Disclosures

Disclosure Pursuant to 11 USC 527(b)
IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES
FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER
If you decide to seek bankruptcy relief, you can represent yourself, you can hire an
attorney to represent you, or you can get help in some localities from a bankruptcy
petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR
BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT
SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER
WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract
before you hire anyone.
The following information helps you understand what must be done in a routine
bankruptcy case so you can evaluate how much service you need. Although bankruptcy
can be complex, many cases are routine.
Before filing a bankruptcy case, either you or your attorney should analyze your
eligibility for different forms of debt relief available under the Bankruptcy Code and
which form of relief is most likely to be beneficial for you. Be sure you understand the
relief you can obtain and its limitations. To file a bankruptcy case, documents called
Petition, Schedules, and Statement of Financial Affairs, as well as in some cases
Statement of Intention, need to be prepared correctly and filed with the bankruptcy court.
You will have to pay a filing fee to the bankruptcy court. Once your case starts, you will
have to attend the required first meeting of the creditors where you may be questioned by
a court official called a trustee and by creditors.
If you choose to file a Chapter 7 case, you may be asked by a creditor to reaffirm a debt.
You may want help deciding whether to do so. A creditor is not permitted to coerce you
into reaffirming your debts.
If you choose to file a Chapter 13 case in which you repay your creditors what you can
afford over three to five years, you may also want help with preparing your Chapter 13
plan and with the confirmation hearing on your plan, which will be before a bankruptcy
judge.
If you select a type of relief under the Bankruptcy Code other than Chapter 7 or Chapter
13, you will want to find out what should be done from someone familiar with that type
of relief.
Your bankruptcy case may also involve litigation. You are generally permitted to
represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy
petition preparers, can give you legal advice.
Required Disclosure Pursuant to 11 USC 341 STATEMENT OF INFORMATION REQUIRED BY 11 USC 341
Introduction
Pursuant to the Bankruptcy Reform Act of 1994, the Office of the United States Trustee,
United States Department of Justice, has prepared this information sheet to help you
understand some of the possible consequences of filing a bankruptcy petition under
Chapter 7 of the Bankruptcy Code. This information is intended to make you aware of
1. the potential consequences of seeking a discharge in bankruptcy, including the
effects on credit history;
2. the effect of receiving a discharge of debts;
3. the effect of reaffirming a debt; and
4. your ability to file a petition under a different chapter of the Bankruptcy Code.
There are many other provisions of the Bankruptcy Code that may affect your situation.
This information sheet contains only general principles of law and is not a substitute for
legal advice. If you have questions or need further information as to how the bankruptcy
laws apply to your specific case, you should consult with your lawyer.
What Is a Discharge?
The filing of a Chapter 7 petition is designed to result in a discharge of most of the debts
you listed on your bankruptcy schedules. A discharge is a court order that says you do
not have to repay your debts, but there are a number of exceptions. Debts which may not
be discharged in your Chapter 7 case include, for example, most taxes, child support,
alimony, and student loans; court-ordered fines and restitution; debts obtained through
fraud or deception; and personal injury debts caused by driving while intoxicated or
taking drugs. Your discharge may be denied entirely if you, for example, destroy or
conceal property; destroy, conceal, or falsify records; or make a false oath. Creditors
cannot ask you to pay any debts which have been discharged. You can only receive a
Chapter 7 discharge once every eight years.
What Are the Potential Effects of a Discharge?
The fact that you filed bankruptcy will appear on your credit report for as long as 10
years. You will not be able to file bankruptcy again for 8 years. Thus, filing a bankruptcy
petition may affect your ability to obtain credit in the near future. Most creditors will
extend credit, even for a house, after 2 years. Also, you may not be excused from
repaying any debts that were not listed on your bankruptcy schedules or that you incurred
after you filed for bankruptcy. What Are the Effects of Reaffirming a Debt?
After you file your petition, a creditor may ask you to reaffirm a certain debt or you may
seek to do so on your own. Reaffirming a debt means that you sign and file with the court
a legally enforceable document, which states that you promise to repay all or a portion of
the debt that may otherwise have been discharged in your bankruptcy case. Reaffirmation
agreements must generally be filed with the court within 60 days after the first meeting of
the creditors.

Reaffirmation agreements are strictly voluntary—they are not required by the Bankruptcy
Code or other state or federal law. You can voluntarily repay any debt instead of signing
a reaffirmation agreement, but there may be valid reasons for wanting to reaffirm a
particular debt.

Reaffirmation agreements must not impose an undue burden on you or your dependents
and must be in your best interest. If you decide to sign a reaffirmation agreement, you
may cancel it at any time before the court issues your discharge order or within 60 days
after the reaffirmation agreement was filed with the court, whichever is later. If you
reaffirm a debt and fail to make the payments required in the reaffirmation agreement, the
creditor can take action against you to recover any property that was given as security for
the loan and you may remain personally liable for any remaining debt.

Other Bankruptcy Options
You have a choice in deciding what chapter of the Bankruptcy Code will best suit your
needs. Even if you have already filed for relief under Chapter 7, you may be eligible to
convert your case to a different chapter.

Chapter 7 is the liquidation chapter of the Bankruptcy Code. Under Chapter 7, a trustee is
appointed to collect and sell, if economically feasible, all property you own that is not
exempt from these actions.

Chapter 11 is the reorganization chapter most commonly used by businesses, but it is also
available to individuals. Creditors vote on whether to accept or reject a plan, which also
must be approved by the court. While the debtor normally remains in control of the
assets, the court can order the appointment of a trustee to take possession and control of
the business.

Chapter 12 offers bankruptcy relief to those who qualify as family farmers. Family
farmers must propose a plan to repay their creditors over a three-to-five year period and it
must be approved by the court. Plan payments are made through a Chapter 12 trustee,
who also monitors the debtor’s farming operations during the pendency of the plan.

Finally, Chapter 13 generally permits individuals to keep their property by repaying
creditors out of their future income. Each Chapter 13 debtor writes a plan, which must be
approved by the bankruptcy court. The debtor must pay the Chapter 13 Trustee the amounts set forth in the plan. Debtors receive a discharge after they complete their

Chapter 13 repayment plan. Chapter 13 is only available to individuals with regular
income whose debts do not exceed $1,000,000 ($250,000 in unsecured debts and
$750,000 in secured debts).

Again, please speak to your lawyer if you need further information or explanation,
including how the bankruptcy laws relate to your specific case.
Required Disclosure Pursuant to 11 USC 527(a)(2)

You are notified:
• All information that you are required to provide with a petition and thereafter during
a case under the Bankruptcy Code is required to be complete, accurate, and truthful.
• All assets and all liabilities are required to be completely and accurately disclosed in
the documents filed to commence the case. Some places in the Bankruptcy Code
require that you list the replacement value of each asset. This must be the
replacement value of the property at the date of filing the petition, without
deducting for costs of sale or marketing, established after a reasonable inquiry. For
property acquired for personal, family, or household use, replacement value means
the price a retail merchant would charge for property of that kind, considering the
age and condition of the property.
• The following information, which appears on Official Form 22, Statement of
Current Monthly Income, is required to be stated after reasonable inquiry: current
monthly income, the amounts specified in section 707(b)(2), and, in a case under
Chapter 13 of the Bankruptcy Code, disposable income (determined in accordance
with section 707(b)(2)).
• Information that you provide during your case may be audited pursuant to
provisions of the Bankruptcy Code. Failure to provide such information may result
in dismissal of the case under this title or other sanctions, including criminal
sanctions.