- Posted by Dan
- On January 1, 2011
- 0 Comments
I received a call last week. It began something like this. “I filed my own bankruptcy and now the Chapter 7 Trustee says he is going to sell my house. Can you help?”
This is not the first time I’ve received this type of a call.
When money is tight, folks are often tempted to file a bankruptcy in Knoxville by using what is known as a “Petition Preparer”. A Petition Preparer will provide the forms for filing a bankruptcy and will often actually complete the forms for you.
Unfortunately, since they are not lawyers they are prohibited from giving “legal advice” of your rights and responsibilities in the bankruptcy case.
Another problem is that they may not accurately disclose to you that there are a number of strategic decisions that must be made in essentially every bankruptcy case. Among these “strategic decisions” are:
1. When should you file?
2. Should you file a Chapter 7 Bankruptcy, a Chapter 13 Bankruptcy or a Chapter 11 Bankruptcy?
3. What exemptions are applicable?
4. Which of my assets may be at risk?
There are others, but these are some of the more important ones.
Back to the call: this was an urgent plea for help.
Because there was equity in the house, the Chapter 7 Trustee was insistent that the house be sold. Because the debtor (my caller) had already received his discharge, he could not convert the case up to a Chapter 13 where he could have “bought out the equity” under a Chapter 13 re-payment plan.
As a result there was very little I could do. One option that could be pursued is looking to family members who might loan the debtor money to buy out the equity from the Chapter 7 Trustee.
Short term savings in trying to navigate the seas of the federal bankruptcy system in Knoxville may be short sighted and could turn disastrous. I recommend retaining an experienced bankruptcy attorney from the very beginning. Beware of attorneys who have just recently decided to become bankruptcy attorneys. Take experience to court with you.
Photo Credit: Flickr: The Whites Dog Alive