Questions about debts or bankruptcy? Call Doug Beaton, a local specialist in American bankruptcy law.

After assembling your paperwork and then meeting with an attorney comes the day that most debtors are most eager to see arrive — the actual filing of the case with the United States Bankruptcy Court.

The date of filing has a lot of significance for debtors, not the least of which is the start of an “automatic stay” coinciding with the case. True to its name, this is generated automatically with the start of the case without the need for any special intervention by judges, attorneys, or clerks, and serves as a general court order prohibiting creditors from making any more collection efforts on the debts at issue. The stay also stops most collection lawsuits from proceeding in the Massachusetts or New Hampshire court systems.

Since the early 2000’s the bankruptcy court system gone paperless, using an electronic filing system under the government acronym CM/ECF. This means that there are no actual papers filed anymore!

What your attorney sends to the court instead amounts to several computer files. The first is a coded summary of the case that is only readable by a computer system. Another is a simple listing of the names and addresses of your creditors, called the “matrix.” the court will use this file to notify the creditors of your case, which will inform them of the automatic stay and get them to stop calling you.

Typically the largest file sent to the court is the petition itself, along with all the required schedules and forms associated with it. This is filed in human readable form, specifically in Adobe Corp’s PDF format. This file may be easily printed out by a trustee or judge if they desire to. A typical Chapter 7 case will be at least 40 pages long in the PDF format, so you see why the court is so glad to be “paperless!”

In a chapter 13 case, the debtor’s plan for bailing themselves out is also filed in PDF format, either at the same time as the petition or shortly afterwards.

In our security conscious society, publicizing social security numbers is a sensitive issue. How it is handled is specific to where you live. In Massachusetts, the bankruptcy court receives an electronically-filed “Statement of Social Security Number” for each debtor, but uses its computer system to hide this filing from the general public. The United States Bankruptcy Court for the District of New Hampshire, however, requires attorneys to file their clients’ social security numbers on a form through the U. S. mail, and then the court clerk enters them privately. So it is not quite a completely paperless filing for New Hampshire debtors!

The same is true for “signing” your bankruptcy petition. Only one page actually gets signed with a pen anymore; In Massachusetts, this page is scanned and submitted as a PDF file; in New Hampshire the debtors must sign in ink the mail-in social security form mentioned above.

By Doug Beaton

I always get a kick out of debtors who go on legal advice sites and ask attorneys whether they should handle their own bankruptcy case.

We lawyers are all in the same union, so the answer is invariably some version of “NO” although the reasoning and justification may change between different attorneys.

Still, bankruptcy debtors are by definition in a tough financial bind, and the opportunity to bypass paying a substantial attorney’s fee for some will prove irresistible.

The plain truth is that there are undoubtably some debtors out there who have cases simple enough to consider filing by themselves, as well as the skills and temperment to do so. Do you think you may fall in to that category?

The first thing I look over when a potential new client comes in to my office is their tax return. I always check to see if the return was prepared by H&R Block, Joe the CPA, or the like. That’s my “tell” to see if the client could possibly pull off a “pro-se” bankruptcy without damaging his sanity or wallet. If someone is going to H&R Block to have a 1040EZ tax form filled out, I would venture there is virtually no chance that the same person could get through all of the bankruptcy forms correctly without driving themselves crazy.

Think about it for a minute. Taxes are filled out on government issued forms, and cover the taxpayer’s income, along with certain specified deductions which may be subtracted.

Bankruptcy cases are also filled out on government issued forms and require income to be declared and calculated in specified ways. But with bankruptcy, that is just the beginning. There are a blizzard of additional forms requiring listing of assets, as well as debts, and monthly expenditures as well. The amount of form-filling exceeds the typical tax return by a factor of four in most every case.

So, if you are hiring someone to do you taxes, it is almost certain that hiring someone to do your bankruptcy will be money well spent. The purpose of filing a bankruptcy case is to return to a level of peaceful normal living; most folks will find driving themselves crazy with forms trying to get there is a form of false economy.

By Doug Beaton

Most people are at least a little bit afraid of something they haven’t done before. That’s natural. If that something is going in to bankruptcy, no one should blame them for being somewhat apprehensive, even if it turns out there is no real reason to be.

But consumers need to realize there are people out there with a vested interest in promoting an unnatural fear of the bankruptcy process. Creditors, to be sure, but also credit reporting companies, and the debt-settlement scammers. They want you to think that filing bankruptcy is the end of life as we know it.  They all profit if consumers are scared off of filing bankruptcy.

The plain truth, though, is that bankruptcy is not painful, or at least, any pain is self inflicted.  You can make yourself (or allow yourself) to feel as miserable and worthless as you choose to do so.  No one associated with the courts, including trustees, is judgmental.  A debtor does not have to justify his choice of bankruptcy relief and does not have to prove he is “worthy” of a discharge.  Eligibility for a discharge, even after bankruptcy reform, is presumed.

For most people facing serious financial hardship, bankruptcy is an honest and effective choice.   There is nothing to be afraid of. And that’s just the way it is, as plain as anyone can put it .

By Doug Beaton

One of the biggest mistakes that people in financial trouble make is to be too focused on their credit score and how bad it is (or how bad it will be if they don’t settle with that collection agency right now).

Years ago there were no credit scores. And then for a while there were, but no one really knew about them. Because no one knew about them, no one really worried about them either.

But gradually word got around, and now in 2010, every breathing American seems to check his or her credit report and can tell you their credit score more readily than the Red Sox score.

The big financial companies feed into this, and calculate a fear of a bad score into the general population of consumers. Before long people have the idea that one’s life and worth is wrapped up in that credit score, which is something we don’t fully understand, and based on credit reports which are notoriously inaccurate. Life will end, we’re told, if our credit score declines.

That fear keeps American consumers struggling to pay debt that they can never, in this life or the next, repay. They appear to consider a lifetime of minimum payments rather than a fresh start in bankruptcy to preserve their credit score.

And that is a shame, because in most cases, a fresh start with bankruptcy is far superior to a life of shame and fear spent worrying about some nebulous score.

Bankruptcy is all about fixing your balance sheet so you can start over. Then you can get rid of dischargeable debts. Save for retirement. Live beneath your means.

Decide to give yourself a debt-free future. Don’t walk the financial tightrope!

By Doug Beaton