Each year, thousands of U.S. households struggle with debt, and while a very few will eventually find ways to overcome that debt, most people will not. For those who know they will be unable to repay their debts, filing for bankruptcy is an effective option to resolve their debts permanently and without the threat of wage garnishment, creditor harassment, and foreclosure. Filing bankruptcy to discharge your debts provides a government-sanctioned process that provides permanent debt relief that is enforceable by law. At Behm Law Group Ltd., we help clients work through Chapter 7, Chapter 12 and Chapter 13 bankruptcy filings to find effective, long-lasting debt relief in Mankato, MN, and the surrounding area.
No matter what chapter you file, bankruptcy can be a detailed and nuanced process that requires the sharing of your current financial information with a third party. Your petition will need to include all of your debts— even ones that you want to keep—your income sources, your properties, and virtually all other aspects of your financial situation. The bankruptcy petition that you complete with your attorney is something that you sign under oath. You make the representations in your bankruptcy petition subject to penalty of perjury. Creditors rely on the accuracy of those representations. The trustee administering your bankruptcy case relies on the accuracy of those representations. The bankruptcy court itself relies upon the accuracy of those representations. Bankruptcy is an “on your honor” proceeding. When you file bankruptcy, no one comes knocking on your door and invading your residence to see what you own. However, it is vital and incumbent upon you and your attorney to make a good faith and detailed review of your financial circumstances and to make sure that the bankruptcy petition is completed as accurately as possible. The willful failure to correctly complete your bankruptcy paperwork may result a dismissal of your case, at best. At worst, the making of an intentionally false statement, concealing property or obtaining money or property by fraud in connection with a bankruptcy case can result in fines up to $250,000.00, or imprisonment for up to 20 years, or both.
The reason the court needs such detailed information is to:
- determine if you qualify for bankruptcy;
- correctly evaluate how to handle your case;
- work through each debt with respect to how creditors will be repaid or discharged; and
- avoid difficulties like contested matters and adversary proceedings.
In your particular case, there may be issues brought to the court from the trustee, bankruptcy judge, or one of the creditors involved. These issues could be presented either as contested matters or as adversary proceedings. Both will extend the duration of your case and both can cost you more money the longer they are left unresolved.
Adversary Procedures
These contests are lawsuits within a bankruptcy case typically brought to the court by creditors who want to have a discharge of a particular debt revoked, denied or otherwise objected to, creditors who are hoping to recover money or property from parties other than the bankruptcy filer, or creditors who wish to stop some other court action related to your case. Although it’s related to your case, an adversary proceeding is a separate and distinct matter.
Contested Matters
Contested matters are similar to adversary proceedings, but they are not proceedings that are distinct and separate from your case. Creditors or other parties can bring contested matters in a case by filing a motion that requires the court to make a ruling based on a particular matter. Contested matters are often resolved more quickly than the resolution of adversary proceedings, but they will still extend the duration of your case and you still likely will have to pay your lawyer more money to assist you in resolving them. The court will usually consider lifting the automatic stay, objecting to a creditor’s proof of claim, or objecting to a proposed chapter 13 repayment plan as contested matters.
To learn more about adversary procedures, contested matters, and how bankruptcy can provide permanent debt relief in Mankato, MN, and the surrounding region, call Behm Law Group Ltd. at (507) 387-7200 or email stephen@mankatobankruptcy.com.
