person you paid back to get the money back for the bankruptcy estate, if the funds are significant enough.

Receiving Inheritance

If you believe you are listed as a beneficiary in a will, trust, or life insurance policy, and you are about to receive the inheritance within the next six months, you may not wish to file for bankruptcy.  Any proceeds received within 180 days of the filing of your bankruptcy petition are considered to be a part of your bankruptcy estate.  If you receive a substantial inheritance, there may not be enough exemptions to protect the inheritance, and in a Chapter 7, the inheritance could be used to pay off your debt to your creditors.  Thus, if you think you will receive a substantial inheritance, you may be better off trying to negotiate with your creditors instead.

Lying to Your Attorney

If you retained the services of an attorney to proceed with your bankruptcy case, it is imperative that you do not lie to them about your finances.  You should not hide your assets from your attorney, nor should you lie by omitting certain important information regarding your situation to your attorney.  Your attorney cannot protect you if they do not know about your problem.  If there was an issue in your bankruptcy case, you do not want your attorneys to be the only one in the room surprised by the problem.  Your attorneys are not mind readers, they would not know that they need to help you if you do not tell them.

If you need the help of an experienced bankruptcy lawyer or bankruptcy lawyer in Union City, call us today at 877-9NEW-LIFE or 877-963-9543 to schedule a free consultation.