Detailed Questions and Answers about Chapters 7 &13

What is bankruptcy? Bankruptcy is a legal proceeding in which a person (the debtor) who is unable pay his or her bills (the creditors) can get a fresh start. Bankruptcy is started by filing a petition with the Federal Bankruptcy Court. The petition discloses all of the debtor's financial affairs including assets and liabilities. Filing bankruptcy immediately and instantly, though sometimes only temporarily, stops creditors from seeking to collect debts. Bankruptcy may also eliminate a debtor's obligation to pay many, if not all, debts incurred prior to the bankruptcy filing.

What are common reasons for filing bankruptcy? Often a debtor (the person or married couple who is filing for bankruptcy) has: seriously overextended credit; become unemployed; experienced a reduction in income; suffered business reverses; significant medical expenses; marital problems such as divorce or separation, or very often is simply a victim of poor financial planning and credit card interest rates, late charges and over-limit penalties.

When should bankruptcy be considered? A debtor should consider bankruptcy when: the interest charges on debts are so large that the monthly payments cover only the interest; there are unpaid bills such as would be difficult or impossible to pay off in the foreseeable future; there is a threat of foreclosure of a house or repossession of a car; a debtor is receiving frequent calls from creditors or summonses for civil court actions for nonpayment of debt or debtor's wages are being garnished.

What are the different types of bankruptcy? Chapter 7 (sometimes referred to as "straight bankruptcy") is where a debtor's nonexempt assets are liquidated and most unsecured debts are discharged. Chapter 13 (sometimes referred to as a "wage-earner plan") is where a debtor retains his assets but sets up a payment plan by which creditors are paid all or part of what is owed over a period of 3 to 5 years. A chapter 13 debtor must have regular source of income, unsecured debts of less than $290,525, and secured debts of less than $871,550, and an ability to set out a budget whereby he realistically has some amount of money to pay his creditors (through the trustee) on a monthly basis. Chapter 11 is generally used for

business reorganization or individuals with debts in excess of the chapter 13 limits. Chapter 12 is used for family farmers and chapter 9 is for municipalities. What is Chapter 7 Bankruptcy? Chapter 7also called "straight" or "liquidation" bankruptcy, is a way to legally discharge which is a legal term meaning wipe out or cancel your debts. When a person or married couple file a Chapter 7 bankruptcy, they are basically seeking a fresh start financially. Most of my clients complain that creditors and collection agencies are calling them at home and at work, utility companies have shut them off or are threatening to do so, or perhaps their wages are being garnished. Filing a Chapter 7 bankruptcy can stop all of these dead in there tracks. Basically filing a Chapter 7 is accomplished by filing papers with the United States Bankruptcy Court asking for protection. As soon as your case is filed (stamped with the date and time) an Order for relief is entered. The Order for relief creates the "automatic stay" described in more detail below. Most people who file a Chapter 7 are seeking to wipe out debts like credit cards, medical bills, utility bills, bank and credit union loans, car loans for which the car was repossessed, in an accident with no insurance or just broke down before it was paid off. A Chapter 7 discharge will wipe out or extinguish all of these debts. Chapter 7 involves an exchange between the person filing and the US Trustee, whose job it is to gather any non-exempt property of the debtor for the benefit of creditors. The person filing the Chapter 7 in exchange for getting all of their dischargeable debts wiped out, must disclose all of their assets (things and rights they own) to the Trustee. In the vast majority of Chapter 7 cases that are filed, nothing is taken and sold by the Trustee, most cases are no asset cases. Remember, Chapter 7 is designed to leave you with a fresh start. This means that the law is very generous in what you are allowed to keep or claim exempt. The most important thing is to list or disclose everything you own in your bankruptcy petition. Most, but not all debts are dischargeable in Chapter 7 bankruptcy. Chapter 7 gives you a fresh start on your economic life within certain limitations. A person cannot file a Chapter 7 more than once every 6 years and certain types of debts are not dischargeable. Student loans, most taxes, alimony and child support and debts for death or personal injury caused as a result of drunk driving or other intoxication are not dischargeable as a matter of public policy. Also, some people may have used credit in a fraudulent manner. For example, Chapter 7 bankruptcy is not for people who run up their credit cards with the intent of shortly thereafter going into bankruptcy. Chapter 7 bankruptcy is also not for people who charge much more than they could ever afford to pay just to discharge those debts. Moreover, it is not for anyone who basically acts in a dishonest or fraudulent manner. It is for the honest debtors, who, for circumstances they cannot control, find themselves overwhelmed in debt. Chapter 7 is also generally not appropriate for someone trying to save his house from a mortgage foreclosure. Generally, if you are about to lose your home for any reason, a Chapter 13 should be filed. Further, Chapter 7 is not for someone with the ability to make some reasonable payment on a month basis to unsecured creditors. For instance, if your budget would allow you to pay even ten cents on a dollar to creditors, you should generally file a Chapter 13 instead. See attorney Walter Metzen for a professional analysis of your financial situation and a thorough discussion of which Chapter may be best for you.

What is the "automatic stay"? THE AUTOMATIC STAY IS THE COURT ORDER THAT STOPS CREDITORS IMMEDIATELY, even if they don't yet know you filed bankruptcy. The automatic stay is one of the most powerful tools you as the debtor get when you file your bankruptcy petition. It happens automatically upon the filing of your case either Chapter 7 or Chapter 13. It is so powerful that it can stop a foreclosure, a car repossession a utility shut-off and even a wage garnishment. I have even had the repo man return a car that he took from my client because a bankruptcy had been filed even though the repo man did not know. Most creditors who are regularly in the business of lending money know and respect the power of the automatic stay in bankruptcy and will abide by the law. The automatic stay is an automatic injunction against most continued collection activities. The automatic stay goes into effect as soon as your bankruptcy case is filed with the bankruptcy court. The automatic stay is important because it protects you from continued harassment from your creditors. The automatic stay applies to virtually everyone and stops virtually all activities that are calculated to collect money from you, or make it uncomfortable or embarrassing on you so that you want to pay. It stops everyone except for criminal courts demanding fines or restitution. It does not get you out of paying child support. It does not get you out of spousal support. It does not stop you for being arrested for not paying a fine. It does not give you criminal immunity. The automatic stay is "automatic". The automatic stay goes into effect immediately upon the filing of your bankruptcy petition. Should I seek credit counseling before bankruptcy? Many of my clients have tried credit counseling before coming to see my to file a bankruptcy. Credit counseling agencies which advertise heavily on television and call themselves non-profit agencies. Credit counseling agencies have no "real power" to deal with your creditors. Most actually get paid a percentage of the money that you pay your creditors through the agency. Most charge a start-up fee and a monthly maintenance fee which over the long run can add up significantly. Most people in credit counseling eventually do need to file a bankruptcy to deal with their creditors so the credit counseling was in vain. Some credit counseling agencies request access be given to a persons checking account so that the collection agency can take money out of the account every month or every pay period. I strongly discourage giving anyone such access to a bank account, I have seen many problems result from giving such access, such as bounced checks and inability of the debtor to make other necessary payments due to a disruption in their income. Credit counseling may be a good idea to avoid bankruptcy, however, keep in mind certain things. Most credit counselors get paid by a percentage of what is paid to the creditors, by the creditors receiving the funds. this means that they have an interest in seeing that the creditors get the maximum. Credit counselors, therefore, do not have a "confidential relationship" with you. A confidential relationship is the type of relationship you have with an attorney. The attorney is legally obligated to avoid conflicts and represent only your interests. An attorney could be disciplined or disbarred from accepting payments from adverse parties, such as your creditors. Statements made to attorneys are always confidential, if made in private

(between you, your spouse and the attorney, with no one else present). Statements made to a counselor are not. Does this mean that credit counseling is always a bad idea? No, credit counseling can be good for some people. It helps many people avoid bankruptcy, however, it is an open question whether is makes much of a difference on your credit record. In some circumstances, credit counseling is a very wrong answer. These include many of the reasons that people file chapter 13 in the first place: 1. You should not seek credit counseling first (you should seek legal counsel) if your home or other real estate is in foreclosure. 2. You should not seek credit counseling if you have been sued in court. 3. There may be other reasons. If you have a question, it is always better to speak with an attorney first. Credit counselors simply cannot give legal advice you can rely upon, like an attorney can. I owe a lot of money to DTE Energy or SBC Ameritech, will they shut off my utilities if I file a bankruptcy? No, a utility may not deny you service because you exercised your constitutional privilege to file a bankruptcy petition seeking relief from your creditors. In fact, I have filed many cases for individuals or couples for the only reason that they have huge utility bills and have been shut-off. The filing of a Chapter 7 will wipe-out all the past debt owed to the utility and the company has to start you fresh as if you just moved to Detroit from Timbuktu. The utility companies by law cannot deny you service simply because you filed bankruptcy. The law recognizes them as a public monopoly because you can't simply go to Meijer's and buy electricity or natural gas for your home. The way it works is this: You file your bankruptcy petition, being sure to list whichever utility company you owe on your list of creditors (schedule F and Matrix). Approximately 10 days to 2 weeks later, the Bankruptcy Court mails out notices to all of the creditors you listed in your case. All of the utility companies regularly get bankruptcy notice and most even have a bankruptcy department. The company looks up all the accounts in your name, sometimes using a combination of your name and social security number. Any and all accounts in your name are then wiped out and started fresh back to the date your petition was filed. Note: You are responsible for paying the new utility debts you incur after filing your bankruptcy (either Chapter 7 or 13). If your utilities were cut off prior to your filing bankruptcy, tell my office and a fax will be sent to the utility company with proof of your filing and instructions asking them to restore service. They will always restore the service unless it was turned on illegally (which is fraud and may not be dischargeable) or it turns out that the utility service was in some other person's name (who did not file bankruptcy). Your utility company may not discriminate against you because you have filed a bankruptcy case. This means they must continue supplying you with service and may not cut you off. Please note that your utility company will probably request a deposit from you for continued service. The deposit remains your money, but is held by the utility company as security for service. The deposit is usually equal to approximately twice your average monthly bill. If you owe no

money to your utility company and do not list them as a debt, then utility companies may waive the requirement for a deposit. Note: Some services such as cable tv, internet or cell phone services are not considered utilities since you can go to another service provider (i.e. they are not a monopoly) or they are not considered essential utilities (yet). How quickly can I or we (joint husband and wife cases) file a Chapter 7 Bankruptcy ? Very quickly depending on your situation. I have literally filed a bankruptcy case within the same hour that the person came to see me. This was an emergency situation to prevent the foreclosure of the person's home. Filing the bankruptcy before the sheriff's sale was concluded stopped the sale and gave the debtor a breathing spell. Usually depending on your situation and the difficulty of your case, I prepare your case and file it within a matter of a few weeks of your initial consultation. In cases where a person's wages are being garnished, I will file the case the same week. How quickly the case gets filed also depends on you. All documents required must be supplied to my office and all Court and attorney fees required must be paid before the filing. My office generally files cases every week. If your case requires an urgent filing, please come see me in my office to make arrangements to get your automatic stay in place as soon as possible. I'm married and want to file alone. How will my filing Bankruptcy affect my spouse? There is no requirement to file jointly if you are married. Many of my cases are filed for only one spouse of the married couple. If you are married and need to file by yourself the other spouse's credit report is usually not affected, because it is separate and distinct from yours, especially if there are no joint creditors. If both husband and wife are joint on a debt (such as a credit card or medical bill), I would normally recommend a joint bankruptcy filing. How much debt do I need to be in to file a Chapter 7 Bankruptcy? There is no minimum debt requirement in order to be able to file a Chapter 7. The analysis of whether to file a Chapter 7 depends more on your present ability to repay your creditors. Other factors to consider are the level of creditor harassment (i.e. calling you at home and work), utility shut offs, wage garnishments or other creditor actions. I usually don't recommend a Chapter 7 Bankruptcy for any individual unless there is at least $5000 in debt to wipe out or discharge, making the filing worthwhile. However, I have filed Chapter 7 cases for individuals with less debt but were being garnished by one or more creditors and made only minimum wage therefore making it impossible to file a Chapter 13 repayment plan. I have also filed cases for people whose utilities were shut off and needed the Bankruptcy Court protection of the automatic stay to get turned back on.

Do I have to file Bankruptcy on all of my Credit Cards? What if I want to keep one? Yes, if you owe a balance, list the debt. The law requires you to list all of your creditors on your bankruptcy petition. I tell my clients that even if they owe the local video store $3.79 for an overdue video, to list it on your bankruptcy schedules. Many of my clients are worried that they cannot live without their Mastercard. Trust me, life is possible without credit cards. If you truly must have a credit card, there are options. If you have a credit card with a zero balance, it does not have to be listed and you may use it after you file bankruptcy. If you have a credit card with a low balance, you may wish to pay it off before filing your case. Some creditors, particularly Sears, offer to cut your current balance to $500, even if you owe them $10,000 or more, if you reaffirm (sign an agreement that says you promise to pay them despite the bankruptcy) with them. Many of my clients are reporting to me that they are receiving pre-approved credit card applications shortly after filing their Chapter 7 case. These are solicitations from credit card companies, even some of the same that were just discharged, enticing you to get back into the game. If used wisely and frugally (i.e. paying the balance in full each month), these may help you re-establish your credit. Remember though, in many cases, overspending and overuse of credit cards are what often lead to the bankruptcy in the first place. Be careful! Where does my Chapter 7 Bankruptcy case get filed? If you live in the Metro Detroit Area it will be filed in the US Bankruptcy Court for the Eastern District of Michigan, Southern Division located at 211 West Ford, Downtown Detroit. Remember, bankruptcy law is a federal law and is therefore assigned to the Federal District Courts. The Bankruptcy Courts are a subset of the Federal District Courts and hear all cases assigned to them. All cases filed in Wayne, Oakland, Macomb, Monroe, St. Clair and Washtenaw Counties must all be filed in the Detroit Bankruptcy Court. If you live in the Flint or Bay City area, your case may be filed in there own jurisdiction. What happens after my case is filed with the Bankruptcy Court in Detroit? After your case is filed, the Court clerk usually mails out the "Notice of Commencement of Chapter 7 Bankruptcy" to you, your attorney, the Trustee assigned to your case and most importantly, all of your creditors. This is why it is important to try your best to list all of your creditors in your bankruptcy. They need to have "Notice" that you filed. The Notice of Commencement contains information about you such as your name, address and social security number so that the creditors can enter the fact that you filed a bankruptcy in your system and end collection activities. The notice contains instructions and explanations regarding the automatic stay and penalties for violating the stay (i.e. trying to collect a debt from you). The notice also tells you when and where your Meeting of Creditors will take place. This is your Court date and you must attend it otherwise your case will be dismissed. I as your attorney am also required to attend your "meeting of creditors." This "meeting" is actually not much of a meeting at all. You

(and your spouse if this is a joint filing) must attend. I will be there because I include this in your fee, and the Interim Trustee will be there. The trustee is an attorney who is appointed to ask you questions about your case, which you will be required to answer under oath. The trustee then reports to the bankruptcy judge as to whether he recommends a discharge. All this may sound scary, but it is actually a brief and routine procedure. Most people are amazed at how easy it is. You will learn more of this later in the case. Naturally, your creditors may attend the meeting, but they rarely do. Once the meeting of creditors is concluded, the trustee will make his report to the court and will usually recommend a discharge. After the trustee makes his recommendation, the court will enter a "discharge" within about three months. The reason you will not be granted a discharge immediately, is that the creditors are given some time to object to your discharge (approximately 60 days after your .341 meeting of creditors unless an extension is granted), or to make application to the Court why their particular debt should not be discharged. See the "Required Documents" link for a list of what you need to bring to this Court hearing with you. What about my credit report, how will it look after filing Chapter 7 Bankruptcy? My friends tell me that I won't get credit for seven years after I file, is this true? I get this one all the time. First of all, understand that there is no law that says a future creditor or some other lender cannot give you credit after you file bankruptcy. In fact, these days with well over 1 million personal bankruptcies being filed every year, there is an entire credit industry that has evolved that solicits actively to individuals and couples who have recently filed a case. My clients call me all the time just a few months after their bankruptcy and want to know what is going on, why are they getting all of these preapproved credit card applications in the mail and how come all these finance companies want to sell them a car? Well the short answer is that these potential creditors want to be first in line to be your new credit cards after your fresh start. They no that most people will only file one bankruptcy in their life. That if the original bankruptcy was filed just because of bad financial planning (i.e. not loss of job, disability, divorce etc.) that the debtor probably has learned something from the experience and will be more careful with the way they use credit in the future. Finally, the creditor knows that you may not file another Chapter7 bankruptcy seeking the discharge of new debt for a period of six years. There is no question that a bankruptcy will hurt your ability to get credit in the future. But by the time a person comes into my office, their credit is already very bad. The benefits of the bankruptcy discharge will greatly outweigh any negative impact on the credit report in the vast majority of cases that are filed. The fact that you filed a chapter 7 will appear on your credit record for ten years. Generally, the best (and probably the only) way to get good credit is to pay your bills on such terms as you originally agreed when they become due, i.e., pay at least the minimum payment. Bankruptcy, as you probably have figured out already does not pay your bills, it only releases you from personal liability or responsibility on them. In effect, the debt will still exist, but your creditors will be legally stopped from collecting anything from you, forever. Even if a year later you will $100 million in the lottery. In other words, and for all intents and purposes, the indebtedness is canceled. While the bankruptcy will be listed on your credit record, you may be fortunate enough to find a creditor willing to

overlook this, but then again, you may not; this question is entirely left up to the creditor. No one can be forced to give you credit and you should not contract for credit while your bankruptcy case is pending. Be careful with new credit card or other credit offers, remember, credit card are what got you here in the first place. If you pay your post-bankruptcy case bills after the case is closed, you may find some creditors that are willing to give you credit -- possibly as soon as a year or two after you get your discharge. When you use credit again, it is in your best interests to use it with great restraint. In order to reduce the risk that you will have to ask the court for relief again, it is better to pay cash until you are very certain that circumstances are substantially changed from the way they were when you filed. Since you cannot ask the court for a Chapter 7 discharge more than once every six years (Chapter 13 may still be available though), you may put yourself and your family into jeopardy unintentionally and unnecessarily. My incorporated business is ceasing operations, should it file for chapter 7 bankruptcy? It depends. A corporation is entitled to no exemptions and receives no discharge. Good reasons to file a corporate chapter 7 would include: to stop a creditor from executing on valuable assets that could otherwise be utilized to pay debts for which the principals are liable (e.g. trust fund taxes or other personally guaranteed debts); to recover preference payments that could be used to pay debts for which the principals are liable; to insulate the principals from allegations that the liquidation of the corporation was handled improperly; the principals would rather turnover liquidation of the corporation to a trustee instead of handling it themselves. Good reasons for the corporation to not file for bankruptcy might include the time and expense of the bankruptcy and the scrutiny of past dealings between the corporate insiders and the corporation. There is no requirement that a insolvent corporation file for bankruptcy and state law dissolutions or simply "shutting the doors" are common alternatives.

Why would a debtor choose chapter 13 over chapter 7? The primary reasons include: the debtor owns nonexempt property that the debtor would like to retain but could not in chapter 7; a debtor is behind on car or house payments and needs to cure the arrearages over time; a debtor seeks to "strip-down" the amount of a secured debt to the value of the collateral (not available as to first mortgages on a debtor's residence); the debtor has received a prior bankruptcy discharge within 6 years; the debtor has debts that are not dischargeable in chapter 7 (e.g. certain taxes, fraud, defalcation of fiduciary duty, or willful and malicious injury); a debtor is seeking to protect a co-debtor; or a debtor likely has need of bankruptcy relief in the future. In some cases, a debtor with a high income and an ability to repay debts over a period of time, may be not be permitted a discharge in chapter 7 and therefore chapter 13 will be his only option.

How much do creditors receive in a chapter 13 plan? The debtor must pay all his available disposable (after reasonable monthly expenses) income to the plan for at least 36 months. The creditors must receive at least as much money in chapter 13 as they would have received in chapter 7 (also known as the liquidation test). Secured creditors such as mortgage holders are generally paid in full or caught current with the chapter 13 payments. Priority claims, which include attorney fees, certain taxes and back alimony and child support, must be paid in full under the plan. Different plans will pay the unsecured creditors anywhere between 10% to 100% of their claim depending on the liquidation test and the debtor's ability to pay. In the Eastern District of Michigan, a plan typically will pay the general unsecured creditors no less than 10 cents on the dollar. The plan must be feasible in light of income and expenses and must be proposed in good faith.

Are there limits to what a chapter 13 debtor can claim as a reasonable expense? Yes. In the Detroit district, debtors must generally cease 401(k) contributions as well as 401(k) loan repayments while in chapter 13. Expenses such as high car payments, jetski payments, motorcycle payments, private school tuition, assistance to adult children may not be allowed as these may be considered luxury items by the Trustee and objected to unless you are offering 100% to your unsecured (credit card, medical bills, etc.) over 36 months. Charitable contributions (including tithes and offerings) will generally be allowed if the debtor in fact makes these contributions (the Trustee may wish to see proof such as a letter from your Church, Temple or whatever charity you contribute to).

Is it necessary to go to court when filing for bankruptcy? Not typically, but all debtors must appear at the meeting of creditors (also known as a "341 meeting") 20-40 days after their petition is filed. While this is not a Bankruptcy Court hearing (i.e. the Judge will not be there) it is a required proceeding pursuant to the Bankruptcy Code-you must attend. Failure to attend will result in the Trustee filing a motion to dismiss your case. At the meeting, a trustee will ask the debtor about their petition, schedules and Statement of Financial Affairs. Such meetings are often routine and short. If the debtor has retained an attorney, then the attorney will appear with the debtor as legal counsel. Creditors may ask the debtor questions at the meeting, but usually do not attend. The creditors meetings in Detroit are held at 211 West Fort Street, Detroit MI 48226 in the basement, Suite B100. The building is on the corner of Fort Street and Washington, Downtown.

What if a debtor has filed for bankruptcy previously?

A debtor may not be eligible to file a petition if, within the preceding 180 days, he voluntarily dismissed a bankruptcy case after a Relief from Stay motion was filed or if the debtor failed to appear in a bankruptcy case. If a chapter 13 case was dismissed for failure to make the monthly payments then it can generally be re-filed without delay but it is generally helpful to show a positive change of circumstances that has occurred since the previous dismissal. No chapter 7 discharge will be granted where a prior discharge was granted within the past 6 years.

Do spouses have to file for bankruptcy together? No, spouses may file jointly or individually. It is quite common for just one spouse to file in order to preserve the credit standing of the non-filing spouse, especially if the other spouse has OK credit.

What effect does bankruptcy have on a co-debtor or co-signer? A non-filing co-debtor remains liable just as before (i.e. they are not filing bankruptcy). However, a filing debtor may be able to protect the non-filing co-debtor by filing a chapter 13. In any event, a notation that the account was included in a bankruptcy will likely appear on the co-debtors credit report which may damage their credit standing. That is simply the risk one takes when signing a contract with a co-signer.

Are there debts that bankruptcy will not dispose of? Yes. In chapter 13, some non-dischargeable debts include: (1) long-term debt which by the terms of the underlying contract, is payable at least in part after the last payment is due under the chapter 13 plan; (2) money owed for alimony, maintenance or support; (3) most student loans; (4) debt for death or personal injury arising from driving under the influence; (5) criminal fines and restitution. In chapter 7, non-dischargeable debts include: (1) money owed for child support or alimony; (2) certain taxes; (3) some debts not listed on certain bankruptcy petitions; (4) debts incurred through fraud; (5) debts resulting from "willful and malicious" harm; (6) defalcation of fiduciary duty; (7) student loans unless the court decides that payment would be an undue hardship; (8) mortgages and certain liens (such as on a car) which are not paid in the bankruptcy case; (9) government fines, forfeitures, and restitution; (10) debt arising from driving under the influence; (11) debt incurred to pay a nondischargeable federal tax. What if a debtor accidentally forget to schedule a creditor? In a "no-asset" chapter 7 where the creditor alleges no fraud, willful or malicious injury, or defalcation of fiduciary duty, the debt is still discharged.

Can a chapter 7 debtor own anything after bankruptcy? Yes. A chapter 7 debtor may keep exempt property (property protected from creditors) and property obtained after the bankruptcy is filed. However, if a debtor receives an inheritance, a property settlement, or life insurance benefits within 180 days after filing, that money or property may have to be paid to the creditors (through the trustee) if the property or money is not exempt. You should immediately notify your attorney and the Chapter 7 Trustee should this happen to you. Do not dispose of any property you acquire via any of the above within the 6 months after filing.

What is equity? Equity is determined by deducting the amount of a secured creditor's lien from the fair market value of the asset. (e.g. a car that is valued at $10,000 with a $9,000 lien against it, has $1,000 in equity).

What if all of the debtor's assets are exempt? This is a common occurrence and is referred to as a "no-asset" case. This means that the Trustee has not found any property that can be sold to raise cash for the benefit of your creditors. Almost all Chapter 7 cases are no-asset cases. I will do a thorough analysis prior to filing and let you know the likelihood if your case is an asset case.

What if a debtor wants to retain non-exempt assets? A chapter 13 should be considered. However, it should be noted that even though some assets may exceed the allowable exemption level, the chapter 7 trustee may elect to abandon the asset back to the debtor if the liquidation of the asset would yield an insignificant amount of money. Also, chapter 7 debtors may be afforded the opportunity to compensate the bankruptcy estate (pay the Trustee the value with the Bankruptcy Courts approval) for the un-exempt portion of an asset in order to avoid liquidation.

Should a debtor sell non-exempt assets in order to purchase exempt assets prior to a bankruptcy? This is a form of exemption planning. Exemption planning is not prohibited per se, but problems can arise. A debtor would be advised to consult an attorney prior to proceeding.

Should a debtor seek to protect non-exempt property by transferring it to friends or relations prior to bankruptcy? No. The transfer could be deemed a fraudulent conveyance or a preference. The trustee has the power to avoid pre-petition fraudulent conveyances. Furthermore, such transfers may result in a denial of the debtor's discharge if bad faith or concealment is proven.

What if a lien has been filed against a debtor's assets? A debtor may avoid the fixing of a lien which impairs an exemption if the lien is: 1. a judicial lien (except arising from alimony or child support); or 2. a non-possessory, nonpurchase money security interest in: (a) household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments or jewelry held primarily for the personal, family, or house hold use of the debtor or dependent of the debtor; (b) implements, professional books or tools of the trade of the debtor or of the trade of a dependent of the debtor; or (c) professionally prescribed health aids for the debtor or a dependent of the debtor.

What happens to secured property in a chapter 7 case? A debtor must file a statement of his intention to either retain or surrender the property within 30 days of the date of filing. Should the debtor choose to retain the property than he must either (1) reaffirm the debt with the creditor; (2) redeem the property by paying the creditor the wholesale value of the collateral (only available with tangible personal property); or (3) keep the contractual payments current. Because it is not usually in the debtor's best interest to reaffirm a debt and because a creditor is not obligated to reaffirm, it is preferable for a debtor to have payments current on secured debts when filing for bankruptcy.

Will bankruptcy stop calls from bill collectors, repossessions, foreclosures, evictions, lawsuits, judgments, or wage attachments? Yes. Under the "automatic stay", all collection efforts must immediately stop. The creditors are usually notified within two weeks of filing although they can be notified quicker if necessary.

Can a bankruptcy be filed simply to delay a creditor? Though some debtors do this, it is an improper purpose for filing a petition. A Bankruptcy petition should only be filed in good faith, not simply to frustrate a creditor.

How much does it cost to file for bankruptcy? At this writing, the court filing fees for chapter 7 are $200. The court filing fees for chapter 13 are $185. My attorney fee ranges from is $400-$800 for a typical chapter 7case and at lease one-half must be paid prior to the case being filed. For a chapter 13, I charge a total of $1,400 of which I typically require $300 in addition to the court filing fee to be paid up front. The remaining fee (typically $1,100) will be paid through the plan (out of the money that the debtor pays to the chapter 13 trustee). I offer free consultations by phone or personally in my office.

Who interacts with the creditors and bill collectors after the bankruptcy petition is filed? Me, your attorney and my staff. You should direct all creditor calls to my office. Use my local phone number as the toll free number only works within Michigan.

How long will a bankruptcy appear on a credit report? A chapter 7 bankruptcy will appear on a credit record 10 years. A chapter 13 bankruptcy will appear on a credit report for 7-10 years. Other negative items on a credit record will remain for 7 years.

After bankruptcy, can a debtor obtain credit? Yes, although the decision will vary depending on the particular lender. Some lenders may consider a more balanced debt/income ratio and an inability to obtain another chapter 7 discharge for the next 6 years to be plus factors in evaluating a prospective borrower. Other lenders will consider a bankruptcy a permanent indicator of poor judgment. Other factors lenders might consider include: stability of employment and/or residence; time elapsed since bankruptcy; and level of income. In general, if a debtor otherwise qualifies, two years after a discharge, Fannie Mae and Freddie Mac will not hold the bankruptcy against the debtor when attempting to obtain a low interest mortgage. Note that while in chapter 13 in the Eastern District of Michigan, a debtor must obtain permission before making purchases or obtaining loans which exceed $1,000.00.

How can credit be reestablished following bankruptcy? Common methods are to obtain a secured credit card and/or to obtain credit with the help of a cosigner.

How can a credit report be obtained? The three major credit reporting agencies are Equifax (800-685-1111), TransUnion (800-916-8800), and Experian (formerly TRW) (800-682-7654). I can obtain a credit report for a prospective clients who comes for a consultation and has a need for it. Usually there is a need for a credit report where the debtor is may have lost track of some debts, creditors, judgments, etc.

What are some alternatives to bankruptcy? The alternatives include: doing nothing, negotiating with creditors for extensions or compromises, or going through credit counseling. Doing nothing may be appropriate as to debts that are small and/or where the debtor is elderly and "judgment proof" (no foreseeable consequence for unpaid debt). Creditors are also willing to settle on debts for a percentage of the balance due (45-75% is common) once they become 90-120 days delinquent. One problem with settling is that the entire amount may need to be paid at once in one lump sum or in a brief span of time. There may also be tax consequences as the forgiven debt is treated as income by the IRS (unless the taxpayer is insolvent). Credit counselors are funded by creditors and will set up a program to pay back almost everything to the debtor's unsecured creditors. Often times a credit counselor is able negotiate extensions, reduced interest rates, and forgiveness of late fees. The debtor's credit report may reflect that he is in credit counseling which may hinder his ability to obtain credit. All other things being equal, it would be better to go to an established local credit counselor and not one over the internet or telephone. As with bankruptcy, the alternatives have positives and negatives which should be considered in light of individual circumstances.

Will a debtor's family, friends, or employer find out about the bankruptcy filing? Although the bankruptcy petition is a public record that is accessible from the Internet, it is unlikely that a person would find out unless that person is also a creditor. Current employers and government agencies cannot legally discriminate against a debtor because of a bankruptcy filing. Chapter 13 payments are commonly made through payroll deduction so the employer in that instance will learn of the filing.

How should a debtor prepare for bankruptcy? A consultation with an attorney may be quite helpful. In any event a debtor should probably: withdraw funds from any bank to whom he owes money to avoid a set-off; stop using credit cards, pay certain debts (e.g. utility bills, house payment, car payment, child support) and not pay other debts (e.g. credit cards and other dischargeable debt).

Does a debtor have to list all his creditors and assets on the bankruptcy petition? Yes. The failure to do so may result in a dismissal, a denial of discharge or perhaps even being charged with a bankruptcy crime. A debtor is not allowed to file against only certain creditors. Even creditors who are family members or friends must be listed.

May debts owed to friends and family members be repaid? Yes, a debtor may repay any or all of their debts after bankruptcy, but they are not legally obligated to do so unless the debtor has signed a valid reaffirmation agreement. I still have room on my credit card, should I "Max it out" before I file to take full advantage of the Bankruptcy discharge? Should I take out some cash advances before I file? This is not recommended before filing bankruptcy. The Bankruptcy Code does not allow for a discharge of every debt. Certain types of debts and certain conduct of the debtor will prevent a discharge of the debtor or a discharge of a particular debt. Section 523 of the Bankruptcy Code explains what debts cannot be discharged under chapter 7 (and 13 in some cases). In particular, look at section 523(C): (C) for purposes of subparagraph (A) of this paragraph, consumer debts owed to a single creditor and aggregating more than $1,000 for ''luxury goods or services'' incurred by an individual debtor on or within 60 days before the order for relief under this title, or cash advances aggregating more than $1,000 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 60 days before the order for relief under this title, are presumed to be non-dischargeable; ''luxury goods or services'' do not include goods or services reasonably acquired for the support or maintenance of the debtor or a dependent of the debtor; an extension of consumer credit under an open end credit plan is to be defined for purposes of this subparagraph as it is defined in the Consumer Credit Protection Act; This means that if you take large cash advances within 60 days before you file, these may not be discharged. You may be stuck with the debt after the court cancels your debts. Furthermore, if it can be shown that you had no intent or present ability to pay the debt (cash advances or your "running up" your credit card; i.e. buying a whole lot of stuff before you file knowing that there would be no way to pay), then the court could consider it a fraud and disallow the discharge of that debt even though you are outside the 60 days. Be careful. Filing bankruptcy is not like winning the jackpot. Bankruptcy is meant for honest debtors who honestly incurred debt. It is not meant for people wanting to make a quick killing in the consumer market or even for someone who really needs the money but has no way to repay it. What is the Bankruptcy Discharge and how will the discharge affect me?

If no objections are filed, you will receive a discharge in bankruptcy. The discharge "cancels" or "wipes out" certain debts that you had at the time the bankruptcy was filed. A bankruptcy discharge also has the following effects:
y y

It voids (cancels) any judgment determining personal liability on a debt; and It prohibits creditors from taking any action to collect a debt as a personal liability of yours.

However, if a debt is secured by a lien on any property belonging to you (e.g., a home mortgage or lien on a title to a vehicle), the discharge does not prevent the creditor from repossessing that property. Generally speaking, you must pay a secured debt according to its terms to avoid repossession. Also, while a discharge relieves you of responsibility, it does not relieve anyone else who may be responsible with you on that debt, i.e., a cosigner or co maker. Therefore, if your parent, friend, or relative cosigned on the loan papers, guess who that creditor will go after? Right, your cosigner may be sued by the creditor, and that creditor does not even have to wait until the case is over. This can be an embarrassing situation for both parties. In a Chapter 13 case, your cosigner may be protected. You will not be required to appear in court to get your discharge order. If the court receives no objections to your discharge, you can expect to receive an order in the mail in approximately three months after your creditor's meeting. When you receive the discharge order, you should put it in a safe place with your other valuable and important papers because you may have to show it to creditors later. Please don't call the Court clerk, the Trustee or my office trying to speed up the discharge process. Wait for the court to mail it. Are all my debts discharged by the court? Most will be, however, there are exceptions. The next sections list these:
y

Only debts owed from the period before the bankruptcy was filed will be discharged. This bankruptcy discharge will not discharge debts that you became obligated to pay during the bankruptcy. Your discharge will only cover your personal obligation to pay debts. It will not cover cosigners on your debts and it will have no effect on most security interests, like home mortgages and encumbrances on motor vehicles.

Are there some debts that are never discharged? Unfortunately, the answer is yes. The Bankruptcy Code specifies some debts that are not discharged in your Bankruptcy. The list includes:
y

Most income taxes (special rules apply)

y y

Student loans, unless you file a complaint in bankruptcy court claiming and "undue hardship," i.e. very unusual and compelling circumstances (i.e. so disabled you will never work again). Governmental fines and costs (parking tickets, traffic tickets, Court restitution). Debts arising from a judgment against you as a result of your operation of a motor vehicle while you were intoxicated causing death or personal injury to another. Consumer debts owed to a single creditor in an amount in excess of $1,000 for luxury goods or services within 60 days of the date you file, or for cash advances on your credit line aggregating more than $1,000 within 60 days of your filing date. If a creditor files a complaint and proves that your debt to them arises from fraud, breach of fiduciary duty, larceny, embezzlement, defalcation or a material lie on an application for credit, a drunk driving accident restitution for damage you caused, or for willful injuries you caused to another. Alimony, maintenance and support to a spouse, former spouse or a child.

What about property with liens on it? Is that debt also discharged? Yes, but the lien remains; and it is still subject to seizure once the case is finished (see above). However, the following may be of interest to you:
y

Certain liens (judgments, levies, non-purchase-money interests in household goods) can be eliminated entirely by asking the court to do so. There is an additional fee for this service. If you are interested in this service, let me know and I will quote such a fee. Other liens, like mortgages, motor vehicle encumbrances, and purchase money security in other goods cannot be eliminated. If you want to keep the mortgaged house, encumbered vehicle, or secured item, you may have to enter into an agreement to pay a part of the debt (reaffirmation) or the value of secured consumer debts (redemption).Usually you are better off just continuing to pay for the secured item rather than signing a reaffirmation agreement. If you think any of these agreements or motions should be filed in your case, or if you want additional information, contact me. A creditor cannot be forced to reaffirm an obligation, but they may be forced into a redemption (where you pay the fair-market value of the security in one lump sum). Redemptions are rare because most people don't have the money. Remember, if you want to reaffirm a debt, avoid a lien, or redeem property, you must do so before the discharge order is signed. I won't always sign a reaffirmation agreement unless I (personally) feel it is in your best interest.

Note: You can pay anybody you want after your discharge, however, few debtors do. It is important that you know the significance of your discharge order. If a debt is discharged, that creditor cannot force you to pay that particular debt. This means that the creditors cannot legally file an action against you (for that debt), continue an action

they had filed before the bankruptcy, send you collection letters or harass you in any other way. Do the automatic stay provisions of the Bankruptcy Code protect money I have in the bank, or is it seized by the court? Money in the bank may or may not be taken by the trustee, depending on the bankruptcy exemptions claimed. Your exemptions may be either federal or state. Ordinarily, the trustee is the only party that can seize your account once you have filed your bankruptcy case with the court; however, there is one important exception. If you have an account in a bank, credit union, savings and loan or other financial institution to which you also owe money, that institution may refuse to release account funds to you once you have filed bankruptcy. This right of set-off is most commonly used by Credit Unions where you may be a member. This is a very important, and often overlooked aspect that must be considered prior to filing. By the way, there is nothing that prevents a debtor from simply closing an account before he or she files a bankruptcy case. Are there any circumstances where I could make myself liable on a debt after my discharge? Yes. Such circumstances occur when the debtor signs a reaffirmation agreement. Reaffirmation agreements are legally binding contracts between the debtor and a creditor wherein the debtor agrees to be liable once again to the creditor after the entry of the discharge order. Such agreements must always be approved by the court. This approval is necessary to discourage unscrupulous creditors from coercing a debtor to become liable to the creditor after the debtor has been discharged (which legally cancels indebtedness). The court usually discourages reaffirmation agreements, except for good cause. After all, these are generally the same debts that got the debtor into trouble in the first place. Reaffirmation agreements:
y y y y

must be voluntary; must not place too heavy a burden on you or your family; must be in your best interests; and can be canceled anytime before the Court issues your discharge or within 60 days after the agreement is filed with the Court, whichever gives you the most time.

If you are an individual and not represented by an attorney, the Court must hold a hearing to decide whether to approve the agreement. The agreement will not be legally binding until the Court approves it. If you reaffirm a debt, which the Court approves and fail to pay it, it is the same as if you never filed bankruptcy respecting that debt (your other debts are still discharged). This means the creditor can sue you and take your property! This is not a good position to be in! What is a trustee, and who will be appointed?

After a bankruptcy case is filed, the court appoints a trustee. The trustee has many functions, but primarily, he is appointed to examine your case, as well as the debtor, orally, to determine whether there would be any assets available for creditors. Most people can take the necessary exemptions to protect their property from their creditors and the trustee, who, after his examination makes a determination as to whether he will take physical possession of, or abandon (return legal control) to the debtor. In the vast majority of cases, the trustee will abandon all property to the debtor. Rarely will the trustee take actual possession of property in a consumer case. However, if a debtor owns a valuable piece of non-exempt property, the trustee will take the item and expose it to public sale for the benefit of creditor. Can I just list and discharge the debts I want and keep the "good debts." No. All debts must be listed. Even debts to people you like, or feel a special obligation. After the case is discharged, nothing prevents you from paying anyone at all. If you fail to list a creditor, you chances of a discharge are decreased and they are eliminated for the debt you did not list. I need a credit card. Can I keep one? Possibly, if you do not owe any money to the creditor issuing the credit card, however, the trustee may demand that you cut up all your credit cards. Once you have made the decision to file bankruptcy, you should not charge anything on any credit cards that you will seek to discharge in your bankruptcy. Once I file a Chapter 7, what if I need to do it again? Is there a limit to my refiling? Once you receive your discharge in a chapter 7 case, you cannot file another bankruptcy and get another discharge, in a chapter 7 case unless six years have passed between the date this bankruptcy was filed and the date on which the new bankruptcy (chapter 7) is filed. This does not mean you cannot file for relief under Chapter 13 of the Bankruptcy Code, also known as a "Wage Earner Plan." You may indeed obtain substantial assistance through a Wage Earner Plan under Chapter 13. This information sheet is intended as a summary of certain points only. The terms used in this information sheet are intended to be simple so that they can be understood, the law is much more detailed. This information therefore is not "the law" and is designed only to help you understand basic bankruptcy concepts. Each bankruptcy is unique. Your case may have special facts making further discussion necessary. Feel free to raise any issue if you feel uneasy or unsure about it. How can I hire you as my attorney to file a Chapter 7? Can I plan my bankruptcy?

Of course! Good planning is why you are reading my website and hopefully will hire a good attorney. Pre-bankruptcy exemption planning (converting non-exempt assets such as cash to exempt assets such as a car )is allowed so long as it is in good faith and full disclosure is made to the Court and Trustee via your bankruptcy petition, statement of financial affairs and schedules. Which bankruptcy is right for me: Chapter 13 or Chapter 7? Many people file both a Chapter 7 to get rid of unsecured debts and then a Chapter 13 to stop a foreclosure or repossession. A Chapter 13 is like a bill consolidation loan, and you normally file it to keep property. A Chapter 7 is used to completely wipe out unsecured debts and to get rid of secured debts for property you don't want to keep. Both will stop garnishments and Creditor harassment. Over 50% of all Chapter 13 cases fail because they become unaffordable. By filing a Chapter 7 first, you get rid of the unsecured debts and make your Chapter 13 repayment less. Your Attorney may want to file a Chapter 13 because he will earn more than he would in a Chapter 7, but you will usually profit far more from filing a Chapter 7. Usually, the only times you will want to file a Chapter 13 are 1) when you have already filed a Chapter 7 and can't file another one or 2) if you have so much property and equity that a Chapter 13 is necessary to keep that property, or 3) you are facing an imminent home foreclosure or automobile repossession. You may also have to file a Chapter 13 if you have so much income (after you pay your normal monthly living expenses) that you can repay your debts within 5 years. A Chapter 13 may also be used for special purposes, such as to discharge special tax debts, repay child support, repay student loans, or protect a co-signer. The fortunate thing about virtually all Chapter 7 cases is that the Debtor's assets are normally exempt, so there are rarely any assets to liquidate (sell and convert to cash for benefit of creditors). Why file a Chapter 7? If you have substantial unsecured debts you may want to file a Chapter 7. You may also want to file a Chapter 7 if you want to surrender property and not owe for it. You can usually keep all your property in a Chapter 7, because you won't have enough equity in any property to exceed the exemptions allowed. Why file a Chapter 13? You may want to file a Chapter 13 if you have secured debts and are threatened with foreclosure or repossession, if you filed a Chapter 7 less than 6 years ago, if you wish to protect your cosigner, or if you have debts that are not dischargeable in a Chapter 7 but are payable in a Chapter 13. Can I convert from a Chapter 13 to a 7 or from a 7 to a 13?

Few people convert from a 7 to a 13. You have more than a 90% chance that you will have to convert from a 13 to a 7. Over 5 years, you are very likely to miss a payment and have the Chapter 13 dismissed (or have to re-file). The vast majority of Chapter 13 cases are never finished and are converted into Chapter 7 cases or dismissed outright by yourself the debtor, the Trustee or one of the creditors having filed a motion to dismiss. If you are close to completing the plan, you may be granted a hardship discharge. What is a Chapter 20? What is a Chapter 26? Some people file a Chapter 7 to wipe out unsecured debts and then file a Chapter 13 to keep their property. This is jokingly referred to as a "Chapter 20". Filing a "Chapter 20" can be the intelligent and affordable way to file a Chapter 13. Filing a Chapter 7 and then a Chapter 13 to obtain the benefits of both is very effective. You must, however show that there has been a change in circumstances between the filing of your Chapter 7 and the subsequent Chapter 13 and you must be filing in good faith (i.e. without trying to "play the system"). A "Chapter 26" refers to filing back-to-back Chapter 13 cases. You would do this to pay debts that can't be paid in 5 years by just one Chapter 13. In a sense, you are "extending" your repayment time by filing two Chapter 13s. The Bankruptcy Court will frown on multiple bankruptcies filed repeatedly without making a viable effort at repayment. If a Chapter 7 or Chapter 13 alone won't work for you, a 20 or 26 normally will. How long will bankruptcy take? It will take about 3 to 4 months for a Chapter 7 to be final. (You will get a letter within 10 days of filing, telling you the time and date of the 341 hearing. This hearing will be held about 4 to 6 weeks after you file.) A Chapter 13 will take as long as the repayment plan takes the normal plan is between 3 to 5 years. By statute (the Bankruptcy Code), a Chapter 13 plan may not exceed 60 months-5 years. What are the most common mistakes I can make when filing? Not showing up for your hearing and not listing all of your assets and liabilities or debts. Fail to show up at the hearing, and your case is dismissed. The best policy is to list all your debts and assets. Always list every debt, even if you think it is nondischargeable, it may be discharged anyway. Even include last month's utilities in your debts. How do I qualify for bankruptcy? Can I not be approved? You qualify for bankruptcy if either your reasonable monthly income exceeds your income or your liabilities exceed your assets. If you don't qualify, I will tell you when I

consult with you or when I prepare your bankruptcy. It is very rare not to qualify. You basically have to be a resident of the Eastern District of Michigan (Detroit area) for at least 6 months, reside in the state you file in, and not have filed within certain time periods (i.e., you can't file two Chapter 7s within 6 years of each other). What if the Court does not approve my Chapter 13 or Chapter 7? If there is anything wrong with your Chapter 13 or Chapter 7 bankruptcy it will usually be changed and amended. Of course, it is less costly and time-consuming to do it right the first time. If you earn so much money that you can afford a Chapter 13, you will be forced to change it from a Chapter 7 to a Chapter 13. How often can I file? You can file a Chapter 7 six years after your last discharge from a Chapter 7. The time is measured from the time of discharge of your first case to the time of filing of your second case. You can file Chapter 13s as often as needed, but you must be finished with any prior case. You can only have one bankruptcy going on at a time. If I file does it mean my old bad debts are erased from my credit report? NO! What is reported is that you had a debt and that a bankruptcy was filed. Bankruptcy does not give you a good credit record or "repair" your credit record automatically. You repair your credit by paying your debts on time after the bankruptcy. Many credit card companies will send you pre-approved credit card applications and car financing offers shortly after getting your discharge. Beware of these offers, use the credit carefully and you may be re-establishing yourself. Can I file without an Attorney? Yes. You can file a bankruptcy yourself, and this is called "filing pro se". You can also do dentistry on yourself, but we wouldn't recommend it. Doing your own case is a very bad idea. This website alone won't give you the knowledge you need to do it, but it will help you educate yourself so you can protect yourself from bad legal advice or an incompetent Attorney. As an example, if you file a reaffirmation, it usually must be approved in a hearing by the Judge, and that will mean extra hearings and time for you. Considering the time and risk involved, we highly recommend you use an Attorney. You may lose far more in Court than what the Attorney would have cost plus there may be extra time and effort on your part. Most people who initially file their case on their own eventually need to hire an attorney to clean up their mess. I often charge more to clean-up a poorly filed do-ityourself bankruptcy than a new case since it is less time consuming for me to do it right the first time than clean-up a mess. What about a Bankruptcy Mill?

Filing a bankruptcy through a Bankruptcy Mill or paralegal may be even worse than doing it yourself. Many people have lost thousands of dollars with these businesses through intentional scams or just plain bad work. Beware of persons coming to your house if it is in foreclosure. These people are scam artists and like vultures circling over an animal dying in the desert, are trying to capitalize on your present desperate situation. Non-Attorney bankruptcy petition preparers are barred by law from providing you with any legal advice, however they often violate this law, often to the detriment of the person filing. In enacting legislation governing bankruptcy petition preparers, Congress stated: "These preparers lack the necessary legal training and ethics regulation to provide [legal advice and legal services] in an adequate and appropriate manner. These services may take unfair advantage of persons who are ignorant of their rights both inside and outside the bankruptcy system." The bankruptcy petition preparer's role is limited by law solely to typing. Unlike an Attorney, a bankruptcy petition preparer can not help you understand the law, advise you on how to answer questions, assist you in planning, or assist you in Court. They may be useful, but you must be prepared to do all the real work yourself. Federal law requires that bankruptcy petition preparers sign any documents they prepare; print on the document their name, address, and social security number; and furnish you with a copy of the document. A bankruptcy petition preparer may not sign any document on your behalf, may not use the word "legal" or any similar term in any advertisement, and may not receive any payment from you for Court fees. The bankruptcy petition preparer is also required to disclose to the Court the amount of any fee you pay. Beware of any bankruptcy petition preparer who does not comply with these requirements. What paperwork do I need to bring to my Attorney? Bring the names, amounts, and proper addresses of all of your Creditors. Bring recent pay-stubs, tax returns, car titles, deed to your house and other real property, appraisal or property tax bill for your house and your most recent mortgage balance statement. You may estimate the amounts of any bills you owe, you don't need to call the creditor asking for the specific amount you owe. It also helps to have the account numbers, but we must at least have perfect addresses to give notice to the Creditors. I have a computer database of addresses to common creditors such as credit card companies, local hospitals, collection agencies and attorneys and the local utility companies. Credit bureau reports normally don't have the addresses on them. If you have gotten a Credit bureau report before filing, bring this with you and I will get the addresses for you. How can I get a copy of my credit report? You can get a free credit report if you have been denied credit, are unemployed, are a victim of fraud. To get one free (if you qualify) or for a small fee (if you don't) without going through a "middle man" just contact any of the 3 major reporting services below. They will typically charge $9 to $10. If you have recently been denied credit, you will be able to get a free copy of your credit report. This website has a link to obtaining you

report from Experian (the one I recommend). You could also go directly to www.experian.com. 1. Experian (TRW) at 1 888 EXPERIAN (1 888 397 3742) allows you to charge your credit report to your Visa or MasterCard or debit card over the phone or on the internet. 2. Trans Union at 1-800-888-4213 or write to: Trans Union Corporation Consumer Disclosure Center, P.O. Box 390, Springfield, PA 19064-0390 3. Equifax at 1-800-685-1111 or write to: Equifax Information Service Center P.O. Box 740241 Atlanta, GA 30374-0241. For $9, you can get an immediate report online from Equifax at: http://equifax.com/resources/fcra_info_rights.html If you decide to write to any of these services, be sure to include your: name, address, phone number, previous addresses for the past two years, social security number, birth date, employer, signature and be sure to include your payment. (You'll have to call to get the payment amount.) Proof of identity such as a photo copy of your driver's license will also be required. For your convenience, there is a credit report request form in Section 20.14 of this manual. Can I file jointly with my spouse? Does my spouse have to file or sign if I want to file individually? Yes, you can file jointly. No, your spouse doesn't have to file but, if most of your debts are joint debts, he or she may want to. In some cases, where only one spouse has debts or one spouse has debts that are not dischargeable, it might be advisable to have only one spouse file. There is no need for a spouse to file if the debts are not in his or her name. If you are filing a Chapter 7, and the bills are also in your spouse's name, he or she generally should file to be protected. (Co-signers are protected in a 13, but are not in a Chapter 7.) There should be no additional charge for a spouse filing, but some firms do charge extra. The only extra work to do in a joint filing is adding an additional name and social security number to the petition. There is no reason we can think of for your spouse to file a separate petition it will only cost you a second Court filing fee and Attorney fee. Will it affect my spouse's credit? Is he/she responsible for my credit cards if he/she is an authorized user? No, filing will not affect your spouse's individual credit, but if he or she is a co-signer on any debt that is not paid that will affect him or her. The fact that you filed bankruptcy does not appear on a spouse's credit report unless he or she also files bankruptcy. Unless your wife has signed to be legally responsible, she is not responsible. However, many credit card companies will argue that she is responsible. They may even put a "no pay" on her credit report if the amount is unpaid; however, she may ask any reporting service to correct that. If she does so, the credit card company will have to

show that she signed for it. If they can't, it will be removed from her credit report file. In other words, the credit card collectors may try to collect from her by claiming she is liable, but she really is not. If they damage her credit record, it may be grounds for a lawsuit. Credit is normally granted based on a score from your past payment history, the amount of debt that you owe, the length of time you have been repaying present credit, if you have opened credit recently, and the types of credit accounts you have. Will my co-signers be protected? Co-signers are protected only in a Chapter 13 to the extent that the plan pays the full amount of the co-signed debt. If the plan pays the debt completely, the co-signer is protected, but it will be listed in his or her credit record as being paid late. The Creditor may ask the cosigner for any remaining portion of the debt if it not paid completely. In a Chapter 7, the co-signer will have some small protection regarding the collateral during the proceeding, but only because the Creditor can't go against the property of the estate. After a Chapter 7 is over, the Creditor will proceed against the co-signer personally. Can I file a personal bankruptcy and not have it affect my business? If you own your own business, the business is a part of your assets. If it is worth very much, it may be property of the Court. If your business is incorporated and files bankruptcy, it won't affect you because the business does not own you. Can Bankruptcy stop foreclosures, wage assignments, help me get my license back from an uninsured accident, stop evictions, a judgment, and remove a lien? Yes. What will happen to my bills? When you file a bankruptcy, a Court order goes into effect that keeps Creditors from legally collecting from you. When you are discharged (i.e., the bankruptcy is final), the Creditor "charges off" the debt and gets a tax deduction for the loss. The bill is not paid, and the debt shows up as a bankruptcy charge-off on your credit report. Some Creditors will attempt to get around the law and will continue attempts to collect after the bankruptcy is filed. They can be sued for this, but you need to prove they did it. One of the best methods is to record their call and then surprise them in Court with it when they deny ever making the call. Most Creditors that ignore the law will never send you letters or anything on paper after you file, but they may make phone calls hoping that you will pay anyway. What if I keep getting bills? You will continue to get some bills from bankrupted debts after you file. What happens is that the Bankruptcy Court sends out notices to the addresses that you give to them (that is why correct addresses are so important), but some Creditors never get these

notices and continue to bill you or maybe you listed the original creditor and that account has been sold or transferred to a collection agency or attorney. You should make copies of your original hearing notice (Notice of Commencement of Bankruptcy). If you get a bill or other dunning letter from a Creditor, send them a copy of the bill and the notice. Some Creditors will continue to send bills even if they receive notice. It may be that their computer can't stop sending out the bills, or they may simply be ignoring the stay hoping that you will pay anyway. If this becomes a problem, and you have proof that a Creditor is doing this on purpose, contact my office. Do I have to pay my bills during the Chapter 7 or 13? No. Don't pay any bill (except a home or car note you wish to keep and your post-filing utilities) until after you file a reaffirmation in a Chapter 7. Don't pay any payment in a Chapter 13 unless it is the regular monthly mortgage payment or car payment, and the 13 was filed to catch up the arrearage. A stay is a federal Court order to stop. If the item is secured, your overdue payments will continue to add up while you don't pay on the item. However, the Creditor can't proceed against the collateral until the stay is terminated. Often, the Creditor will file a motion to terminate the stay after the bankruptcy is filed. Bankruptcy stops your obligation to pay, but the Creditor may still have a lien and rights in the property. You often quit paying for items when you file so that you have time to decide if you want to reaffirm, redeem, or surrender. I have rarely ever had a bank refuse to reaffirm a debt, but you don't want to make payments if they aren't going to reaffirm with you and they only want the property. In some rare cases, with people who are never going to repay, the bank may refuse to reaffirm. In these cases, the bank only wants the property back. Also, some credit unions may refuse to reaffirm a car or mortgage unless you also reaffirm their credit cards or other loans or accounts you have with them. In cases like this, you may want to redeem (pay one lump sum) the property instead. That is why you don't want to make any more payments just before or after you file. You can take the time to negotiate your options. You don't have to be caught up on your payments to reaffirm, but some banks may request it and all of them want it. Who notifies the Creditors and bill collectors? After the bankruptcy petition is filed, the Court mails a notice to all the Creditors listed in the schedules. This usually takes 12 weeks. Do I have to go to Court? Not exactly, but you will have to attend a hearing presided over by the bankruptcy Trustee. This hearing is called the 341 Hearing (Meeting of Creditors). At this hearing, the Trustee (who is usually an Attorney) will ask questions of you, under oath, regarding the content of your bankruptcy papers, assets, debts, and other matters. It is very much like a deposition, not like a trial. If you can't attend (example: if you are in the service overseas), you may be allowed to have a family member or other next of kin testify on your behalf. The Trustee is not the judge. He is there to take any assets from you, if he

can, and to check the accuracy of your paperwork. The Trustee represents the creditors, not you. Where is my 341 hearing? Your 341 hearing is always at the Federal Court closest to you. In metro Detroit, your 341 hearing will be held in the basement at 211 West Fort Street, Downtown Detroit at the corner of Fort Street and Washington. Always give yourself ample time for parking. What do I wear to the hearing? The 341 meeting is a Federal Court proceeding so dress and act appropriately. Don't wear cut-offs or jeans with holes in them and don't wear sandals. Suits are not required, but dress properly for a hearing in Federal Court. Children are not supposed to be in the hearing room. Do not borrow and wear flashy jewelry. This is not the time to brag about how rich you are or how much you own. The Trustee is looking for assets to take from you. He is not your friend. He represents the persons that you owe. You must report in your bankruptcy papers everything that you own and it's real value, but don't brag about your income and possessions especially if you don't have any. Save that for when you want to impress the opposite sex in bars. Do you show up with me at the hearing? Of course! I will take care of you, and hold your hand through the process. I don't just file the paperwork. However, there is some work that you must do on your own and, if you read this manual thoroughly, you should be able to make the most of your bankruptcy without too much help from us. When should I file tax returns if I am going to file bankruptcy? If I file in December do I keep my refund? If you are considering filing a bankruptcy, you should file your tax return as early as possible. Get your refund before you file. If you do, you will generally keep your refund no matter how much it is. If you file in January, you may have to wait for some time after you get your refund back. You will be asked when you got your refund and how you spent it if you got a large refund. Be sure to list any anticipated tax refund in your bankruptcy papers so that I may exempt it if possible. What will happen to my house and car? Usually, you keep them. If your equity is less than or equal to your exemption, you keep the property. You are allowed to keep a certain amount of equity and property in bankruptcy. When I prepare your bankruptcy I will tell you if you are at risk of losing property. At the time of filing, all your property that is not exempt belongs to the Court. The idea is to exempt it all so that you keep it all.

Do I have to keep up the insurance on my vehicle? Will my rates be affected or will I be dropped? In Michigan, the law requires you to have PLPD or No-fault insurance at a minimum. PLPD stands for personal liability and property damage insurance. If you are financing or leasing a motor vehicle, your financing contract will more than likely require you to maintain full-coverage insurance. This protects the finance company (lien-holder) in case the vehicle is in an accident or stolen. If you fail to keep full coverage insurance on your vehicle and it lapses, the Creditor may petition the Court to get relief from the Bankruptcy stay to allow them to pick-up your vehicle-they will argue that you may get in an accident or it may be stolen and you could just walk away from it-with them taking the loss. Most insurance companies are happy to keep you if you simply pay on time and have few claims. We can generally say that if you pay your premiums on time and keep the same company, probably nothing will happen. However, this may be a good time to compare rates with other companies especially if you fear you may be dropped or raised because you listed your insurance company as a debt (or if you are bankrupting an accident claim). Can a Creditor be forced into a reaffirmation? No, a Creditor can't be forced into a reaffirmation. Can a Creditor be forced into redemption (a lump sum payment for fair-market value)? Yes, a Creditor can be forced into redemption. A reaffirmation is an agreement to pay the payments on the loan, and it is very rare for the Creditor to refuse a reaffirmation. If the bank does not agree to a reaffirmation, it will usually take a large loss from selling the vehicle at an auction, or the house in a foreclosure. It may even violate federal lending rules by refusing to reaffirm on a home mortgage. A bank may be able foreclose or repossess, regardless of whether you are in a bankruptcy. If they have started a foreclosure, the filing of the bankruptcy stops the foreclosure but, in a Chapter 7, the bank may file a motion with the Bankruptcy Court and ask to foreclose anyway. If a Chapter 13 offers a good repayment plan, the Court will not approve any foreclosure. If the bank is adamant that it wants the house or car back, it may do so in a Chapter 7 and take a loss. Normally, the bank will rethink their decision and give you one more chance through reaffirmation, but no one can force them to reaffirm. A redemption is an agreement to pay the bank what the security is worth in one lump sum. They cannot refuse the redemption. If you wish to redeem a car by paying a lump sum, contact my office. Can I choose which Creditors I repay? Yes, you can reaffirm to pay one Creditor, but not another, after the bankruptcy. By doing this, you can keep one car, but not another, or keep a credit card, but let a lemon auto go back. A Creditor will have to agree to the reaffirmation, but few refuse. Of course, we highly recommend you don't reaffirm unsecured debts.

Can I revoke my reaffirmation? Yes, but it must be revoked or rescinded within 60 days of the 341 hearing or before discharge, whichever comes first. It should be revoked in writing and sent by certified mail so you have proof. Or you could retain me to do it for you and I will file the rescission with the Bankruptcy Court and docket a copy in your official court file. I want my house or car to go back. Will I lose it immediately? No. You will normally have until the 341 hearing or a couple months thereafter to return your car and owe nothing until then. Use that period of time to look for another vehicle you can afford. If you choose to let your house go back, you will normally have about a year to live in it rent free. The shortest period for a foreclosure is about 6 months, and I have seen it take up to 2 years. Remember, a repossession will normally do a lot more damage to your credit than a bankruptcy. Filing a Chapter 13 to catch up on your payments (within 2 years) is one way to keep your home. The only good reasons to let your house go back are that you have a large amount of negative equity in it or that it is an overwhelming burden. Will I lose my 401(k) or retirement fund? No, your retirement is completely exempt and protected under both Michigan (state) and Federal (United States) law. Other states have other exemptions to protect retirement plans. However, you should talk to a qualified Attorney to get his opinion. The United States Supreme Court has held that pension plans, 401(k) plans, and other "ERISA-qualified plans" are generally excluded from the Bankruptcy Estate under 11 U.S.C. sec. 541(c)(2). Unlike 401(k) plans, IRA accounts are not ERISA-qualified plans. However, in Michigan and most other states, an IRA may be excluded from the Bankruptcy Estate or otherwise exempt because of a state statute. Some Bankruptcy Court judges have held that an IRA may be partially exempt under 11 U.S.C. sec. 522(d)(10)(E). I was just sued and they have just attached my paycheck or bank account what can I do? If property was taken from you just before filing bankruptcy, and it was over $600, the creditor can sometimes be forced to give it back. I will charge a fee of 50% of the amount I am able to recover from the creditor, if any. Liens on property that were from a lawsuit can be removed. Garnishments and foreclosures can be stopped. The sooner you seek help, the sooner you can stop the procedure. It is important to seek help as quickly as possible. What happens if I quit making my payments in a Chapter 13?

Your Chapter 13 will be dismissed from Court, and you will go back to owing the original debt and being unprotected. However you should be able to re-file. In cases of multiple repeat filings, however, the Court may dismiss the case with a 180 day bar (prohibition) to re-filing under any Chapter. This is rare and usually occurs when it is obvious to the Court that you are abusing the privilege that a Chapter 13 Bankruptcy offers. Can I reduce my monthly credit card or automobile payments in a Chapter 13? Yes, a Chapter 13 can reduce your monthly credit card and automobile payments. It can also reduce your interest rates to 12%, 10%, or even 0% on tax, secured, and unsecured debts. Note that you cannot force your mortgage company to take less per month than the normal monthly payment in your mortgage. You can, however, pay the arrearage (amount you are behind) over 36 months at 0% interest. Do I have to pay back 100% of what I owe in a Chapter 13? No. You can repay as little as 10% to your Creditors in a Chapter 13. The amount you pay to your unsecured creditors depends on your ability to pay (i.e. your net disposable income vs. your reasonable monthly expenses). This is the "best interest of the creditors" test. Your plan must be proposed in good faith, it must not be a disguised Chapter 7. The liquidation analysis requires you pay the amount, if any that your creditors would receive if your case had been filed under Chapter 7 and your estate were liquidated. Your Chapter 13 must pay at least what a Chapter 7 would have paid. Certain plans may pay much less than 100% if that is all you can afford. The Trustee likes to see a 100%, 36 month plan. Can I pay some Creditors and not others in a Chapter 13? In a Chapter 13, you can pay the secured Creditors more than the unsecured Creditors and the priority debts differently than the secured Creditors. You can't (shouldn't) discriminate and pay one unsecured Creditor differently than other unsecured Creditors. Should I try a Debt Counseling Service instead of filing bankruptcy? How do Debt Counseling services work? "Debt Counseling Services" are often highinterest loan companies. Other times, they are agencies that pocket 10-40% of the monthly money that you pay to them as fees for their "counseling". Most of these services will combine your bills and send a partial payment to each bill that you owe. Usually there best interest are not for you but for their ultimate client in many cases, the credit card companies. Your credit will be listed by the credit card companies as delinquent for sending in partial payments, and the reduced amounts sent in may not even cover the interest that a debt charges. These "Counseling Services" are often simply rip-offs that pretend to be charities or helping agencies. They are not using the law to your advantage and have no real "power" to deal with your creditors. Filing a Bankruptcy petition puts the ball in your Court.

If you pay a debt counseling service $100 a month, what happens is that they take up to $40 for themselves and then send your Creditors $60. Your bills fall even farther behind. Eventually, Creditors file lawsuits and you are forced into bankruptcy anyway. Very few of these "repayment plans" work and over 90% fail, leaving you worse off. Another scam is that some debt counseling companies will charge thousands of dollars by promising to find you a consolidation loan as a loan broker or mortgage broker. These loans end up being at a high-interest rate or they pocket your money and never give you the loan. Others strip the equity from your home. Whatever method used, "Debt Counseling Services" are often scams meant to take your money when you are already in trouble. Also be wary of using services that claim to "repair" your credit file. Some may attempt to create a new credit file by getting a new social security number. Changing your identity is a felony, especially if you steal another person's identity. Creating a false identity and using it may also be a felony. How long should I keep a copy of my Bankruptcy? You should keep a copy of your bankruptcy, with your tax papers, for at least 7 years. You are only required to keep receipts 3 years by the tax department after 3 years they have the burden of proof but keep them for 7 years anyway. When will I be able to get credit again? Normally, you will qualify for a home mortgage at normal rates within 2 years. You will be able to get other credit within 6 months to a year. Your ability to get credit is based on your income and your history of repayment, as well as the security you offer. You should be able to purchase a car or house if you reaffirm one or two debts and pay for them on time after your discharge. You always have to be able to afford what you are buying on credit or meet credit standards. You will have to reestablish your credit by paying on time after your filing. There are companies that lend to you while you are in bankruptcy and just after bankruptcy. 722 Redemption Funding will sell you a car at wholesale price (at about 25% interest), and they will also finance the redemption of some cars at the wholesale book value. Will my employer and landlord find out about my bankruptcy? Bankruptcy petitions are public records; however, under normal circumstances, no one will know you filed a bankruptcy petition unless you tell them. If your employer or landlord is a Creditor, it must be listed as a Creditor on the schedules, and it will receive notice of the bankruptcy proceeding. In some states, Chapter 13 Debtors are required to make payments through wage garnishment, which means the employer will learn about the bankruptcy. Will this affect my getting an apartment?

Many of the larger apartment complexes are owned by banks, and banks tend to grant leases according to credit bureau reports. This may affect you. Small landlords will call former landlords and may not check credit reports. Can employers discriminate or fire me? No. There is an anti-discrimination section of the Bankruptcy Code that prevents employers and the state of Michigan from denying you licenses or discriminating against you when hiring. But do yourself a favor: Keep it to yourself. They generally won't know unless you tell them. What are bankruptcy crimes? Do they exist? Yes. Criminal statutes related to bankruptcy can be found at 18 U.S.C. sections 151 to 157. Examples of bankruptcy crimes are knowingly and fraudulently concealing assets, lying under oath or on bankruptcy schedules, and knowingly and fraudulently filing a false proof of claim. Bankruptcy fraud can also be used to support a RICO claim. Bankruptcy crimes are often the result of claiming that you don't own property that you do own or that has been transferred to conceal it from the Court. Do I have to disclose all of my assets? Yes. If you knowingly and fraudulently conceal an asset from the Court, you have committed a felony and you can be fined up to $5000, imprisoned for up to five years, or both. However, this is rare and normally comes up in only the worst cases. In addition, the Court can deny discharge, or dismiss or convert your bankruptcy proceeding. Can I run up charges on my credit cards just before filing? The official answer is "No". Many people do make some minor charges on their charge cards just before filing. (Read between the lines here.) Charges of over $1000 on any one card within 60 days before filing are presumed to be fraudulent and nondischargeable. Cash advances totaling $1000 or more within 60 days of filing are nondischargeable. Charges to an account more than 60 days before filing are presumed proper regardless of the amount. There is no reason to pay any further on debts that you are planning to avoid in bankruptcy. Normally, you should file as soon as you can, but it won't matter if you pay the bills or not before you file. It doesn't matter if you owed $10,000 or $10,000,000 before you filed or whether or not you paid on time before you file bankruptcy. We suggest to clients that they not charge over $1000 on any one credit card or loan within 60 days before filing, but you certainly don't want to pay any more on the cards, and you may want to take one last small, reasonable trip to the mall. If you charge more than $1000 within that 60 day period, the credit card company may require you to pay the full amount owed to them. So, the simple answer is not to charge anything for

60 days before you file. We have had clients charge over $5000 dollars, and wait 90 days before filing, with no problem. However, be aware that "fraud" is open to judicial discretion. The anti-fraud statute also looks at whether or not the charges were for luxury items or normal purchases: A fur coat or jewelry would be more likely to be seen as fraudulent than school clothes for the children, gas, and groceries. Can I give property away just before filing? Gifts of property over $600 just before filing are improper, and the Court can go after that property and the person you gave it to. Gifts under $600 are not improper. Can I bankrupt my utility bill? Yes, but they may make you pay a deposit equal to one month's service. If you include utilities in your bankruptcy, you need to immediately advise your utility that you have filed and tell them your case number and the date you filed. If you simply file a Chapter 7, don't pay, and don't contact them, you may end up having your service turned off. It may be a month before the utility finds out that you have filed, so if you list a utility advise them immediately. Can bankruptcy stop a lawsuit? Yes, but it will not stop criminal cases or criminal restitution. Criminal restitution is nondischargeable. Can I get my drivers license back? If you have lost your license due involvement in an accident where you had no or too little insurance, filing bankruptcy will restore your license. I will notify the proper authorities for you such as the Secretary of State and the Michigan Bureau of Driver Improvement. You may have to wait until your case has been discharged before the Secretary of State will reinstate your drivers license. What are predatory lenders? Certain Lenders don't care if you ever repay them not: They lend not on your ability to repay, but instead based on the equity that they can steal from your home or in their ability to overcharge you and then sell the very profitable loan to another lender. When you fail to pay, they foreclose to collect. They charge prepayment penalties, higher interest, and upfront loan costs to get you the loan. They often use unfair lending tactics, like flipping and packing, to increase income and then don't keep the loan but sell it to another company. They target poor, elderly, minorities, and the uneducated in advertising and overcharge heavily so that the loan can never be paid off. Home improvement companies will sometimes use these mortgage companies to process loans for home improvements that are poorly made (if they are made at all), and the result is that you have signed away your home for second-class home improvements.

Predatory Lenders often overcharge for filing fees, reporting costs, and closing fees, and then fail to report the charges. If you are lucky, you will be able to sue them for truth-in-lending violations and, perhaps, have a free home. The more they steal or overcharge you, the more proud they are of doing it to you. I owe 125% of my mortgage to the predatory lenders that took all the equity in my home when I refinanced. What can I do? In a Chapter 13, you may be able to reduce or remove the lien on a property and repay only the amount that the house is worth. This is called "lien stripping". However, you can only do this in a Chapter 13. You can't lien strip in a Chapter 7 bankruptcy except by redeeming the property under 722 or removing household goods and judicial liens under 522 (f). You can, however, lien strip mortgages and consensual liens, to the extent that they are unsecured, in a Chapter 13 and then convert to a Chapter 7. By doing this, you would pay 100% for the house mortgage that is really secured. In other words, you would only repay the value of the home to the mortgage holder and 10% on the other 25% in the Chapter 13. I have a small retirement account-is it exempt? My regular stock brokerage cash account on the day of filing will only have a minimal amount (if any) of cash and some shares of companies who are bankrupt and as of the moment, the stock is worthless. Normally retirement accounts can't be taken by creditors or the bankruptcy court. The question is whether or not this is a retirement account just calling it a retirement. Account does not make it one. Real retirement accounts cant be assigned or attached. If it can be spent by you, assigned, or attached it isn't a retirement account for purposes of the exemption. If the stock is worthless you can list it and if the trustee (which is what the trustee normally does with worthless property) abandons it then it will belong to you. However at the moment of filing your Chapter 7 bankruptcy all your property technically belongs to the Trustee. I notice that you have a few more creditors like DTE Energy, or some attorneys that I don't owe, or the creditor addresses are different, Why? This is just me covering all the bases and insuring that you discharge every possible debt and I sometimes know where the creditor wants the notice mailed. I also often list known collection agencies and collection attorneys who may later pick up the account.