Please Review:

These are REQUIRED Bankruptcy Notices. 

Bankruptcy Disclosures Required by 342(b); 527(a)(2); 527(b); 527(c)

In accordance with section 342(b) of the Bankruptcy Code, this notice: (1) Describes briefly the services available from credit counseling services; (2) Describes briefly the purposes, benefits and costs of the four types of bankruptcy proceedings you may commence; and (3) Informs you about bankruptcy crimes and notifies you that the Attorney General may examine all information you supply in connection with a bankruptcy case. You are cautioned that bankruptcy law is complicated and not easily described. Seek the advice of an attorney to learn of your rights and responsibilities should you decide to file a petition.

Creditors lobbied hard when the bankruptcy code was revised in 2005 to require notices be given to people considering bankruptcy. In our opinion they were created to scare hardworking people from bankruptcy. People who are honest have no reason to worry.

Disclosures Required by 342(b)

CHAPTER 7:  Liquidation:  Total Court Fee:  $338.00

• Chapter 7 is for individuals who have financial difficulty preventing them from paying their debts and who are willing to allow their nonexempt property to be used to pay their creditors. The primary purpose of filing under chapter 7 is to have your debts discharged. The bankruptcy discharge relieves you after bankruptcy from having to pay many of your pre-bankruptcy debts. Exceptions exist for particular debts, and liens on property may still be enforced after discharge. For example, a creditor may have the right to foreclose a home mortgage or repossess an automobile. However, if the court finds that you have
  committed certain kinds of improper conduct described in the Bankruptcy Code, the court may deny your discharge. You should know that even if you file
  chapter 7 and you receive a discharge, some debts are not discharged under the law.Therefore, you may still be responsible to pay:
  • most taxes;
  • most student loans;
  • domestic support and property settlement obligations;
  • most fines, penalties, forfeitures, and
  • criminal restitution obligations; and
  • certain debts that are not listed in your bankruptcy papers.
• You may also be required to pay debts arising from:
  • fraud or theft;
  • fraud or defalcation while acting in breach of fiduciary capacity;
  • intentional injuries that you inflicted; and death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs.
• If your debts are primarily consumer debts, the court can dismiss your chapter 7 case if it finds that you have enough income to repay creditors a certain amount. You must file Chapter 7 Statement of Your Current Monthly Income (Official Form 122A–1) if you are an individual filing for bankruptcy under chapter 7. This form will determine your current monthly income and compare whether your income is more than the median income that applies in your state. If your income is not above the median for your state, you will not have to complete the other chapter 7 form, the Chapter 7 Means Test Calculation (Official Form 122A–2). If your income is above the median for your state, you must file a second form —the Chapter 7 Means Test Calculation (Official Form 122A–2). The calculations on the form— sometimes called the Means Test—deduct from your income living expenses and payments on certain debts to determine any amount available to pay unsecured creditors. If your income is more than the median income for your state of residence and family size, depending on the results of the Means Test, the U.S. trustee, bankruptcy administrator, or creditors can file a motion to dismiss your case under § 707(b) of the Bankruptcy Code. If a motion is filed, the court will decide if your case should be dismissed. To avoid dismissal, you may choose to proceed under another chapter of the Bankruptcy Code. If you are an individual filing for chapter 7 bankruptcy, the trustee may sell your property to pay your debts, subject to your right to exempt the property or a portion of the proceeds from the sale of the property. The property, and the proceeds from property that your bankruptcy trustee sells or liquidates that you are entitled to, is called exempt property. Exemptions may enable you to keep your home, a car, clothing, and household items or to receive some of the proceeds if the property is sold. Exemptions are not automatic. To exempt property, you must list it on Schedule C: The Property You Claim as Exempt (Official Form 106C). If you do not list the property, the trustee may sell it and pay all of the proceeds to your creditors.

CHAPTER 11:  Reorganization:  Total Court Fee: $1,738.00

By and large, chapter 11 is a type of bankruptcy reserved for large corporate reorganizations.  Chapter 11 shares many of the qualities of a chapter 13, but tends to involve much more complexity on a much larger scale. Chapter 11 is a proceeding for the reorganization of a debtor engaged in business.  Under some circumstances, it is available to consumers as well.  Under Chapter 11, a debtor may propose a plan which modifies the rights of one or more classes of creditors.  The rights of the creditors may be impaired either by a consent of the majority in number or two-thirds in amount of the class affected.  A liquidation plan results in creditors being “deemed” impaired.

CHAPTER 12:  Family Farmer:  Total Court Fee:  $278.00

Chapter 12 of the Bankruptcy Code was enacted by Congress in 1986, specifically to meet the needs of financially distressed family farmers.  The primary purpose of this legislation was to give family farmers facing bankruptcy a chance to reorganize their debts and keep their farms.

However, as with chapter 11, since chapter 12 does not usually pertain to individuals whose debts are primarily consumer debts, further information about chapter 12 will be provided by reference to the same “Bankruptcy Basics” brochure referred to above, which can be accessed over the internet at the same said website as mentioned for chapter 11.

CHAPTER 13: Repayment of All or Part of Debts of Individual with Regular Income Total Court Fee:  $313.00

In a chapter 13 case, the debtor puts forward a plan, following the rules set forth in the bankruptcy laws, to repay certain creditors over a period of time, usually from future income.  A chapter 13 case may be advantageous in that the debtor is allowed to get caught up on mortgages or car loans without the threat of foreclosure or repossession, and is allowed to keep both exempt and nonexempt property.  The debtor’s plan is a document outlining to the bankruptcy court how the debtor proposes to dispose of the claims of the debtor’s creditors.  The debtor’s property is protected from seizure from creditors, including mortgage and other lien holders, as long as the proposed payments are made and necessary insurance coverage remains in place.  The plan generally requires monthly payments to the bankruptcy trustee over a period of three to five years.  Arrangements can be made to have these payments made automatically through payroll deductions.

Chapter 13 is designed for individuals with regular income who are temporarily unable to pay their debts but would like to pay them in installments over a period of time.  You are only eligible for Chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.  You are required to seek relief under Chapter 13, rather than Chapter 7, if your filing under Chapter 7 would constitute “abuse” within the meaning of the Bankruptcy Code.

Under Chapter 13, you must file a plan with the Court to repay your creditors all or part of the money that you owe them, using your future earnings.  Usually, the period allowed by the court to repay your debts is three to five years.  Your plan must be approved by the Court before it can take effect.

Under Chapter 13, unlike Chapter 7, you may keep all your property, both exempt and non-exempt, as long as you continue to make payments under the plan.

After completion of payments under your plan, your debts are discharged, except for the following debts: trust fund taxes; taxes for which returns were never filed or filed late (within two years of the petition date); taxes for which you made a fraudulent return or evaded taxes; fraud and false statements; undisclosed debts; defalcations by a fiduciary; domestic support payments; student loans; drunk driving injuries; criminal restitution and fines; and civil restitution or damages awarded for willful or malicious actions causing personal injury or death.

 Services Available from Credit Counseling Agencies

Individuals are ineligible for relief under any chapter of the Bankruptcy Code unless, within 180 days of the bankruptcy filing, they receive “an individual or group briefing” from a non-profit budget and credit counseling agency approved by the United States Trustee.  The agency must provide its services without regard to the debtor’s ability to pay any fee.  The service may be provided personally, telephonically, or on the Internet and must outline opportunities for credit counseling and assist in performing a related budget analysis.  Services provided by credit counseling may include evaluation of alternatives to bankruptcy, including but not limited to debt management plans.  Such plans required concurrence by creditors and this might not be possible in all cases.  The Credit Counseling requirement under 11 U.S.C. §109 must be met prior to filing the petition (unless petition is accompanied by a motion for extension for exigent circumstance or a declaration/certification of waiver).

If you’re not disciplined enough to create a workable budget and stick to it, can’t work out a repayment plan with your creditors, can’t keep track of mounting bills, or need more help with your debts than can be achieved by merely having a few of your unsecured creditors lower your interest rates somewhat, it makes NO sense to consider contacting a credit counseling organization.

If, on the other hand, you meet all of those criteria, there are many non-profit credit counseling organizations are nonprofit that will work with you to solve your financial problems.

But be aware that, just because an organization says its “nonprofit,” there is no guarantee that its services are free, affordable, or even legitimate.  In fact, some credit counseling organizations charge high fees, which may be hidden, urge consumers to make “voluntary” contributions that can cause more debt, urge consumers to enter “debt repayment plans” they simply cannot afford.

Most credit counselors offer services through local offices, the Internet, or on the telephone.  If possible, it probably best to find an organization that offers in-person counseling.  Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs.  Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops.  Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting.  Legitimate counselors will discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems.  An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

If your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in what is knows as a “debt management plan” or “DMP.”  A DMP alone is not credit counseling, and DMPs are not for everyone.  You should sign up for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation, has offered you customized advice on managing your money, and has analyzed your budget to make sure that the proposed DMP is one you can afford.  However, remember that all organizations that promote DMP’s fund themselves in part through kickbacks from the creditors involved, which are called “fair share,” so you have to be wary as to whose best interest the counselor has in mind.  Even if a DMP is not appropriate for you, a reputable credit counseling organization still can help you create a budget and teach you money management skills.

In a DMP, you deposit money each month with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills and medical bills, according to a payment schedule the counselor develops with your creditors.  Your creditors may agree to lower your interest rates or waive certain fees, but it is always best to check with all your creditors, just to make sure they offer the concessions that a credit counseling organization is promising you.  A successful DMP requires you to make regular, timely payments, and could take 48 months or more to complete.  Ask the credit counselor to estimate how long it will take you to complete the plan.  You may have to agree not to apply for — or use — any additional credit while you’re participating in the plan, and a DMP is absolutely useless if your problems stem from or involve your secured creditors holding your car, truck or home as collateral.  DMP’s are also useless if your problems stem from alimony, child support or overdue taxes.

The bottom line is this: If all you need is a little lowering of your interest rates on some unsecured debts, a DMP might be the answer.  However, if what you really need is to reduce the amount of your debt, bankruptcy may be the only solution.

Important Information

A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury in connection with a case under this title shall be subject to fine, imprisonment, or both; and

All information supplied by a debtor in connection with a case under this title is subject to examination by the Attorney General.

Disclosures Required 527(a)(2)

Under federal law, we are considered a “debt relief agency” and you are considered an “assisted person”.  We are required by section 527(a) of the Bankruptcy Code to give you the following notices:

(A)       all information that the assisted person is required to provide with a petition and thereafter during a case under this title is required to be complete, accurate, and truthful;

(B)       all assets and all liabilities are required to be completely and accurately disclosed in the documents filed to commence the case. The replacement value of each asset as defined in § 506 must be stated in those documents where requested after reasonable inquiry to establish such value;

(C)       current monthly income, the amounts specified in section 707(b)(2), and, in a case under Chapter 13 of this title, disposable income (determined in accordance with § 707(b)(2)) are required to be stated after reasonable inquiry; and

(D)       information that an assisted person provides during his or her case may be audited pursuant to this title, and failure to provide such information may result in dismissal of the case under this title or other sanction, including a criminal sanction.

Disclosures Required by Section 527(b)

IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY

If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST.  Ask to see the contract before you hire anyone.

The following information explains what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine.

Before filing a bankruptcy case, either you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and decide which form of relief is most likely to be beneficial for you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents (Petition, Schedules, Statement of Financial Affairs, and in some cases a Statement of Intention, as well as in some cases a Statement of Intention) must be prepared correctly and filed with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court. Once your case starts, you must attend the required first meeting of creditors, where you may be questioned by a court official called a “trustee” and by creditors.  (One of our attorneys will attend the meeting with you.  Our attorneys will explain the entire process to you).

If you choose to file a Chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. A creditor is not permitted to coerce you into reaffirming your debts.

If you choose to file a Chapter 13 case, in which you repay your creditors what you can afford over 3 to 5 years, you may also want help preparing your Chapter 13 plan and with the confirmation hearing on your plan, which will be before a bankruptcy judge.

If you select another type of relief under the Bankruptcy Code other than Chapter 7 or Chapter 13, you should consult someone familiar with that type of relief.

Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only lawyers, not bankruptcy petition preparers, can give you legal advice.

Disclosures Required by 527(c)

Except to the extent Walden Legal Solutions, LLC (the “Debt Relief Agency”) provides the required information itself after reasonably diligent inquiry of the you (the “Person Assisted”) or others so as to obtain such information reasonably accurately or inclusion on the Bankruptcy Petition, Schedules, or Statement of Financial Affairs, Walden Legal Solutions, LLC, by this CLEAR AND CONSPICUOUS WRITING desires to inform you how to provide the information required in your Bankruptcy Petition, Schedules, and Statements of Financial Affairs:

HOW TO VALUE ASSETS AT REPLACEMENT VALUE

You must determine how much your personal property is worth as it is today.  Do not value your property based upon what you can sell it for.  Instead, value it as what you would have to pay to replace it.  If your property is new or close to new, consider retail value adjusted to whatever extent appropriate for the amount the property has been used.  If there is a market for your property as used, you may use that market to determine value.  For example, you may consider using thrift store prices or prices at house or garage sales or at a secondary marketplace such as eBay to determine what it would cost you to replace your personal property.

HOW TO DETERMINE CURRENT MONTHLY INCOME

In order to determine “current monthly income”, you must consider your income for the six months immediately prior to commencement of your Bankruptcy Petition.  If you provide us with accurate payment advices for the six months immediately prior to the commencement of the Bankruptcy Petition, we will assist you in determining your “current monthly income”.

HOW TO DETERMINE THE AMOUNT SPECIFIED IN SECTION 707(b)(2) AND, IN A CHAPTER 13 CASE, HOW TO DETERMINE DISPOSABLE INCOME IN ACCORDANCE WITH SECTION 707(b)(2) AND RELATED CALCULATIONS

In order to determine these amounts, you should provide us with actual expenditures you make in each of the pertinent categories.  We will compare them to the allowed amounts pursuant to the current Internal Revenue Standards in order to determine your “disposable income” in accordance with Section 707(b)(2).

HOW TO COMPLETE THE LIST OF CREDITORS, INCLUDING HOW TO DETERMINE WHAT AMOUNT IS OWED AND WHAT ADDRESS FOR THE CREDITOR SHOULD BE SHOWN

In order to determine your list of creditors, the amount owed and what address to be shown, we will need to see your bills for each creditor for a period of 90 days prior to the commencement of your case.  We may utilize a nation list of creditors’ addressed for additional information.  It is necessary to have the property address for each creditor and the account number for each creditor.

HOW TO DETERMINE WHAT PROPERTY IS EXEMPT AND HOW TO VALUE EXEMPT PROPERTY AT REPLACEMENT VALUE AS DEFINED IN SECTION 506 OF THE BANKRUPTCY CODE

When you provide us the complete list of your property, we will evaluate with you the applicable law of Kansas as well as any other state in which you may have lived in recent years to determine which exemption applies.  We do not think that it will be very easy or appropriate for you to determine exemptions without appropriate and competent bankruptcy assistance.

As your Kansas City Virtual Attorneys, Walden Legal Solutions will walk you through every step. You do not need to determine any of these items on your own.

What Bankruptcy Can and Cannot Do

Bankruptcy may make it possible for financially distressed individuals to:

1. Discharge liability for most or all of their debts and get a fresh start.  When the debt is discharged, the debtor has no further legal obligation to pay the debt.
2. Stop foreclosure actions on their home and allow them an opportunity to catch up on missed payments.
3. Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
4. Stop wage garnishment and other debt collection harassment, and give the individual some breathing room.
5. Restore or prevent termination of certain types of utility service.
6. Lower the monthly payments and interest rates on debts, including secured debts such as car loans.
7. Allow debtors an opportunity to challenge the claims of certain creditors who have committed fraud or who are otherwise seeking to collect more than they are legally entitled to.

Bankruptcy, however, cannot cure every financial problem.  It is usually not possible to:

1. Eliminate certain rights of secured creditors.  Although a debtor can force secured creditors to take payments over time in the bankruptcy process, a debtor generally cannot keep the collateral unless the debtor continues to pay the debt.
2. Discharge types of debts singled out by the federal bankruptcy statutes for special treatment, such as child support, alimony, student loans, certain court ordered payments, criminal fines, and some taxes.
3. Protect all cosigners on their debts.  If relative or friend co-signed a loan, which the debtor discharged in bankruptcy, the cosigner may still be obligated to repay whatever part of the loan not paid during the pendency of the bankruptcy case.
4. Discharge debts that are incurred after bankruptcy has been filed.  Bankruptcy’s Effect on Your Credit

By federal law, a bankruptcy can remain part of a debtor’s credit history for 10 years.  Whether or not the debtor will be granted credit in the future is unpredictable, and probably depends more on what good things the debtor does in the nature of keeping a job, saving money, making timely payments on secured debts, etc., than the fact that the debtor filed bankruptcy.

In some cases, it may actually be easier to obtain future credit after bankruptcy, because new creditors may feel that since the old obligations have been discharged, they will be first in line.  The also recognize that the debtor cannot again file bankruptcy for at least the next four years in the case of chapter 13 or eight years in the case of chapter 7.  The truth is that if a debtor cannot pay his or her bills, and the debtor’s credit is already ruined or exhausted, filing bankruptcy can actually be an important first step in re-building credit.

NOTICE OF NON-REPRESENTATION

You are not a client of Walden Legal Solutions, LLC until you decide to hire us, and we agree to accept you as a client, and a written fee agreement is signed.

Unless and until you hire Walden Legal Solutions, LLC and sign a written fee agreement, you are not a client and we do not represent you.

There is no attorney-client privilege until you become a client.  Walden Legal Solutions, LLC does not represent you in any manner until you become a client.

Nothing that is said to you by an attorney from this office, or any of the staff, can result in representation of you by this office until you are a client.