Coming to the decision to file bankruptcy can be a painful process filled with emotions. At the Law Offices of Todd S. Osborne, we help clients get through the legal procedure and out of the despair mounting debt can bring.
The process of filing for Chapter 7 bankruptcy is fairly straightforward, and is laid out below for you so that you will understand the journey. It's always less scary to go through something difficult if you understand the process in advance and get the help of wise counsel.
Chapter 7 bankruptcy is also known as liquidation. You must meet certain criteria established under the bankruptcy code to file for bankruptcy.
Deciding to File Bankruptcy
If you are struggling with mounting debts, and your monthly debts exceed your monthly income, it might be time to schedule a consultation with an attorney who can advise you of your options. An attorney can review your debts and assets and advise you what options are available.
It will be your decision whether to move forward with filing for bankruptcy if you are eligible to file based on your unique financial situation. An attorney will advise you which debts are likely to be discharged in bankruptcy and any issues that may come up in the process. It is possible to file bankruptcy without the help of an attorney; however, an attorney will help you make sure that all of the paperwork is properly filed, all of the required information is included and help you get through the process step by step.
It will be your decision whether to move forward with filing for bankruptcy if you are eligible to file based on your unique financial situation. An attorney will advise you which debts are likely to be discharged in bankruptcy and any issues that may come up in the process. It is possible to file bankruptcy without the help of an attorney; however, an attorney can help you make sure that all of the paperwork is properly filed, all of the required information is included and help you get through the process step by step.
If you have any secured debts or valuable assets, such as a house or a car, you can discuss with an attorney how filing bankruptcy would affect your property and what your options are to protect your property. There are certain exemptions and allowances under bankruptcy law.
If you decide that bankruptcy is a good solution for you, you will take the following steps.
Complete Credit Counseling
Credit Counseling is a mandatory part of the bankruptcy process and must be completed within six months before your bankruptcy can be filed. You will need to use a state approved course provider. Your attorney can provide you with a list of options. Once you complete the credit counseling, you will receive a certificate of completion which you must keep as it will be needed for your bankruptcy filing.
Keeping all of documents required for filing your bankruptcy in one place will make the process easier and less stressful.
Gather Bankruptcy Documents
You can start to accumulate the documents needed to file bankruptcy as soon as you decide to file. You will need records of all debts, assets and income. An attorney can walk you through all of the necessary documents including those you may not think to include such as pending lawsuits or recently transferred assets, so that it is less likely something will prevent your case from moving through the system smoothly.
Filing Your Bankruptcy
After you have gathered all of your records, you can meet with your attorney who will fill out the paperwork and get it ready for filing. Once your case is filed, an automatic stay will make it illegal for creditors to contact you to collect your debts until your case is resolved. This can be a huge relief if you have been dealing with creditor harassment. You must pay a fee to file your bankruptcy. In some cases, a reduced fee may be available.
Meeting of Creditors (341 Meeting)
After your case file is reviewed by the bankruptcy trustee, and any questions are resolved, a date will be set for your 341 meeting of creditors. The bankruptcy trustee will manage the meeting. Creditors have the option of attending this meeting. Most of these meetings are brief. You will need to bring identification and social security card (or proof of it) to the meeting. The trustee will ask you some basic questions, and any creditors who attend will also have the opportunity to ask questions. This meeting may happen in person or via video conference depending on the court's current policies.
Management of Your Case
After the 341 meeting, the trustee will deal with any non-exempt property and any secured debts will need to be handled in accordance with arrangements you have made. For example, if you have a car which is under a lien, you may decide to reaffirm the loan and keep the car or you may wish to surrender it. Your attorney will be able to advise you of your options in advance so that nothing at this stage will come as a surprise.
Pre-Discharge Debtor Education Course
There is a second educational course required in the bankruptcy process. It is the last requirement before your discharge is granted, so it is a good idea to complete it as soon as possible after your creditor meeting. A case can be dismissed and will not be discharged until the certificate of completion is filed. It will cost additional money to reopen your case if you do not complete the course within the allotted time - currently within 60 days of your meeting with creditors in California.
If everything is in order with your case, the next step is debt discharge. Discharged debts can no longer be collected. Hold on to your discharge documentation in case you are ever contacted regarding a debt included in your bankruptcy.
Keep in mind that certain debts cannot be discharged. Your attorney will advise you on any debts you have which will not be dischargeable.
Debt relief through bankruptcy can give you a new start. The next step is to start rebuilding your credit and your life.