Bankruptcy in the District of Columbia
Bankruptcy in the District of Columbia is a legal option that offers relief to people and organizations who cannot pay their debts. Bankruptcy proceedings have long-term legal and financial implications. They allow those who can no longer pay their debts to get a fresh start by either liquidating their assets or setting up a repayment plan. They also protect struggling businesses and ensure that creditors are paid on time through reorganization or liquidation.
How it Works
Bankruptcy is governed by a set of federal laws and guidelines. Title 11 of the U.S. Bankruptcy Code and federal rules govern the procedures, eligibility criteria, and other associated bankruptcy issues. Most bankruptcy cases are filed under the three major chapters of the Bankruptcy Code, which are Chapter 7, Chapter 11, and Chapter 13. The U.S. Bankruptcy Court District of Columbia has the exclusive jurisdiction to handle bankruptcy cases and proceedings in the District. The court’s address and contact information are below:
U.S. Bankruptcy Court for the District of Columbia
333 Constitution Avenue N.W.
Washington, D.C. 20001
Debtors must file bankruptcy petitions with the bankruptcy court to begin a case. An individual, a legally married couple, partnership, company, or business trust may be a debtor in a bankruptcy case (subject to eligibility criteria regarding which chapter of the Bankruptcy Code may be used). A decedent’s estate is not allowed to petition for bankruptcy. Only one debtor may be the subject of a petition, except for a joint petition filed by an individual and their spouse.
An individual can file for bankruptcy without a legal representative. However, the process involved with filing for bankruptcy is quite complex, and debtors are strongly advised to seek professional bankruptcy counsel. Where a debtor files the bankruptcy petition, it is called a voluntary case. An involuntary case happens when the creditor files the petition. The debtor has the chance to respond to the petition and argue why they should not be in bankruptcy in an involuntary bankruptcy case.
What Do You Need to File for Bankruptcy
When filing for bankruptcy, debtors are required to provide different types of documents and information, including a government-issued I.D., bank account statements, credit reports, tax returns, recent paycheck stubs, debt and creditor information. The debtor must supply all relevant documentation within 14 days of applying unless the court grants an extension. The petition automatically stops or “stays” debt collection actions against the debtor and their property. While the stay is in effect, creditors cannot file or pursue litigation, garnish wages, or even make phone calls requesting payment.
District of Columbia bankruptcy records is generally open, except where they are deemed confidential. Court records filed after December 1, 2003, are accessible at the public terminals of the Clerk’s Office. They are also available online for 10 cents through the Public Access to Court Electronic Records (PACER). Users need the case and docket information of the bankruptcy case to access its records. Requests for court case records can also be made through the Multi-Court Voice Case Information System (McVIS) by calling (866) 222-8029.
Court records of cases filed before October 3, 2003, are kept at the Washington National Records Center (WNRC). They are not accessible to the public. To obtain these records, the requester should contact the Clerk’s Office to obtain an Accession Number, Location Number, and Box Number for the archived case. Complete the order form on the WNRC’s website. A deputy clerk must order archived court records from the WNRC to see them at the courthouse. It usually takes five to 10 business days to process requests.
Before December 1, 2003, court records can only be seen at the Clerk’s Office’s public computer terminals by case participants. At 50 cents per page, the Clerk’s Office can also mail copies of documents.
The Bankruptcy Code requires that applicants seek credit counseling within 180 days of filing for bankruptcy. It further stipulates that if any of the following apply, a debtor must wait 180 days before filing a petition:
- A previous petition was dismissed because the applicant disregarded a court order or purposefully missed a hearing.
- The applicant requested dismissal of the case after a creditor requested that the automatic stay be lifted.
- The petition was found by the court to be an intentional attempt to abuse the bankruptcy system.
Debtors should be aware that the court does not approve all bankruptcy cases. The court may strike out the case if the petitioner fails to file necessary fees, gives inadequate information, or intentionally misrepresents all or part of the case. In some bankruptcy cases, the court grants the discharge of some debts while requiring the applicant to repay the remainder outside the bankruptcy system.
District of Columbia Bankruptcy Records
The District of Columbia (D.C.) bankruptcy records are court records generated by the United States Bankruptcy Court, District of Columbia during bankruptcy proceedings. Bankruptcy cases commence when an individual, business, or company owes financial debts that they cannot pay and declares bankruptcy by filing a petition with the federal court. These parties, typically known as debtors, file the bankruptcy claim for protection, and the court, via an assigned trustee, uses their declared incomes and assets to pay the owed creditors.
Unlike most legal matters settled in the District of Columbia Courts, bankruptcy is a right provided by federal law. Hence, it is addressed in a federal bankruptcy court. The records during these hearings are matters of public record that contain details of case activities in different formats, including physical documents, electronic records, transcripts, etc. Following the Freedom of Information Act, D.C bankruptcy records are available to any entity on request. They are obtainable from federal courts, credit reporting agencies, and other third-party websites.
What do District of Columbia Bankruptcy Records Contain?
Most of the information in a District of Columbia bankruptcy record can be categorized into personal information and financial documents that detail a debtor's identity, assets, debts, expenses, and income. The debtors usually provide this information and documents voluntarily when they file their bankruptcy claims. A D.C. bankruptcy record will typically contain the information below:
- Debtor's full legal name
- Debtor's credit report
- Creditor's names, addresses, and contact information
- Attorney's contact information (if applicable)
- Debtor's tax returns for the past two years at least
- Filing date
- Debtor's proof of income for the last six months, for example: pay stubs and payment advice
- Entity's bank, retirement, and brokerage account statements
- Valuations or appraisals of any real estate property that the debtor owns
- A voluntary petition appropriate for the chapter and type of bankruptcy that the entity filed
- A signed declaration
- A statement of the debtor's current monthly income and means-test calculation
- Certificate of completion of credit counseling course and certification of a financial management course
- The bankruptcy discharge order and the day it was issued
- Trustee's information
- Case status
Are Bankruptcy Records Public Information?
The federal judiciary is directly in charge of bankruptcy cases and the records generated during the court proceedings. Hence, following the Freedom of Information Act (FOIA) of 1967, all federal agencies and entities are ordered to keep citizens apprised of the government's dealing and activities. To fulfill the Act's provisions, the agencies allow the general public to request access to public records. This includes bankruptcy court records. Therefore, under state and federal law, bankruptcy records are public information. Nevertheless, details regarded as personal data identifiers may be incomplete or wholly redacted from the record.
Due to the type of information required to address a bankruptcy case, submitted documents usually contain personal data identifiers. This includes information such as an entity's social security number, taxpayer identification number, birth date, financial account number, and the name of any individual identified as a minor. Under Rule 9037 of the Federal Rules of Bankruptcy Procedure, the filing party must protect these personal data identifiers from public view by providing more conservative but accurate information. Hence, instead of the full details that may or may not be redacted, the entity may provide the following instead:
- The last 4 digits of a social security number and taxpayer-identification number
- The year of the individual's birth
- The minor's initials, instead of the full name
Record seekers looking for an alternative to government sources may obtain bankruptcy records from third-party websites. These non-governmental websites often come with tools that help simplify the search for single or multiple records. However, record availability on third-party sites tends to vary because they’re independent of government sources. To obtain bankruptcy case information using third-party sites, record seekers may need to provide:
- A complete name of the debtor involved in the record
- A bankruptcy case number
How to Get District of Columbia Bankruptcy Records
The United States Bankruptcy Court, District of Columbia creates, stores, and maintains bankruptcy court records in D.C. The court has a functional website where entities can file cases and search for case documents of bankruptcy court proceedings held in the past. The court also uses the federal judiciary's automated docket and electronic filing system known as Case Management/Electronic Case Filing (CM/ECF). Through the CM/ECF site, users can view court dockets and other documents or pleadings associated with bankruptcy cases.
However, although this site's data is viewable in its entirety, only attorneys can print case documents from their personal office printers. Therefore, with an authorized attorney's help, bankruptcy records are obtainable from the CM/ECF database. The CM/ECF database also provides case participants with access to case information and documents filed electronically before December 1, 2003. However, interested persons may view these documents at the public computer terminals in the clerk's office or request that the office mails copies of records at a charge of 50 cents per page.
Additionally, Public Access to Court Electronic Records (PACER) also guarantees electronic access to court data and bankruptcy records. This electronic public access service allows the public to retrieve cases and docket information online from the federal bankruptcy courts. To use this service, interested parties must register to own a PACER account and pay usage fees. The federal judiciary has set the required fees at the lowest possible rates to ease public access. Note that PACER only grants access to information on bankruptcy cases filed on or after December 1, 2003. To print copies, a charge of 10 cents per page applies.
Access to archived records
Typically, a bankruptcy record stays on the court records database for about 20 years. After that, they are transferred to the federal archives for safekeeping. Hence, if any person seeks access to cases filed case information before October 3, 2003, they may contact the Washington National Records Center (FRC).
Although the FRC is not open to the public, individuals can order the records with the bankruptcy court clerk's help. First, the clerk must provide an accession number, location number, and a box number for the archived case. Then, the inquirer must obtain and complete an order form provided on the Washington National Records Center website.
Overall, for access to complete physical or electronic records of a bankruptcy case, inquirers are advised to visit the courthouse where the bankruptcy claim was originally filed. They may also send electronic and postal mails requesting access to the bankruptcy records in court's care.
U.S. Bankruptcy Court, District of Columbia
333 Constitution Avenue North West
Washington D.C. 20001
Clerk's Office: (202) 354-3280
ECF Help Desk: (202) 354-3281
How do I Find Out if My Bankruptcy Case is Closed in the District of Columbia?
Contrary to popular opinion, a bankruptcy case in the District of Columbia is not officially closed when the court discharges a petitioner's debt obligations. A case is only formally closed when the court enters a final decree or order. According to the bankruptcy code and procedures, when a bankruptcy case is closed, the court sends the debtor or associated attorney a notice in the mail.
State residents who did not receive any notice to that effect are advised to first check with their attorney (if they hired one) or contact the bankruptcy clerk's office. They may also find their case status electronically using PACER or the Multi-Court Voice Case Information System (McVCIS). McVCIS grants quick access to essential information about a case, including if it is closed or not. The interested party should dial (866) 222-8029 from a touch telephone and follow the operator's instructions. The inquirer must provide either the filing party's name or the case number to access the court's database. The system only provides information such as:
- Filing date
- Parties involved
- Bankruptcy chapter
- Date and place of creditors' meeting
- Name of trustee
- Name of attorney
- Case status
Finally, because bankruptcy affairs are usually reported in the public records section of a complete credit report, interested parties can determine their case status by obtaining a copy of their credit report.
Can a Bankruptcy be Expunged in the District of Columbia?
Although orders that delete or destroy court records (expungements) are common in criminal cases and state courts, such orders are rare in federal courts and bankruptcy cases. The bankruptcy judges are particular in granting such orders because the bankruptcy code expressly authorizes public access to court files, dockets, and documents submitted in a bankruptcy case. The code demands that bankruptcy case records remain a matter of public record unless parts or all of a record are sealed by court order or the law. Hence, under the code, the court has no specific authority to enter an order expunging a debtor's bankruptcy case files.
However, per 11 U.S.C. § 105(a), the court has the statutory authority to "protect an entity in a bankruptcy case with respect to scandalous or defamatory matters contained in the bankruptcy record." Therefore, the court can order an expungement if it is necessary to fulfill this provision of the law. Also, this law allows the court to expunge records of bankruptcy claims filed with the intent to defraud or without the debtor's authorization.
What is the Downside of Filing for Bankruptcy in the District of Columbia?
While filing for bankruptcy provides debtors with certain reliefs in the District of Columbia, it has drawbacks. First, filing for bankruptcy can be quite expensive. In the District, filing a Chapter 7 bankruptcy costs $338, Chapter 13 bankruptcy costs $313, or Chapter 11 bankruptcy costs $1,738. This filing fee does not include other court fees and the professional fees of the debtor’s lawyer, accountant, and any other professional hired to help with the process. The services of these professionals will be required because of the extensive and complex process of bankruptcy cases. In addition, filing for bankruptcy does not discharge all of the debtor’s debts. Debts like alimony, child support, student loans, and criminal fines are not affected. While bankrupt, a debtor is still required to pay these debts.
Also, schedules showing the debtor’s assets and liabilities must be filed within 14 days of filing a bankruptcy petition. The bankruptcy will be dismissed if the required schedules are not filed on time. A debtor must also appear for examination in a creditors’ meeting. Failure to do so might result in dismissal or an order compelling the debtor to appear. If a case is not dismissed and the court grants a discharge, the debtor is barred from receiving another discharge for some time. Fraudulent information or activities by the debtor can result in the denial of a discharge and can be prosecuted as a crime.
Furthermore, if the bankruptcy filing involves liquidation, the debtor has to sell assets to settle debts. Hence, the debtor loses assets unless the asset is exempted from being taken under the District of Columbia laws. Because of bankruptcy, individuals usually have to cut costs by following strict budgets. Businesses undergo massive layoffs and change business management strategies to manage resources.
The public accessibility of bankruptcy records implies that credit reporting agencies, landlords, recruiting companies, or potential employers have access to them. Per the Fair Credit Reporting Act, bankruptcy proceedings are reported on a person’s credit report for less than ten years from the date the bankruptcy case is filed. Consequently, the credit score of a debtor may drop unless the credit was already low. This can have other effects like difficulty accessing loans and mortgages, possible cancelation of credit cards, and high-interest rates.
In addition, landlords and employers may run a credit report and deny the debtor’s application based on a debtor’s bankruptcy record. The consequence is that while the record is still active, a debtor may be unable to get positions requiring financial or managerial skills.
Despite these consequences, some advantages come with filing for bankruptcy. The circumstances of each application may determine the benefits that a debtor will get. People who file for bankruptcy may be interested in the following benefits:
- For example, creditors may be required to allow debtors to spread debt repayment over up to five years in Chapter 11 bankruptcy. This will allow applicants to pay off their debts in a more convenient manner.
- Some bankruptcy cases are resolved quickly, allowing the debtor to start the process of repairing their credit score and overall financial state.
- Debt Reduction: Filing for bankruptcy can sometimes reduce the amount of debt that can be discharged. The debtor’s burden may be lessened if the bankruptcy court asks the debtor to pay off some obligations while dismissing the remainder. In some situations, debtors may discharge medical bills, personal loans, or credit card debt.
What is Chapter 11 Bankruptcy in the District of Columbia?
Chapter 11 is commonly referred to as the “reorganization chapter.” Corporations, partnerships, and individuals can reorganize and create a debt repayment plan under Chapter 11 without liquidating all of their assets. When a debtor files for Chapter 11, they submit a plan to creditors that, if accepted by their creditors and approved by the court, will allow the debtor to reorganize personal, financial, or corporate affairs and reestablish financial viability. Persons may file for Chapter 11 bankruptcy if they do not qualify for other types of bankruptcy.
Bankruptcy under Chapter 11 is complicated, expensive, and time-consuming. Within 120 days, the debtor must create and file a payment plan acceptable to all creditors who may be affected. It might be extended to 18 months of exclusivity. The court affirms that the proposal meets all other legal requirements once the creditors vote on it. The plan lays out how the debtor can maintain running their business, increase earnings, keep their assets and properties, borrow more money, and pay their creditors — whose claims are categorized as unsecured, secured, or priority.
Unless the court directs the record to be kept under seal or expunged, Chapter 11 bankruptcy case records are open to the public. The U.S. Bankruptcy Court District of Columbia has a list of filing requirements for Chapter 11 bankruptcy.
What is Chapter 7 Bankruptcy in the District of Columbia?
Chapter 7 is commonly referred to as the “liquidation chapter.” Individuals, partnerships, and organizations who cannot repair their financial status use this chapter to file for bankruptcy. The debtor’s estate is liquidated under Chapter 7 under the Bankruptcy Code’s procedures. Liquidation is the procedure by which a trustee sells the debtor’s non-exempt property for cash and distributes the proceeds to creditors.
It is a quick and simple debt relief process, but it has the disadvantage of causing asset loss and permanently ending business operations. When a debtor files for Chapter 7 bankruptcy, the court issues an automatic stay, which prevents creditors from attempting to collect debts. The majority of the debtor’s belongings are seized and sold, with the proceeds going toward paying off as many obligations as possible. A creditor can also file for bankruptcy under Chapter 7.
The means test is used to establish eligibility for Chapter 7 bankruptcy. This test is used to see if a debtor has the financial means to repay a certain amount of general unsecured debt after settling their monthly expenses. There is a presumption of abuse if the means test reveals that the debtor can repay the debt. That is, receiving a Chapter 7 discharge would be an abuse of the bankruptcy process because the debtor may be able to repay debts outside of bankruptcy or through a Chapter 13 repayment plan. Chapter 7 bankruptcy is usually not an option for debtors with a lot of disposable money. The analysis includes applying particular Internal Revenue Service (IRS) guidelines for expenses in establishing the debtor’s ability to repay and reviewing income over the previous six months to see if the debtor is earning more than the median income for the District of Columbia. If a person qualifies for Chapter 7 bankruptcy, they can have their obligations discharged in five months. The procedure entails:
- Enrolling for a credit counseling course
- Submitting a petition to the court
- The 341 hearing or meeting of the creditors
- Partaking in a financial management class
- Court discharge order
Except they are expunged or sealed, information on Chapter 7 bankruptcy cases is available to the public. The U.S. Bankruptcy Court District of Columbia provides the filing requirements for Chapter 7 bankruptcy.
What is Chapter 13 Bankruptcy in the District of Columbia?
Under Chapter 13 of the Bankruptcy Code, a person with a regular income who is in debt but believes they can be paid off in a reasonable amount of time and whose debts do not exceed specific debt limits can apply for bankruptcy. The debtor can file a plan under Chapter 13 in which they agree to pay a portion of future income to the Chapter 13 trustee for distribution to creditors. If the court approves the plan, the debtor will be protected while repaying the debts. Debtors typically file Chapter 13 bankruptcy with higher salaries who wish to keep their properties. Some debts may be discharged under a Chapter 13 bankruptcy, while others will require full payment under a repayment plan.
This type of bankruptcy does not give creditors as much power as Chapter 11, but it does help non-priority unsecured debt discharge. People who have had a previous Chapter 7 bankruptcy within the last six years are not eligible for Chapter 13. Also, Chapter 13 bankruptcy is not available to anyone who has filed for Chapter 7 bankruptcy in the previous four years or Chapter 13 bankruptcy in the last two years.
Unless the court seals or expunges, case information about Chapter 13 bankruptcy is open to the public. The U.S. Bankruptcy Court District of Columbia provides interested persons with the filing requirements of Chapter 13 bankruptcy.
What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy in the District of Columbia?
There are many differences between Chapter 7 and Chapter 13 bankruptcy filings. Chapter 7 bankruptcy includes liquidation, and the trustee in charge is in charge of overseeing the sale of the debtor’s non-exempt assets and properties. The trustee then pays creditors, returns any relevant exemptions’ value, and receives a fee. In contrast, the Chapter 13 procedure does not necessitate liquidation. When a debtor files for Chapter 13 bankruptcy, creditors and the court must accept a repayment plan.
Furthermore, the eligibility requirements for both types of bankruptcy are distinct. The applicant’s debt must be less than the current Bankruptcy Code debt limit to be eligible for Chapter 13 bankruptcy. While Chapter 7 eligibility is determined by comparing the debtor’s income to the state’s median income, Chapter 13 eligibility is determined by a means test. Applicants with monthly incomes below the state median have an easier time qualifying for Chapter 7 bankruptcy than those with incomes beyond it.
Because it requires fast liquidation, a Chapter 7 bankruptcy case can normally be resolved in six months or less. In contrast, Chapter 13 bankruptcy is more complicated, with repayment plans lasting up to five years.
What is Bankruptcy Protection in the District of Columbia?
For persons filing for bankruptcy in the District of Columbia, the automatic stay is the most crucial protection. The automatic stay imposed by Section 362 of the U.S. Bankruptcy Code takes effect automatically after a debtor files a petition and stops creditors from pursuing debts against the debtor. As a result, the debtor has time and opportunity to figure out a repayment plan and is protected during this period because violators of this automatic stay can be prosecuted and fined.
It is important to note, however, that not all activities are suspended throughout the stay. Tax audits, ongoing criminal/civil proceedings, and medical payments are not affected. Furthermore, many pre-petition acts, including completed foreclosures and landlord legal actions, are irreversible.
In addition, there are some restrictions on the length of time that an automated stay can remain. Where there was a prior bankruptcy filing within one year, the automatic stay will no longer be in force after 30 days.
What are the District of Columbia Bankruptcy Exemptions?
While federal laws govern bankruptcy cases, the District of Columbia has laws that specify things that residents can protect from creditors. These exemptions are provided for under the District of Columbia exemption statutes, particularly D.C. Code § 15-501. Under the District of Columbia law, the following exemptions are available:
- Homestead exemption: A debtor can protect all equity in a home, condominium, co-op, or other real property as long as their dependents reside there.
- Motor vehicle exemption: A debtor can protect up to $2,575 of equity in a motor vehicle.
- Wildcard exemption: These are exemptions that do not cover all types of properties. If a debt has particular things that they would like to protect, the District of Columbia provides them with a wildcard that covers a value of up to $850 in any property and an additional $8,075.
- Tools of the trade exemptions: A debtor can protect the library, furniture, tools of a professional or artist for up to $300. Also, tools of trade or business of up to $1,625 can be protected.
- Wages exemptions: A debtor who is the head of the family can exempt 75% of their unpaid wages or pension payments each month. They can exempt non-wage earnings or pension payments of up to $200 per month. Debtors who are not the head of the family can be exempt up to $60 a month for up to two months.
Other bankruptcy exemptions cover personal properties, pensions, public benefits, and miscellaneous things like alimony or child support.
What are the Other Types of Bankruptcy in the District of Columbia?
Aside from entering bankruptcy under Chapters 7, 11, and 13, the District of Columbia offers three other bankruptcy options:
Chapter 9 bankruptcy: This is a type of reorganization that involves cities, towns, counties, or villages that are financially bankrupt. It is also called municipal bankruptcy. This chapter makes no provision for liquidating assets. Instead, the debtor reorganizes obligations and devises a repayment scheme that may include renegotiation, interest or principal reduction, debt extension, or the acquisition of additional loans.
Chapter 12 bankruptcy: Only bankrupt family fishers or farmers with a regular annual income are eligible for Chapter 12 bankruptcy relief. Debtors (within the total debt level) must prepare a plan to repay creditors within three to five years, similar to Chapter 13 bankruptcy.
Chapter 15 bankruptcy: This chapter deals with insolvency proceedings involving parties having interests in two or more jurisdictions. In auxiliary or cross-border situations, Chapter 15 bankruptcy has systems in place to protect the interests of all parties concerned.