Chapter 7 Bankruptcy Attorney

In a Chapter 7 bankruptcy case, the attorney is responsible for explaining to the debtor with secured debts all of these rights:

1. keep the security with continued ongoing payments as required by law
2. redeem the security by negotiation or motion with the court
3. reaffirm the underlying debt
4. surrender the security

Maintaining a Car Loan Without Debt Reaffirmation

When debt, like a car loan, is reaffirmed, there is the risk of incurring future deficiency claims.  This means if the debtor is not able to pay the loan, the car may be sold at market price, and the debtor liable for the difference between the loan and the market sales price.  In most situations with depreciating assets, the debtor may do better to use the asset and continue paying on a loan, but not reaffirm the debt so that if the debtor is not able to pay, s/he not liable for anything.

Document Requests

In representing a Chapter 7 bankruptcy debtor, the attorney lets the debtor know of all requests from the trustee and US Trustee.  The US Trustee oversees bankruptcy cases and the trustee assigned to the bankruptcy case of the debtor.  The debtor is responsible for getting the documents requested, not the attorney.  For example, if the trustee asks for prior paystubs of the debtor, the debtor needs to get the information from his/her employer.

Creditor Notification and Negotiation

The attorney replies to creditor questions on the bankruptcy case.  The attorney confirms the case filing, and may negotiate with a creditor if given authority by the debtor.

Stay of Collection Efforts

The attorney may help the debtor to notify creditors and collection agencies of the bankruptcy case.  The attorney may notify levying officers to stop evictions, foreclosures, wage garnishments, and other asset seizures.  The attorney may not file a bankruptcy case for the purpose of stopping collections if s/he does not think the debtor can go through a proceeding for some reason.  For instance, bankruptcy filings usually require a tax return, and if the debtor has never filed taxes, the attorney knows from the start the case will likely be dismissed so s/he cannot file a case just to hold up collections in the interim prior to dismissal.

Rinne Legal, with staff fluent in Russian, helps people with bankruptcies, estate planning (living trusts), and loan modifications in Contra Costa County, Sacramento County and Solano County. Rinne Legal has offices in Walnut Creek, Fairfield, Sacramento, and Elk Grove. Contact Rinne Legal for a free consultation.  These blog posts are for informational purposes only and not intended nor should be construed as legal advice.  These blog posts may be considered attorney advertising in some states. Prior results described on blog posts do not guarantee similar outcomes in future cases.  There is no intent to create an attorney-client privilege or relationship with anyone accessing information on this blog.  Authors posting on this blog are not obligated to reply to any emails seeking legal advice.  The information contained on this blog is not intended to be a solicitation.