How do you file for bankruptcy?  Lawyers will tell it to you in legalese, and most consumer websites are chock full of inaccurate information.

This site, however, gets the basics right.  If you’re thinking of filing for bankruptcy in New York or elsewhere, give it a read.

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Bankruptcy is not the end of your world. It is a chance to start anew with a better understanding of how to handle your finances.

You can buy anything you want after bankruptcy - a car, a home, anything at all. Go out and win the lottery, and it’s all yours.

The question isn’t whether you can buy something, it’s whether you will qualify for financing.

Tqo different questions, two very different answers.

You will have to work hard to restore your credit. You can do this in steps. You will need to open a checking account and be very careful not to bounce any checks. Then open a savings account and try to make regular deposits. Having accounts with utility companies will also help, just be sure to make your payments on time. Pay your rent early.

Decide if you want a credit card or not. If you get one, use it carefully and pay the balance each month.

Restoring your credit won’t happen overnight. It will take some time. After all, it took years for you to get to the point where you had to file for bankruptcy. Be patient and meticulous with your payments. Keep a check on your credit report.

If you need a car right away, save enough to buy a beater car and drive it until you have repaired your credit.

Once you have reestablished your credit, it is possible to finance a car after bankruptcy.

You will see many car dealers that advertise bargains for bankruptcies. These dealers can be unscrupulous and charge extremely high interest or have hidden fees. Be aware that they may not have your best interest at heart. Shop around and ask about any fees or interest rates before you commit to buying. You will most likely have to pay a higher interest rate to purchase a car since your bankruptcy will have an impact on your credit report for years, but you don’t have to succumb to shady car dealers out to make a buck at your expense.

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When you file for bankruptcy an automatic stay goes into effect.

An automatic stay means that all creditors must stop any and all attempts to collect the debt you owe them. That means they cannot initiate collection calls or send collection notices. They must stop all garnishments and foreclosures. Any repossession actions must also cease. Unless the bankruptcy court lifts the stay, all debt collection activity must be stopped.

After you file for bankruptcy, the court will mail a notice to all the creditors listed on your bankruptcy schedule. It may take a week or two for all of the debt collection activities to cease.

If you decide to file for Chapter 13 bankruptcy instead of Chapter 7 bankruptcy, your creditors must stop any debt collection activity with any co-signers on your consumer debts.

Increasingly, consumers are reporting that they are still being harassed by debt collectors after filing for bankruptcy. These complaints are against debt collectors, not against the original creditors. Debts are that have been discharged in bankruptcy are being sold in an attempt to recoup some loses. Debt collectors are saying that they just bought the debt and didn’t know about the bankruptcy or otherwise pleading ignorance.

The Fair Debt Collection Practices Act (FDCPA) protects consumers against harassment from debt collectors. After the debt collector has been notified in writing with a copy of your Notice of Commencement of Bankruptcy, they must stop all collection efforts.

If the debt collector has knowledge of the bankruptcy filing and they continue to pursue the debt they may be in violation of the Bankruptcy Code. If the collection efforts continue after bankruptcy, you may have legal recourse. A qualified bankruptcy lawyer can help you review your options.

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Imagine that you had filed for bankruptcy and thought all your debt was discharged. Now imagine that one day out of the blue, you receive a collection call about a debt you know was discharged.
In this instance, no imagination is needed. Capital One Bank may be trying to collect your discharged debt.

Capital One filed a proof of claim on approximately 5600 debts that had been discharged in prior bankruptcy cases.  A proof of claim is a document that is filed with the bankruptcy court and used to validate the claim of a creditor.

According to L. Jed Berliner, Massachusetts Bankruptcy Lawyer, Capital One accepted about $340,000 on these discharged debts.

Capital One says that it has all ready returned most of the improperly obtained payments and that it is seeking to withdraw all of the proofs of claim that it has filed.

The U.S Department of Justice issued a press release stating that the U.S. Trustee Program announced on Oct 2, 2008 that it had filed with the United States Bankruptcy Court for the District of Massachusetts to enter into a settlement agreement with Capital One. Under the settlement, Capital One will be audited by an independent auditor, chosen by the courts and paid for by Capital One.  The auditor will examine about 650,000 Capital One customer accounts.

The settlement says that if more than 100 erroneous claims are found in one year then the audit period will be extended.  The settlement has to be approved by the U.S. Bankruptcy Court for the District of Massachusetts.

Under the settlement, any monies that Capital One received for the wrongly filed proofs of claim must be returned, as well as all monies reimbursed for any out of pocket expenses and attorney’s fees.

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A few days ago I posted about reopening your case to file a lawsuit for violating the discharge order.  My friend and Texas colleague Chuck Newton filed the following in response:

Enjoyed your last post about reopening your bankruptcy to file a discharge injunction violation.  We have stopped doing that, however.  Mainly it started when some clerks would insist on payment for reopening the case and I am a skinflint.  But, our opinion is that we do not need to do so in that the Court retains jurisdiction to enforce and rule upon its orders and injunctions.

Attached are some of the pleadings filed in a case in which a creditor filed a motion to dismiss our adversary as a result of the fact we did not reopen the bankruptcy case.  We did file a motion to reopen as a precaution.  The Court, as a result of ruling the Court had jurisdiction to hear the case regardless of the fact it was not reopened, denied the motion to reopen as moot because it was unnecessary for the Court to continue with this matter.

For those of you practicing law in Texas, take a look at Chuck’s documents.  He’s a great guy and a terrific lawyer, so if you’re in Texas and need someone to bring a stay violation or discharge violation case I encourage you to drop him a line.

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