What is Bankruptcy?
Bankruptcy is a legal proceeding in which a person with debt problems can get a fresh start. Once you file a Chapter 7 or 13 bankruptcy, your creditors are legally prevented from taking action to collect on a debt. They cannot call you, bill you, threaten you, sue you, or do anything else to collect from you. They also cannot take property from you through repossession, foreclosure or garnishment.
Even after the Bankruptcy Reform Act, bankruptcy is a powerful remedy against your creditors. While no one wants to file bankruptcy, if you have debt problems, particularly with credit cards, filing bankruptcy can make a serious positive difference in your life.
Call my office and we’ll explain how to do it. We’ll also help you decide if bankruptcy is a good idea for you.
The Bankruptcy Process from Start to Finish
The first thing to do is talk with us about how a Chapter 7 or 13 would work if you file one. We can do that over the phone, or in our office.
Next you should take an approved credit counseling course and bring the certificate of completion to our office, along with six months' paycheck stubs. Then, if you decide to file the case, we prepare the official court papers for filing. These consist mainly of a list of your monthly income and expenses, a list of your property and possessions along with values, names and addresses of your creditors, and other basic financial information.
Once the bankruptcy papers are prepared, you review them, sign them, and we file them with the court. On the same day, the court issues an order to your creditors saying they cannot try to collect money from you. Several days later, you receive a copy of this official court order, which also contains a date and time for the required bankruptcy trustee meeting.
This meeting occurs at the federal trustee's office about four or five weeks after the case is filed. It is mandatory that you and your lawyer attend. You will need to bring your drivers license and social security card. At the meeting, the bankruptcy trustee asks you to verify that all the information in the court papers is correct. It normally takes about ten minutes.
In a Chapter 7, nothing else normally happens until sixty days later, when the court declares the case final and discharges your debts.
In a Chapter 13, several weeks later the court normally confirms your Chapter 13 repayment plan. Then all you have to do is keep making your payments to the trustee for the required three to five years. At the end of the case, the court grants a discharge of your debts.
The above information is summary only. You should call my office for advice on how your case would likely proceed.