All over the country and right here in Memphis, Tennessee, Chapter 13 bankruptcy filings are difficult for people to complete. There is a substantial amount of paperwork required for the filing, often paperwork that the debtor may not be able to find.
Recently, Arkansas football coach John Smith filed for bankruptcy. That process has been delayed however, as the creditors and bankruptcy trustees have asked Smith for more records. The creditor is concerned that Smith is attempting to hide some -- or perhaps all -- of his salary. Creditors think that Smith has arranged for his salary to be paid at a later date to avoid having to pay more money to his creditors. However, the court has the ability to halt the proceedings so the trustee and the creditors can investigate any possible fraud that may have occurred.
As a general matter, debtors usually can keep money that they earn after they file for bankruptcy. Any money earned before the bankruptcy, in contrast, is subject to be divided among the creditors.
Bankruptcy can provide the debtor with the opportunity to get a fresh start. Through bankruptcy, the debtor is given the opportunity to work with their creditors to come up with a payment plan. Also, certain debts that the debtor may owe are discharged. It is important to remember that college loan debt is not usually discharged in bankruptcy.
Filing for bankruptcy can be a very difficult process. It requires a lot of information and paperwork from the debtor. The debtor will often have to provide many copies of various documentation. It may be difficult for some people to gather all the necessary documentation, but an experienced bankruptcy attorney can help to guide the debtor through the process.
An attorney can also assist a consumer with bankruptcy and assessing all their options. They can help to guide the debtor through the process and finding documentation.
Source: Detroit Free Press, "Arkansas coach's bankruptcy case turns contentious," Brent Schrotenboer, Nov. 14, 2012