A debtor is defined as a person or entity that owes an obligation or fixed amount. Most everyone understands what a debtor is because most everyone has debts. Mortgages, student loans, car payments, credit cards, medical bills… all debts. Being a debtor isn’t necessarily a bad thing. But in the context of bankruptcy, a debtor is a person that has filed for relief under the Bankruptcy Code.
The bankruptcy debtor’s obligations.
To file a bankruptcy, a petitioner must pay the filing fee and file a voluntary petition, statement of social security number, names and addresses of all creditors, statement of current monthly income, schedules of all assets and debts, schedules of all income and expenses, and statement of your financial affairs for the past couple of years. The debtor has to give the trustee their most recent tax return and copies of the last 60 days of pay stubs and/or other proof of income. Also, they need to have a pre-petition credit counseling certificate before filing and a debtor education certificate after filing to get your discharge.
Even more obligations for Michigan bankruptcy debtors.
It gets even better. In Michigan, like most jurisdictions, we have local court rules which supplement the Bankruptcy Code and the debtor has to comply with these also. After the case is filed, every debtor goes to a meeting of the creditors where they will answer the trustee’s questions about their income, assets, and financial affairs. The debtor shall have available at the meeting of creditors, neatly arranged, all of the following for one year prepetition:
(a) Documents to support all entries on schedule I, other than previously provided payment advices and tax returns;
(b) Documents to support all entries on schedule J, including canceled checks, paid bills or other proof of expenses;
(c) Certificates of title (originals if available, otherwise copies) for currently owned titled assets, including vehicles, boats and mobile homes (regardless of when acquired);
(d) A current statement from each secured creditor stating the amount owed;
(e) Originals of bank books, check registers, other financial accounts, bonds, stock certificates, and bank, brokerage and credit card statements;
(f) Copies of leases, mortgages, deeds and land contracts (These documents shall be provided for the time period six years prepetition.);
(g) Copies of life insurance policies either owned by the debtor or insuring the debtor’s life;
(h) Current property tax statements;
(i) Asset appraisals;
(j) Keys to non-exempt buildings and vehicles;
(k) Divorce judgments and property settlement agreements;
(l) Casualty insurance policies;
(m) Documents establishing the scheduled amounts of joint debts, if the debtor claims an entireties exemption;(n) The name, address and telephone number of each holder of a Domestic Support Obligation; and
(o) Any other specific document requested by the trustee relating to the schedules or statement of
financial affairs, if requested in writing at least 7 days before the first meeting of creditors.
Wow. That’s a lot. My favorite part of the court rule is that the documents must be neatly arranged. That sounds funny until the people called before you bring in a grocery bag or shoe box with paper flying out and then you will appreciate it. While it is not mandatory to have an attorney help you through the process, it is generally advised to have a lawyer experienced in bankruptcy to help you get ready. A good lawyer will handle the requirements with ease and make you feel like it was more simple than it really was.
A bankruptcy debtor quiz just for you.
While no one wants to be a bankruptcy debtor, you may be in good company. Here is a quick quiz: Who of the following filed for bankruptcy: Walt Disney, Sam Walton, Abraham Lincoln, P.T. Barnum or Stan Lee? Actually, all of them were debtors and they turned out just fine so don’t be so hard on yourself if you too are a bankruptcy debtor.
“D’ also stands for:
Christopher McAvoy is a Taylor, Michigan attorney and consumer bankruptcy lawyer who helps people in the Downriver area file Chapter 7 and Chapter 13 Bankruptcy. To find out more about bankruptcy, click here for contact info.