Consumer Bankruptcy FAQs

What is a discharge in bankruptcy?

Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Are all of the debtor’s debts discharged or only some?

Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. The most common types of non-dischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, and debts for certain condominium or cooperative housing fees.

What happens when a public company files for protection under the federal bankruptcy laws?

Federal bankruptcy laws govern how companies go out of business or recover from crippling debt. A bankrupt company, the “debtor,” might use Chapter 11 of the Bankruptcy Code to “reorganize” its business and try to become profitable again. Management continues to run the day-to-day business operations but all significant business decisions must be approved by a bankruptcy court. Under Chapter 7, the company stops all operations and goes completely out of business. A trustee is appointed to “liquidate” (sell) the company’s assets and the money is used to pay off the debt, which may include debts to creditors and investors.

What is chapter 7 bankruptcy?

Chapter 7, entitled liquidation, contemplates an orderly, court-supervised procedure by which a trustee collects the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor’s assets. These cases are called “no-asset cases.” A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, the debtor receives a discharge that releases the debtor from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed.

What is chapter 13 bankruptcy?

Chapter 13, entitled Adjustment of Debts of an individual With regular income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house. It is also favored because it allows the debtor to propose a “plan” to repay creditors over time—usually three to five years. At a confirmation hearing, the court either approves or disapproves the plan, depending on whether the plan meets the Bankruptcy Code’s requirements for confirmation. Chapter 13 is very different from chapter 7, since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor’s anticipated income over the life of the plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor action while the plan is in effect. The discharge is also considerably broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.

Criminal Law FAQs

When should I call a lawyer?

As soon as you become aware that the police (or some other investigating agency) are looking for or investigating you, or if you believe that you may have committed a crime. A lawyer can intervene with the police and either prevents an arrest or, if you are going to be arrested, arrange for your surrender at a time and in a manner that minimizes embarrassment to you or your family. Hiring a lawyer will also protect you from being questioned by the police.

If I am innocent, why do I need a lawyer?

Innocent people do get accused, AND CONVICTED, of crimes. Also, people who may have committed one crime often get accused (sometimes wrongfully) of committing additional, and more serious, crimes. As the accused, you have a constitutional right to remain silent. You are always better off having a lawyer learn about the accusation, discuss it with you, and develop a strategy for responding to the charge.

What should I do if I am arrested?

First, be polite and cooperative. Arguing or struggling or fighting will never make the situation better. Rarely, if ever, will a person be able to convince an officer to stop an arrest.

Second, say nothing to the police other than your name and other identifying information (e.g., address, and date of birth). DO NOT discuss the situation with them. You should tell the police that you want to speak to a lawyer, and that you do not want to speak to them until you have spoken to a lawyer.

Finally, call a lawyer — as soon as possible.

Should I tell the police my side of the story?

No. You should NEVER talk to the police without first contacting a lawyer. In fact, many convictions result from statements made to the police. Whether the officer speaking to you is nasty or nice, he or she is looking for evidence that can be used against you. The police are even permitted to lie to you or otherwise trick you in order to get you to talk. Tell the officer that you want to talk to a lawyer.

Remember: You have the right to remain silent. Exercise that right.

The police did not read me my Miranda rights. Can I still be charged?

Yes. The police are not required to read you any Miranda rights (“You have the right to remain silent. Anything you say can and will be used against you. . . .). The Miranda rights are required only if the police or prosecutor want to use what you say against you in court. The rights were developed to make sure that a person knows that he or she does not have to talk to the police, and thus to make sure that any statements made to the police are made voluntarily. In practice, the police often do not tell the truth about having given the rights, or read them to you in a way that makes you think that you have to talk. You should NEVER talk to the police without first contacting a lawyer.

What happens after I am arrested?

You will first be taken to a police precinct, where the police will prepare the various reports that they must fill out following an arrest. You will be interviewed regarding your name, address and other identifying information. You will be photographed and fingerprinted.

If the offense is minor, you may be released from the police precinct with a summons to appear in court on a future date. A lawyer may be able to convince the police to release you with a summons.

If you are not released with a summons, you will be brought to court within approximately twenty-four hours (the timing varies depending on the county in which you are arrested and the number of other arrests made that day) for what is called an arraignment. At the arraignment, you will be formally notified of the charge or charges that have been filed against you, and the judge will decide whether bail should be set and in what amount. The lawyer can play a very important role in convincing the judge to release you without bail or with bail in an amount that you will be able to afford. If you have not already hired a lawyer, the judge may appoint a lawyer to represent you at the arraignment.

Will the process be different if the person arrested is a minor?

If the person arrested is 16 or older, he or she is considered an adult. The arrest processing will be the same as described above. If the person arrested is under 16, he or she will probably be taken to Family Court, where an arraignment will take place and a bail determination will be made as above. In some circumstances, a juvenile arrested for serious offenses (such as murder or robbery) may be prosecuted as an adult.

What is bail?

Bail is money or other property that is deposited with the court to make sure that the person accused (the “defendant”) will return to court when he or she is required to do so. So long as the defendant returns to court as required, the bail will be returned at the end of the case, even if the defendant is ultimately convicted and sentenced to jail. However, if the defendant does not come to court when required, the bail will be forfeited to the court and will not be returned.

For example, if bail is set at $1000, the defendant will be held in jail unless and until someone brings $1000 to the court or the jail. The person posting the bail will be given a receipt and, within a few hours, the defendant will be released. The court will then hold the $1000 until the case is over. Assuming the defendant goes to court when required, the bail will be “exonerated” (minus a small administrative cost) at the end of the case. A check will be mailed to the name and address given at the time the bail was posted.

What is a bail bond?

A bail bond is a promise to pay the amount of the bail if the defendant does not return to court when required to do so. Only a licensed bail bondsman can post a bond with the court. Bondsmen are private businesses that are licensed by the state to perform this role. Bail bondsmen will charge a fee to post the bond, and will usually require some type of collateral (cash or property) to secure the bond. At the end of the case, the bond will be released and the collateral will be returned. The bondsmen keeps the fee. If the defendant does not return to court and the bond is forfeited, the bail bondsman will be required to pay the court the amount of the bond. The bondsman, in turn, will keep the collateral or come to you to be made whole.

For example, if bail is set at $10,000 bond or cash, you may choose to bring the entire bail of $10,000 to the jail and the defendant will be released. Although the full amount must be deposited with the court, at the end of the case all of the money (minus a small administrative fee) will be returned. Alternatively, you may go to a bail bondsman. A bondsman will probably charge a fee of approximately $800 to $1,000 to post a $10,000 bond, and will probably ask for around $3000 in cash or property as collateral. (Since these are private businesses, fee and collateral requirements vary). In this example, the benefit of using a bondsman is that approximately $4000 is needed to get the defendant out of jail rather than $10,000. The drawback is that at the end of the case, assuming that the defendant appears in court when required to do so, the bail bondsman’s fee of $800 to $1,000 is not returned.

How much will it cost to hire a lawyer?

The swift and obvious answer is . it depends. . The cost of defending against criminal charges will vary depending upon the charges, the facts of the case, and whether the matter proceeds to trial. Some lawyers charge an hourly rate while others charge a single fee for the entire case or a separate fee for different stages of the case. For example, there may be one fee for all pretrial matters and an additional fee for the trial itself.

A good lawyer will provide a free initial consultation so that he can assess your case and establish a reasonable fee and so that you can decide whether you feel comfortable with him and his style. Do not be reluctant to ask specific questions of the lawyer. The lawyer works for you, the client, and should be open to any reasonable inquiries that you may have.


What is civil law?

Civil law involves a lawsuit between two or more individuals, businesses or government agencies. Judgments in civil cases usually involve monetary awards from one party to another. These judgments do not involve criminal sentencing.

Who assumes the burden of proof in civil law cases?

In civil law cases the plaintiff assumes the burden of proof. There are, however, instances in which the burden shifts to the defendant. If the plaintiff has a prima facie case, that is a case in which the plaintiff has sufficient evidence to establish a fact, then the defendant is required to refute or disprove the plaintiffs evidence.

How do I file a civil case?

A civil action is commenced by the filing of a complaint. Parties instituting a civil action in a district court are required to pay a filing fee pursuant to Title 28, U.S. Code, Section 1914. The current fee is $250. Complaints may be accompanied by an application to proceed in forma pauperis, meaning that the plaintiff is incapable of paying the filing fee.

How can I check on the status of my case?

Your lawyer is your best resource. Generally, all documents filed with a court are public records and are available through the clerk’s office. By way of exception, some documents are sealed by special court order, and some documents are confidential by operation of law, such as grand jury materials and criminal files relating to juveniles.

How are judges assigned to cases?

Judge assignment methods vary. The basic considerations in making assignments are to assure equitable distribution of caseload and avoid judge shopping. By statute, the chief judge of each district court has the responsibility to enforce the court’s rules and orders on case assignments. Each court has a written plan or system for assigning cases. The majority of courts use some variation of a random drawing. One simple method is to rotate the names of available judges. At times judges having special expertise can be assigned cases by type, such as complex criminal cases, asbestos-related cases, or prisoner cases. The benefit of this system is that it takes advantage of the expertise developed by judges in certain areas. Sometimes cases may be assigned based on geographical considerations. For example, in a large geographical area it may be best to assign a case to a judge located at the site where the case was filed. Courts also have a system to check if there is any conflict that would make it improper for a judge to preside over a particular case.

What are the United States District Courts?

The United States district courts are the trial courts of the federal court system. Within limits set by Congress and the Constitution, the district courts have jurisdiction to hear nearly all categories of federal cases, including both civil and criminal matters. There are 94 federal judicial districts, including at least one district in each state, the District of Columbia and Puerto Rico. Three territories of the United States; the Virgin Islands, Guam, and the Northern Mariana Islands have district courts that hear federal cases, including bankruptcy cases.

What is a class action lawsuit?

Class action lawsuits allow plaintiffs, whose injuries might not be worth enough to justify bringing individual suits, to combine their damages into one lawsuit against a common defendant. Class action lawsuits can facilitate the fair and efficient resolution of legitimate claims of numerous parties. For those reasons, federal and state courts’ rules of civil procedure enable litigants to proceed on a class basis in appropriate cases.

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