Many people seeking bankruptcy have a limited knowledge of the process and what to expect. The process is made up of many steps that require attention to detail, much of which can make or break the outcome of your case. From filing your petition with the court to completing credit counseling course requirements, it is important you understand exactly what is expected of you along the way.
From The Beginning
First, if you haven't consulted with a bankruptcy attorney, now is the time. Going into bankruptcy uninformed or without legal help is never advised. The reason that knowledge and representation are important in the bankruptcy process is simple; both are your best chance at a successful outcome.
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When you file for bankruptcy you will be required to complete a petition. This document is extremely important for how the remainder of your case will proceed. This document outlines your financial situation in terms of your income level, how much you have in various fund accounts, the list of all your creditors and amounts owed, and the status of your assets. The more detail you can provide, the better. While many people fear providing such detail into their financial lives, the court requires this information to gain an understanding of your situation. Many people become concerned when asked to list information about their funds and assets for fear of losing them to creditors. Remember that the intention of bankruptcy is to get you back on your feet, not strip you of everything you own. Much of what you need and value is protected from liquidation under bankruptcy exemption laws. Never attempt to hide or misconstrue information on your petition.
Once your petition has been filed, the court will determine whether you qualify for bankruptcy protection. For a Chapter 7 case, you must pass a means test to ensure your income level is insufficient to support repayment of your debts. The means test formula evaluates your income level against the median income level of the state of your filing. Passing the means test means you do qualify for Chapter 7, assuming you have not filed for a prior bankruptcy in the last six years. If you do not pass the means test you will be eligible to file for Chapter 13, unless your unsecured debts exceed $336,900, secured debts exceed $1,010,650, or have filed for bankruptcy in the last two years.
If your case is accepted into the court you must be sure to pay the necessary filing fees and complete a credit counseling course. Both of these simple steps can be a major hiccup in the completion of your case if you do not complete them on time. You must also attend a 341 Meeting of Creditors, in which you may be subject to questioning from the trustee or your creditors. This meeting is to ensure that the court has provided creditors the chance to plead their case. However, most people find that the meeting rarely hosts any creditors, unless the debts are substantial. If you are seeking Chapter 7 bankruptcy, the court will determine which of your debts are eligible for discharge and whether any of your non-exempt assets will be liquidated to satisfy debts. Any court orders for liquidation will be carried out in a matter of a few months before your case is discharged. In a Chapter 13 case, the court will develop a repayment plan that you must adhere to in order to obtain a discharge. In many cases, the Chapter 13 plan will take place over a period of up to five years, in which the discharge order will be provided upon completion.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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