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Peter Daigle Answers to listeners questions on Bankruptcy – October 2016 Interview

Katherine: Hello everyone. Thank you so much for joining us today on This Needs to Be Said. Our friend, attorney Peter Daigle is coming to help us with some more bankruptcy knowledge.

Hey Peter, how are you?

Peter Daigle: Hey, good Katherine. Thanks for asking. I’m looking forward to today.
Katherine: Yes. We got a few questions for you today and I’m just going to jump right into them.

The first one is can I be denied the act of filing bankruptcy? I guess, you know, I’ve said that … I’m putting this question up a little bit but can anyone be denied from filing bankruptcy?

Peter Daigle: There’s two things in bankruptcy to consider. One is the filing of the case but second is what’s call the discharge or the completion of the case. More people can file cases than receive discharge, but since you’ve asked the question filing, you can file for bankruptcy but you have to have lived in the state that you’re filing in for most of the last 6 months.

If you lived in your state for at least 90 days plus a day or the better part of six months, you would qualify to file in that state. If you hadn’t, you’d have to wait for the residency requirement or you’d have to go back to the state from which you came from.

That’s one requirement of actually filing. You also may not be able to file if you received a discharge in chapter 7 in the previous past 8 years. If you have a previous case that you’re subject to or that you were subject to, then you may not be able to file because of that.

Those are two reasons why you would not be able to file in that case. As for whether or not you can receive a discharge or not, not everybody gets a discharge. Certain types of debts are not dischargeable. For instance, student loan debt or if you had hit somebody in a motor vehicle accident while intoxicated that may not be discharged. That’s a whole other issue as to whether or not it’s discharged or not, but in terms of filing goes, as long as you’re a resident and you have not had a previous bankruptcy then you would qualify for filing it.

Katherine: Mm-hmm. Okay. Now, what is an automatic stay? What does that mean?
Peter Daigle: An automatic stay just sort of means like, stay. Nobody can take continued action towards you so if you have a lawsuit going on, the automatic stay means that it automatically stays all lawsuits and collection matters. If somebody’s trying to garnish your wages or if the IRS is trying to take your tax refund or if you’ve got any type of collection activity – even phone calls from creditors – all those types of activities are stayed, and stayed automatically as a result of the bankruptcy filing.

The bankruptcy court will send notices to all of the creditors and all those creditors will then be stayed from continuing to call you or any litigation at all.

Katherine: Mm-hmm. What is meant when the terms cash collateral is being used?
Peter Daigle: Well, cash collateral is a term used in chapter 11’s, not in consumer bankruptcies. What it means essentially is it allows the business to continue operating because they put up cash to make sure that they continue to operate.

It’s used to protect creditors but that’s for an ongoing business. It would not be for an individual.

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Katherine: It wouldn’t be for individuals? Okay, so only for businesses?
Peter Daigle: No, it would only be for businesses that try to operate they have to put up cash as collateral and make sure that they can pay for their financing to continue to operate the business.
Katherine: I see, okay. What are the binding effects of bankruptcy plans? I’m asking this question, it came to me. I have no idea what it means so I don’t even know if I’m asking that in the right tone as I’m reading it.
Peter Daigle: Well, I think what they’re referring to is a plan which is either a chapter 13 plan or a chapter 11 plan. We’ll skip over chapter 11 because those are for corporations. What a chapter 13 plan is, it’s a plan on how you’re going to get out of your debt and the debt that’s not dischargeable.

If you owe your bank a few mortgages, let’s say 6 months of payments. That’s something that would not be discharged in the bankruptcy so you’d have to come up with a plan and the plan would be, well I’m going to pay it over 3 years or over 5 years. The plan means that it’s how you’re going to repay your creditors and mainly those creditors that cannot be discharged.

The plan is sent to all the creditors and they have an opportunity to object to the plan and then as long as there’s no objections then the judge would sign off and say okay that plan’s good. Meaning that you can pay the bank over a certain time. You can pay the IRS over a certain time. You can pay your ex-wife or child support over a certain period of time. That plan allows you to work your way out of your debt. That’s what they mean by a plan.

Katherine: Okay. What is meant by a non-debtor guarantor?
Peter Daigle: What a non-debtor guarantor basically is, is a cosigner. If you can’t get a car loan and you go to your mom and say mom will you cosign my car loan. Non-debtor means not in bankruptcy. Debtor is a term for bankruptcy in the world of bankruptcy, so non-debtor, is a guarantor, which is basically a cosigner.

What happens is that the non-debtor guarantor still has to pay. If the person who files the bankruptcy as a cosigner, the cosigner’s stuck basically, is what that means.

Katherine: Oh. Well that’s why a lot of people avoid trying to cosign for other people.
Peter Daigle: Exactly.
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Katherine: With the questions that we’ve asked here today, one thing is it looks like there’s a lot involved. Depending on what a person’s situation is, there’s a lot that you have to know to think, to be able to help them navigate through. How often do you see these types of scenarios come through your office that you’ve worked with people … I’m asking more so like do you see them as a combination or are they single like you just ask these individual questions.
Peter Daigle: Yeah, they’re like traps for the unwary, okay. There’s dozens of traps out there and you’ve raised today a few of them and what it sort of does is just gives some examples of how bankruptcy is a process where you really should have an attorney because it’s talking about making plans to pay back the IRS or what do I do with my sister or my husband who cosigned? Somethings like that.

These are raising issues that aren’t going to be found by just looking on Google. In other words you’ve got to really have somebody who’s experienced in it who can take your case in the totality. In other words the entire circumstance of it, like going to a doctor when you can do all these tests and make decisions based upon everything you see, not just one certain thing.

The questions you asked today are examples of things that require an attorney to really figure out.

Katherine: Yeah, cause you can definitely Google … I tried to be smart and Google a little bit so I could have this conversation with you and sound intelligent and even with the one about binding effects I was like I don’t even know if I’m asking that with the right impression.
Peter Daigle: Yeah.
Katherine: I don’t know because you’d look and yeah, you can diagnose your problem with Google if you want to so then you’re left at, and then you still really don’t know. Can I just have where I’m trying to keep my house or my car or … I don’t want to make people feel like it’s just too complicated but I think it’s too important of a situation to try to do it on your own.
Peter Daigle: Yeah. It’s like Googling “I have a headache.” Try Googling “I have a headache.” Put that in Google and try letting Google diagnose what your problem is. Good luck right?
Katherine: Mm-hmm
Peter Daigle: It’s the same thing where you’re just going to get too much information coming at you and the information is going to be way, way too generic.
Katherine: Right
Peter Daigle: You’re going to end up with a headache.
Katherine: Right, something that makes me itch and …
Peter Daigle: Exactly, right? Exactly. You got to have …
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Katherine: All kinds of …
Peter Daigle: Right? All kinds of stuff.
Katherine: I’m going to have all kinds of diagnosis.
Peter Daigle: Yeah, then if you didn’t have a headache you’re really going to have one because you’re going to be so worried about what you got and that’s not going to be beneficial, right?
Katherine: Yeah, I think I did have that. I think I did have blurred vision. I did, yeah.
Peter Daigle: Yeah, right?
Katherine: You just keep worrying yourself when you can just call Peter and have a consultation and find out, or even if you look cause that’s another way to have some insight into what’s going on and what I find is that we tend as people to struggle before we just say okay I give up and I just want to get help.

By us having these conversations, we want you to give up sooner so that you can get the answers.

Peter Daigle: Exactly.
Katherine: Peter, tell them how to get in touch with you.
Peter Daigle: Well said. You can reach me by telephone at Peter Daigle. It’s 508-771-7444. Or you can reach me on the web at You can send me questions by linking up to my website. You can also request a copy of a free book on my website. I’d be happy to help you.
Katherine: Awesome. We did mention the copy of your book right?
Peter Daigle: Right. Yes. You can go on the website and request a copy on the website.
Katherine: Awesome. Until next time Peter, have a wonderful day.
Peter Daigle: Okay Katherine, thanks so much. Talk to you soon. Bye bye.
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Katherine: Bye now.

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