Bankruptcy Law


Call 802-482-2905 for a free consultation.

Kohn Rath Danon Lynch & Scharf, LLP- Bankruptcy Lawyers with more than 150 years of experience helping Vermont residents with their complicated bankruptcy needs. We can help you too. 

If you are struggling to pay your bills and feel stress from the creditors constantly calling, letters, and threats of lawsuits, you can find relief and an economic fresh start. Give David Lynch a call at the law offices of Kohn Rath Danon Lynch & Scharf, LLP. We can help you sort through the complicated problems you are having and show you a way out of the difficult financial situation that you have found yourself in.

We can stop foreclosures, lawsuits, wage garnishments, bank account seizures, and help you save your home. Bankruptcy laws provide you with a financial fresh start. Let our skilled and experienced bankruptcy lawyers help you through this complex process.

Call David Lynch at Kohn Rath Danon Lynch & Scharf, LLP, for a free consultation today. During the consultation, we will help you understand all of your legal options and explain associated costs. There is no fee for the initial consultation. Should you decide to not retain us, you are under no obligation whatsoever to proceed with us.

First Steps When Contemplating Bankruptcy in Vermont

Most people who come to us, need to file bankruptcy and elect to hire us to become their lawyers. They provide us with a small down payment–a retainer–which allows them to immediately refer all creditor phone calls to us. If you can’t afford to retain us immediately, you can always come back at another time to do so.

This referral of your creditors to us usually stops most calls within a day or two, giving you breathing room to prepare your case without unnecessary pressure from creditors. Also, if creditors are planning to sue you, they often stop when they hear our name because they don’t want to waste money on more lawyer fees for them if we are planning to cancel the debt in bankruptcy anyway. When our services are retained, everything tends to calm down. We’ve helped thousands of Vermont families and we can help you too. Call Kohn Rath Danon Lynch & Scharf, LLP today to schedule your free consultation.

“The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”  ANATOLE FRANCE (1844-1924)

Vermont Bankruptcy In Depth

For consumers, there are typically two types of bankruptcy options to consider, Chapter 7 (referred to as liquidation bankruptcy) and Chapter 13 (referred to as reorganization bankruptcy). There are two types of discharges issued depending on what type of case you file. Both discharges appear on your credit report, the Chapter 7 discharge stays on the credit report for ten years, the Chapter 13 discharge for seven years. The Chapter 7 discharge bars you from getting another Chapter 7 discharge for eight years and Chapter 13 for four years. The Chapter 13 discharge has a four-year bar for subsequent Chapter 7 filings and a two-year bar for subsequent Chapter 13 filings.

Before you file your bankruptcy case, you must obtain a certificate of credit counseling from an approved counselor for Vermont. There are numerous providers online. Here is a link to the US Trustee’s site showing approved credit counselors. The fee for this service is nominal.

The attorneys at Kohn Rath Danon Lynch & Scharf, LLP have worked with the following two providers and their fees are reasonable:

  • bothcourses.com
  • decafnow.com

The Credit Counseling Requirement

With few exceptions, a Debtor must obtain credit counseling from an approved provider for the district in which the Debtor resides. Credit counseling is typically a one-half hour session and may also be provided online, by telephone, or in-person. Provider charge fees range from $24.00 to $50.00 for these services. Here is a link to the approved credit counselors for the State of Vermont.

Types of Bankruptcy in Vermont

There are four types of bankruptcy available for Vermonters in need of bankruptcy.

  • Chapter 7 Bankruptcy is a liquidation of assets (if any and typically no assets are liquidated).
  • Chapter 13 Bankruptcy is for consumer reorganization.
  • Chapter 11 Bankruptcy is primarily for big businesses or consumers where Chapter 13 limits will not allow the use of Chapter 13.
  • Chapter 12 is for individuals who make most of their money from farming.

Chapter 7 Bankruptcy

The most common type cases filed in bankruptcy are under Chapter 7 and Chapter 13. In Vermont, the vast majority of cases are filed in Chapter 7. Chapter 7 is a process where the debtor voluntarily submits all of his assets to the jurisdiction of the court, and typically keeps all assets as exempt and asks for a fresh start which is granted by the court in an order called a discharge. Read More…

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is usually referred to as a consumer reorganization and involves the payment of the consumer’s debt into a reorganization plan for a period of time not less than three years and not greater than five years. In Chapter 13 you can stop a mortgage foreclosure or a repossession if you can present a plan that will repay any arrears at the time of the filing of your petition in bankruptcy. Read More…

Discharging Taxes

Income tax debt is dischargeable if it meets the following criteria:

  • The debtor filed a tax return more than three years prior to the date of filing their petition in bankruptcy;
  • The tax has not been “assessed” by the IRS within the last 240 days; and
  • The tax return was not fraudulent. The taxpayer is not guilty of tax evasion.

If taxes do not meet these criteria they are considered priority debts in bankruptcy.

Discharging Student Loans

As a general rule, student loans are not dischargeable in bankruptcy. The only way you can obtain a discharge of student loans is to show undue hardship. This is generally a difficult standard to meet. A debtor must show that they have a minimal standard of living and it’s unlikely that they will improve their standard of living over time. Read More…

Discharging Taxes

Income tax debt is dischargeable if it meets certain criteria:

  • The debtor filed a tax return more than three years prior to the date of filing their petition in bankruptcy;
  • The tax has not been “assessed” by the IRS within the last 240 days; and
  • The tax return was not fraudulent. The taxpayer is not guilty of tax evasion.

If taxes do not meet these criteria they are considered priority debts in bankruptcy.

What Assets Can You Keep After Bankruptcy?

Under Vermont law, you can keep the equity in your home up to $125,000.00 in value. All property which is owned with your spouse as tenants by the entirety, in so far as there are claims of one owner against the asset, and a percentage of your earning when there is wage garnishment. Read More…

What Happens After You File Your Case?

After you file your case, and as a prerequisite to getting a discharge, you must also get a certificate of debtor education and file that with the court shortly after your case begins. You do not get a discharge without filing your certificate of debtor education.

Upon filing your petition for relief, all debt collection, including repossessions and foreclosures, are barred by order of the Federal Bankruptcy Court Automatic Stay, pending further order of that court. This protection stops the phone calls, foreclosures, and repossessions and gives you, the Debtor, a chance to address all your debts in one case. If you are opting for Chapter 13, the time will be used to reorganize your debts and save your house from foreclosure or prevent asset repossessions.

Most people file for relief under Chapter 7 of the Bankruptcy Code. In Chapter 7, most people keep all their property unless it is a non-exempt property from a collection by creditors. Most Debtors do not have any non-exempt property. If you have a debt that is secured by a home, auto or other property, you will, with a few exceptions, have to pay those debts which are secured by the property you that you want to retain. Or you may choose to surrender these properties and not pay the secured debt.

The other option is to file Chapter 13 Bankruptcy. Income eligibility rules sometimes require Debtors to file Chapter 13 Bankruptcy. Chapter 13 cases are more complex. Many people who file Chapter 13 do so in an effort to save their homes from foreclosure, to retain other secured property or, in some instances, because they are not eligible for Chapter 7 due to high earnings.

Upon filing your petition for relief, all debt collection, including repossessions and foreclosures are barred by order of the Federal Bankruptcy Court Automatic Stay, pending further order of that court. This protection stops the phone calls, foreclosures, and repossessions and gives you, the Debtor, a chance to address all your debts in one case.

Steps to Take After Bankruptcy

The desired end result of filing bankruptcy is to discharge your debts. The discharge gives you a fresh financial start by barring your creditors (with certain exceptions) from taking any action to collect the debts you had on the day you began your case. After bankruptcy, your debts should appear on your credit report as discharged in bankruptcy. The few debts which automatically survive bankruptcy are:

●       Income tax debt from the last three years

●       Family support obligations

●       Criminal fines

●       Student loans

After bankruptcy, you may find obtaining credit more difficult, but not impossible. There are strategies for rebuilding your credit. You can re-establish your credit rating by making timely payments on a credit card or other loan for at least two years after bankruptcy. You may want to obtain a secured credit card or a tracker loan with the Opportunities Credit Union.

Six months after your case is closed, you should request your credit report from all reporting agencies:

●       Equifax (800-685-1111)

●       Experian (888-397-3742)

●       Credit Bureau of VT (800-632-1765)

●       Trans Union, (800-888-4213)

You need to make sure your debts on your bankruptcy are not listed as discharged in bankruptcy. This can be done at annualcreditreport.com free of charge. If the credit report is inaccurate, it is up to you to contact the credit reporting agency, preferably in writing, and request that it correctly report the status of your discharged debts. If you dispute the accuracy of any information which the credit agency has in its file, you can ask the credit agency to reinvestigate and correct errors. If the reinvestigation does not resolve the dispute, you may submit a short statement in writing telling your side of the story. In all future reports, the credit agency must note your dispute. The credit reporting agency may need to see a copy of the bankruptcy petition and the discharge issued by the Bankruptcy Court.

In the bankruptcy process, you must report various financial and personal transactions prior to the date you commence a case. After filing your petition, the court appoints a trustee who will verify certain information in your petition and supporting documents before the discharge issues. The court sends all creditors a notice of your case, naming the trustee and stating the date for creditors to object to your right to discharge and the date of your creditor meeting.

The Role of the Trustee

In Chapter 7, the Trustee’s primary function is to review the petition and schedules as well as the documents the Debtor must provide the Trustee in addition to conducting the creditor’s meeting, identify assets that may be available to the bankruptcy estate and, if necessary, liquidate assets and administer the estate in making distributions of liquidated assets to unsecured creditors. Read More…

The Debtor Education Requirement

With few exceptions, a Debtor, after filing for bankruptcy relief, must participate in Financial Management Education in order to obtain a Discharge of debts from the Bankruptcy Court. The approved credit counselors the district in which the Debtor resides provide the Financial Management Education course. It is typically one hour and may also be provided online, by telephone, or in-person. Provider charge fees that range from $24.00 to $50.00 for these services. Here is a link to approved credit counselors for the State of Vermont.

Information About Credit Reports

Your credit report is made up of reports from the three nationwide credit reporting companies: Experian, TransUnion, and Equifax. The report contains information about where you live, how often you’re late paying bills or have ever filed for bankruptcy. Make sure the information is accurate, complete, and up-to-date because credit reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. Read More…

Reaffirmation Agreements

A Reaffirmation of a Debt requires entering into an Agreement with a Creditor which allows the Creditor’s debt to survive the Chapter 7 discharge. Reaffirmation Agreements are made in Chapter 7 Bankruptcy only. A Reaffirmation Agreement must be signed by both the Debtor and the Creditor. Reaffirmation is entering into an Agreement with a Creditor to all their debt to survive the Chapter 7 discharge. Read More…

Section 722 Exchanges

In Chapter 7, you can also, in some instances, exempt and redeem assets. This means you can force a car lender to accept the fair market value of a car as opposed to the actual loan amount. It is common for a motor vehicle to be worth several thousand dollars less than the amount of the outstanding balance of the loan. There are companies that will lend debtors in Chapter 7 money equal to the value of the collateral and give you a new loan which will be cheaper than the loan you have. These are called Section 722 Exchanges. Here are two links to 722 exchange lenders in Vermont:

The exchange must be done with a court order on the motion.

If you need assistance with a Section 722 Exchange, call the attorneys at Kohn Rath Danon Lynch & Scharf, LLP today to schedule a free consultation at (802) 482-2905.

Chapter 13 – Cramdown

A feature of a Chapter 13 plan can force a secured creditor to accept under the plan the current market value of the asset which is the creditor’s collateral. The asset cannot be the Debtor’s primary residence and if it is a vehicle loan, there may be some limits on the use of this feature. This can result in significant savings to a Debtor. The unsecured portion of the creditor’s claim is paid as an unsecured claim under the plan. A cramdown in Chapter 13 can lead to significant savings in bankruptcy.

Lien Avoidance

In both Chapter 7 and Chapter 13, you have the ability to strip liens from your property. Certain kinds of judgment liens that impair the equity in your assets can be removed by order of the bankruptcy court. A motion must be filed with the court requesting lien avoidance.

How to Rebuild Your Credit

After you are out of bankruptcy the best way to rebuild your credit is to obtain a small amount of credit and use it and pay it in full monthly. You may also benefit from paying reaffirmed debt as these payments are reported on your future credit reports. In order to rebuild credit, you must show a pattern of timely future payments.

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David Lynch, Vermont Bankruptcy and Personal Injury Attorney

David W. Lynch – Bankruptcy Lawyers in Vermont

At Kohn Rath Danon Lynch & Scharf, LLP, we help people in Vermont with consumer and business bankruptcy.  David W. Lynch is an experienced Vermont bankruptcy lawyer and a  member of the National Association of Consumer Bankruptcy Attorneys (NACBA).

Filing for bankruptcy may allow you to save your home, stop foreclosure, and stop repossessions. You may be able to keep your house and car. Bankruptcy may be your chance to get a FRESH START. Let attorney David Lynch help you resolve your debt problems and stop creditor harassment.

Attorney David W. Lynch focuses his practice on bankruptcy, personal injury, wrongful death, and worker’s compensation. David has more than 25 years of legal experience. He is a graduate of the University of Vermont and Vermont Law School, where he was awarded a Juris Doctorate, cum laude (with honors). He provides extensive knowledge and personal attention to every client. David has this to say about his the Practice Areas that he focuses on:

  • Bankruptcy – The U.S. Bankruptcy Code provides debt relief to consumers and businesses. I am a member of the National Association of Consumer Bankruptcy Attorneys and assist clients with Chapter 7, Chapter 13, Chapter 11, and Chapter 12 bankruptcy relief.
  • Personal Injury – If you or a loved one has been injured in an accident, it is important to seek advice from a personal injury attorney to ensure that your rights are protected. For over 20 years, I have provided aggressive legal representation to protect the best interests of my clients. I help people with injuries from all types of vehicle collisions, slip and fall, and premises liability claims.
  • Workers Compensation – When injured on the job, workers are entitled to worker’s compensation benefits. This provides assistance with medical bills and supplemental income during your recovery, as well as benefits to family members when an accident in the workplace results in death. I work aggressively to secure the benefits to which my clients are entitled.

If you require the services of a bankruptcy lawyer,  accident lawyer,  or workers compensation lawyer, we encourage you to consult with David or any of the other skilled lawyers with Kohn Rath Danon Lynch & Scharf, LLP.

We can provide protection from harassing creditor telephone calls, and counsel you on solutions that work for you. We know you are concerned about the cost of filing bankruptcy. We can provide a relatively inexpensive bankruptcy solution for you. David Lynch can see you at hours that are convenient for you and will put his decades of experience and expertise as a Vermont bankruptcy attorney to work for you. You can expect personalized, individual attention, and will find David friendly and easy to work with. Do not hesitate to give David a call–there is no charge for an initial consultation for consumer bankruptcy. Call the attorneys at Kohn Rath Danon Lynch & Scharf, LLP today at (802) 482-2905.


Our Attorneys:

Kohn Rath Danon Lynch & Scharf, LLP is a  Vermont law firm located in the Town of Hinesburg, providing a broad and comprehensive array of legal services to our clients.  Our attorneys have experience in many practice areas of the law.

(Click on the name of a team member for additional information)

Roger E. Kohn
Roger E. Kohn
Partner - Former President of the Chittenden County Bar Association
David Rath
David Rath
Partner
Beth A. Danon
Beth A. Danon
Partner - Former President of the Vermont Association for Justice (the Vermont Trial Lawyers Association)
David W. Lynch
David W. Lynch
Partner

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