Are you considering bankruptcy? Before you file, it’s important that you research the basics so as to avoid losing necessary assets. Hiring a bankruptcy attorney can go a long way towards making the filing process easier, but to start, read through the following outline of what to expect once you begin:
1. Paperwork Requirements- In order to file, you will need to submit a great deal of paperwork detailing your financial status. You will also need to provide documented proof that you have successfully completed pre-bankruptcy credit counseling.
2.The Automatic Stay- Once you and your lawyer file for bankruptcy, you will be granted an automatic stay by the court system. This means that all of your debts are temporarily frozen, and (more importantly) that your creditors can no longer make any efforts to collect from you. Instead, any communication on behalf of the creditors must go directly to a court-appointed bankruptcy trustee.
3. The Section 341 Meeting- Approximately thirty days after your bankruptcy filing, your creditors will convene at what is called a section 341 meeting, and you will be required to answer truthfully all questions regarding your financial history and the paperwork you have submitted.
4. Liquidation of Assets and Repayment Plan Submission- Once your trustee has determined which of your assets are exempt and which are not, the liquidation process will begin if you are filing for Chapter 7 bankruptcy—for those filing under Chapter 13 bankruptcy, it is at this point that you will be required to submit a repayment plan for consideration by the court.
5. Discharge- Once the liquidation of assets or repayment plan has been completed with the help of your bankruptcy lawyer, the temporary stay on collections will be made permanent via a court order and your debt will be cleared.
Would you like to know more about the bankruptcy filing process and what you can expect after your initial petition?