bankruptcy

Bankruptcy & Immigration Status

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Recently a few different people have asked me how a potential bankruptcy case could affect their immigration status.


According to bankruptcy law, the government is prohibited from discriminating against someone solely based on their filing for bankruptcy, as stated in 11 U.S.C. § 525(a). However, it is important to note that there could be consequences in an immigration case if it is discovered that false information was provided or if relevant details were omitted on the bankruptcy paperwork.


It is crucial to be honest and transparent throughout the bankruptcy process, ensuring that all required information is accurately disclosed. Failure to do so may lead to denial of the bankruptcy discharge,
criminal repercussions, and complications in an immigration case, as it could be perceived as a misrepresentation or an attempt to conceal relevant financial information.


If you are considering bankruptcy and have concerns about its potential impact on your green card or immigration status, I strongly recommend consulting with an experienced immigration attorney. They will be able to provide you with personalized guidance based on your specific circumstances and help you navigate through any potential challenges.


Should you have any further questions about bankruptcy or dealing with your creditors, please do not hesitate to reach out. Our office specializes in bankruptcy to assist you. For more information go to ravosalaw.com.

This is only intended to be information and does not constitute legal advice, nor does it create any attorney-client relationship with the firm.



Bankruptcy & Credit Scores

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I wanted to address a common misconception regarding bankruptcy and its impact on credit scores. Many clients believe that a bankruptcy filing will ruin their credit for the 7 to 10 years it remains on their credit report. However, I would like to assure you that this is simply not the case.

In fact, for individuals who need to file for bankruptcy and have a low credit score prior to filing, they often actually experience an improvement in their credit score after the filing. This is because the bankruptcy stops any further negative reporting from delinquent accounts.

However, it is important to note that improving your credit score further after bankruptcy will require some effort. It will involve implementing responsible financial habits, such as making timely payments, keeping credit utilization low, and gradually rebuilding your credit history.

If you are considering bankruptcy and have concerns about your credit, I would be more than happy to provide guidance. Please feel free to reach out to one of our bankruptcy attorneys at your convenience. You can contact us through ravosalaw.com, or call us at 508-655-3013.

What to Know: Fraud, Bankruptcy, and Supreme Court Ruling

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A 2023 ruling by the Supreme Court that may have implications for Americans facing bankruptcy. 

On Wednesday, February 22, 2023, the Supreme Court unanimously ruled that a California woman, Kate Bartenwerfer, could not use the U.S. bankruptcy code to avoid paying a $1.1 million debt resulting from her partner’s fraud. The original judgment in 2012 was $200,000, but a decade of interest caused the amount to balloon. The court held that Bartenwerfer owed the debt even though she was not aware her husband had falsified statements about the condition of their house when they sold it for more than $2 million to a San Francisco developer.

Interestingly, the ruling cited a Supreme Court decision in 1885 that two partners in a New York wool company were liable for debt due to fraudulent claims of a third partner even though they were not themselves guilty of wrongdoing.

This ruling establishes that a person who acted together in a partnership can be held responsible for debt resulting from fraud committed by a partner or third party, even if the person was unaware of the fraud being committed. It also highlights the importance of carefully reviewing and disclosing pertinent information when buying or selling property to avoid potential legal and financial consequences. It is important to note, that although the parties were married, the Court focused on their business partnership in its analysis.

With that brief overview noted, if you’d like to discuss this or other bankruptcy-related matters further, please feel free to reach out.

The Role of the Trustee in Chapter 13 Bankruptcy

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If you’ve read a little about chapter 13 bankruptcy, you may have heard about the trustee. But what is the trustee’s role in a chapter 13?

Bankruptcy can be a challenging and overwhelming process for individuals facing financial difficulties. However, Chapter 13 bankruptcy offers a structured and viable solution to reorganize debts and regain financial stability. At the heart of this process is the trustee.

Chapter 13 bankruptcy allows debtors to develop a repayment plan spanning three to five years, which enables filers to retain their assets while working towards repaying their debts in a structured manner.

Upon filing for Chapter 13 bankruptcy, a trustee is appointed to oversee the case. One of the primary responsibilities of the trustee is to review the debtor’s proposed repayment plan. This entails scrutinizing the plan’s feasibility, ensuring it adheres to legal guidelines, and determining whether it offers fair treatment to creditors. The trustee examines the debtor’s income, expenses, and debt obligations to assess the plan’s viability and whether it meets the “best interests of the creditors” test.

Once the plan is approved by the court, the trustee assumes the crucial responsibility of collecting payments from the debtor. Debtors make regular payments to the trustee, who then distributes the funds to creditors according to the terms of the approved plan. This system streamlines the payment process, ensuring that creditors receive their designated share of the debtor’s disposable income. The Trustee also has a duty to uphold the principles of fairness and transparency, to ensure the credibility of the bankruptcy process is maintained.

If you have any questions about how a chapter 13 bankruptcy works, or if you think you may benefit from a bankruptcy, reach out to our office today.

Timeline of Chapter 7 Bankruptcy

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Chapter 7 bankruptcy is a type of bankruptcy that allows individuals or businesses to discharge their debts and start fresh. If you are considering filing for Chapter 7 bankruptcy, it is important to understand the timeline of the bankruptcy process. Here is a general timeline of a Chapter 7 bankruptcy case:

  1. Pre-Bankruptcy Counseling: Before filing for bankruptcy, you must complete credit counseling from an approved agency within 180 days of filing.
  2. Filing the Petition: To start the bankruptcy process, you must file a petition with the bankruptcy court. This document includes information about your income, expenses, assets, and debts. You will also need to pay a filing fee.
  3. Automatic Stay: Once the petition is filed, an automatic stay goes into effect, which stops most creditors from attempting to collect debts from you.
  4. Appointment of Trustee: After the petition is filed, a bankruptcy trustee will be appointed to your case. The trustee’s role is to review your petition, gather information about your assets and debts, and determine if any assets can be sold to pay your creditors.
  5. Meeting of Creditors: Within 20 to 40 days of filing your petition, you will be required to attend a meeting of creditors. The trustee and your creditors may attend this meeting and ask you questions about your financial situation.
  6. Liquidation of Assets: If you have non-exempt assets, the trustee may liquidate them to pay your creditors. Exempt assets are typically protected from liquidation. Most typical assets, such as your house and car, will be protected.
  7. Discharge: If there are no objections from your creditors and the trustee, you may receive a discharge of your debts within 60 to 90 days of the meeting of creditors. This means that your debts are eliminated, and you are no longer responsible for paying them.
  8. Close of the Case: Once the discharge is granted, the case will be closed, and the bankruptcy process will be complete.

It is important to note that the timeline of a Chapter 7 bankruptcy case can vary depending on the specifics of your case. Working with an experienced bankruptcy attorney can help ensure that your case is handled efficiently and effectively.

If you have questions about how bankruptcy works, and if this may be the solution for tackling your debt, contact our office to speak with an attorney today.

The Benefits of Chapter 7 Bankruptcy

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Filing for bankruptcy can be a difficult decision, but in some cases, it may be the best option. Chapter 7 bankruptcy, in particular, offers several benefits for those facing financial distress. In this blog post, we’ll explore the advantages of Chapter 7 bankruptcy and how it can help individuals regain control of their financial situation.

1. Elimination of Unsecured Debts

One of the main benefits of Chapter 7 bankruptcy is the elimination of unsecured debts. Unsecured debts include credit card balances, medical bills, and personal loans. By discharging these debts, individuals can start fresh and rebuild their financial foundation.

2. Quick Process

Chapter 7 bankruptcy is generally a faster process compared to other forms of bankruptcy. In most cases, the entire process can be completed within 3-6 months. This allows individuals to move forward quickly and focus on rebuilding their financial future.

3. No Repayment Plan

Unlike Chapter 13 bankruptcy, which requires a repayment plan, Chapter 7 bankruptcy does not involve a repayment plan. This means that individuals are not required to make monthly payments to their creditors, providing immediate relief from financial stress.

4. Protection from Creditors

During the Chapter 7 bankruptcy process, an automatic stay is put in place. This prevents creditors from taking collection actions, such as wage garnishment or repossession of property. This protection allows individuals to focus on their bankruptcy case without the constant pressure from creditors.

5. Retain Exempt Property

In Chapter 7 bankruptcy, individuals may be able to keep certain exempt property. Exemptions vary by state, but generally include items such as a primary residence, vehicle, and personal belongings. This allows individuals to maintain a basic standard of living while working towards financial recovery.

6. Improved Credit Score

Although filing for bankruptcy may initially lower an individual’s credit score, the elimination of debt can lead to an improved credit score over time. By discharging unsecured debts and making responsible financial decisions, individuals can work towards rebuilding their credit.

In conclusion, Chapter 7 bankruptcy offers several benefits for those facing financial hardship. By eliminating unsecured debts, providing a quick resolution, and offering protection from creditors, Chapter 7 bankruptcy can be a valuable tool for individuals seeking a fresh start. As with any financial decision, it’s important to consult with a qualified professional to determine if Chapter 7 bankruptcy is the right choice for your specific situation.

If you think you may benefit from a chapter 7 bankruptcy, our office can help contact us today.

Does My Bankruptcy Mean the IRS Will Audit Me?

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Recently, I’ve had a few clients ask if their ongoing bankruptcy case means they are likely to be audited by the IRS next tax season. The good news is that the IRS doesn’t require people who have filed for bankruptcy to be audited as a matter of routine. 

That said, it doesn’t mean it isn’t possible. Bankruptcy proceedings can protect you from some of the consequences of an audit, but they cannot protect you from the audit itself. 

IRS audits are rare, especially in bankruptcy cases. In 2018, only 2070 out of 700,000 bankruptcy cases were selected for auditing. But what happens if you’re one of the few who’s chosen? Here’s what you need to know:

  • During a bankruptcy audit, the debtor is required to hand over documents like pay stubs, tax returns and bank statements. The auditor then compares the documents to the information declared in the bankruptcy paperwork, while also conducting outside research on the debtor. A final report is filed with the court that identifies any misleading or false information.
  • If the court determines that you’ve lied or intentionally hid assets, there could be serious civil and criminal consequences. These might include dismissing your bankruptcy case, denying the discharge of your debts, or even jail time for egregious cases.
  • If the IRS determines that you owe them money at the end of the audit, you might be spared if you’ve filed for bankruptcy. That’s because under the bankruptcy code debtors are protected from creditors, including the IRS and the government, though you may still owe the money after your bankruptcy case is over – some tax debt survives the bankruptcy discharge.

If you’ve filed for bankruptcy and are concerned about the possibility of an audit, call me and let’s chat. The best course of action is always to be prepared–and I’m committed to helping you navigate any situation with confidence and clarity.

Most Common Bankruptcies

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A lot of people I speak to tell me all the time that bankruptcy is not for them. This is often due to the numerous misconceptions about bankruptcy that you hear about, on tv, from your family, or on social media. Media and your friends may tell you that bankruptcy will ruin your credit or make it impossible to own a home, but this is not true. For those that need it, bankruptcy is a legal tool that can help someone improve credit, recover from financial hardships, and work towards improving financial health so goals like home ownership can be attained.

The other frequent misconception I hear, is that bankruptcy is just for those with businesses, or with valuable assets that need to be protected. In truth, there are bankruptcy options for the average person.

Here are the two common bankruptcy types for the average person:

Chapter 7 Bankruptcy 

Chapter 7 bankruptcy is the most common way to get out of debt because it’s fast and simple. In this case, the entire reason for filing is obtaining a discharge, which is a court order that states you are no longer responsible for most debts. Dischargeable debt includes credit cards, medical bills, loans, and the vast majority of an individual’s debt.

In this chapter, the filer must disclose all of their assets, such as a house, car, furniture, etc. along with their values. The assets can be protected with available exemptions, but if something cannot be fully protected, that item can be sold or liquidated, with the proceeds going towards the debts owed. Luckily, for most chapter 7 filers, everything can be fully protected when done right. It’s best to hire an attorney to ensure the proper exemptions are used.

A typical Chapter 7 case, in which all assets are fully protected, will take about 3.5 to 4 months from filing to the case being closed with a discharge.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is used by individuals who make too much money and do not qualify for Chapter 7, and by individuals who need to catch up on repaying a debt, such as a mortgage.

The Chapter 13 Filer will propose a payment plan based on a number of factors, including their household budget, to pay a percentage of their debt over three to five years. After all payments have been made under this plan term, most remaining debt will be discharged. For example, someone could propose a plan that pays 10% of their debt. If they owed $100,000, they would only need to pay a total of $10,000, and once all payments have been completed, they can discharge the remaining $90,000.

Most commonly, Chapter 13 is used to catch up on mortgage payments to prevent foreclosure. If you’re one year behind on your mortgage for instance, the mortgage company can institute foreclosure proceedings under the terms of the mortgage and Massachusetts law. However, if the person files a Chapter 13 bankruptcy, they can propose a payment plan that allows them to pay back the arrears, while maintaining their current mortgage payments, so at the end of the plan term they are current on the mortgage. Or Chapter 13 can be used to provide sufficient time to sell the house and obtain the equity, so it’s not lost in a foreclosure sale.

There are a lot of factors that must be considered in a chapter 13 bankruptcy. So, it is very important that anyone considering bankruptcy hire an attorney to ensure the case goes smoothly and accomplishes what you need.

If you have any questions about the different Chapters or are wondering if maybe one of these Chapters would help you, call our office today. You can speak with an attorney right away, by calling us at 508-655-3013.

Benefits of Chapter 13 Bankruptcy

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There are numerous benefits to filing chapter 13 bankruptcy. Every situation is different, and there may be positive consequences to filing that you’re not aware of.

One of the most helpful benefits is that, in some cases, a Chapter 13 order can discharge a second mortgage on your home. This is called a “strip off.” Whether you can take advantage of it or not depends on several factors, including the fair market value of your house and how much you owe the first mortgage holder.

If you have student loans or income taxes owed, a Chapter 13 can stop collection enforcement and the accumulation of interest on past-due amounts for tax liabilities, as well as give you protection from your creditors because any payments made to them will be subject to court oversight. 

Another benefit of a Chapter 13 is that it protects co-signers on your accounts because co-signers receive the same bankruptcy court protection that you do, even though they are not filing bankruptcy. This is true when only one spouse files bankruptcy and the other spouse, who is a co-signer, is also granted bankruptcy court protection, even though the non-filing spouse did not file bankruptcy.

One of the greatest benefits of a chapter 13 bankruptcy is the peace of mind you will have knowing that all of your financial obligations and creditors are being dealt with in a professional, court supervised manner. To fully understand what benefits may be available for you, it is best to consult with an experienced bankruptcy attorney. 

Contact us at 508-655-3013 or through our website at ravosalaw.com to schedule a consult today.