December 21st, 2009
Anyone filing for bankruptcy will have to attend a meeting of creditors scheduled approximately 30-45 days after filing your voluntary petition. It is mandatory to attend, and your case can be dismissed for failure to attend, or if you have not provided certain documents to the trustee prior to the scheduled meeting of creditors. All of the creditors receiving notice of your case are invited to attend; although they rarely attend. The creditors still have rights under the bankruptcy code even if they do not attend your meeting of creditors.
If you have been working with an attorney, you should be well prepared for the questions asked by the assigned trustee in your case, because it will be very similar to the questions you were asked by your attorney at your initial meeting and when the paperwork was prepared. The trustee will place you under oath, verify your social security number and driver’s license, and then ask you relevant questions. The questions vary depending on whether your case was filed under Chapter 7 or Chapter 13.
After the trustee asks his or her questions, the meeting is concluded. If a creditor happens to be in attendance, the creditor may ask questions of you before the meeting is concluded. Usually within 5½ to 6 months after you file a Chapter 7 case, you will receive your discharge. In a Chapter 13 case, you must complete your plan payments in order to receive your discharge.
Tags: chapter 13, chapter 13 bankruptcy, chapter 7, chapter 7 bankruptcy, meeting of creditors
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October 24th, 2009
During the height of the real estate bubble, many people invested in real estate. Often investments were made in residential homes, but commercial properties were also acquired. It seems that all real estate has experienced a downturn in value and much of the financing or refinancing took place when real estate values were at their highest.
This means that today, many real estate investments are underwater – i.e. the debt is greater than the value of the investment. To add fuel to the fire, many of the residential tenants and commercial tenants are also suffering from the economic downturn and have not paid their rent, forcing the real estate investor to either come out of his or her own pocket to make up the difference to the mortgage company or worse, are unable to pay for the mortgage at all.
Many investors just want out of the negative cash flow situation. Others are facing threats of foreclosure, or may already have been served with the foreclosure lawsuit. The various pieces of legislation passed this year do not protect the real estate investor. If the property is either short sold or foreclosed upon, the investor faces the very real possibility of the mortgage company seeking to collect against the investor for the deficiency balance (the amount still due on the mortgage note after the short sale or foreclosure) and the 1099 form being sent to the IRS to report the deficiency balances as debt forgiveness income (declaring that income taxes are due to the IRS on the amount of debt forgiven).
An investor can protect himself or herself from both the collection of the deficiency judgment and the debt forgiveness income by filing bankruptcy. If certain criteria are met, the real estate investor may even be able to file Chapter 7 bankruptcy even though the investor may still continue to earn income.
Nancy Draughon
www.NorthFloridaBankruptcy.com
Tags: chapter 7, chapter 7 bankruptcy, foreclosure, investment real estate, jacksonville bankruptcy, real estate investor
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