The Process of Filing for Bankruptcy Articles | Bankruptcy

By: Your Chapter 11

Bankruptcy can be a long and tedious process and this includes the filing aspects as well. You have a lot of paperwork to handle and a number of problems to face but as long as you’ve decided that filing for bankruptcy is your hope to freedom, what else can you do?

Credit Counseling:

Under the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA") of 2005, every person filing bankruptcy in the United States is required to get some serious credit counseling with a counseling service that has been court approved.

A Big Decision:

Some people think that the decision to file for bankruptcy is the biggest decision that they have to make but they are usually wrong. The step after deciding to file for bankruptcy is usually the most difficult. Here you must decide the sort of bankruptcy to file for. You can either file for Chapter 7 bankruptcy which can clear all of your debt or Chapter 13 bankruptcy which is a repayment plan. Most people would wish to file for Chapter 7 but if you are doing this you must be able to prove that you make below the average income in the state which you reside, this will ultimately mean that you cannot repay your debt regardless of any repayment plan that the courts may come up with.

Hiring a Lawyer:

Paying high legal fees when you are trying to get rid of your debt may seem very stupid but even the experts agree that getting a good bankruptcy lawyer will save you a whole lot more in terms of not only your time but your money as well. They know the laws in your state better than anyone and may be able to advise you to things you would have never known about. Also, once you have retained the services of a lawyer, your creditors will no longer be able to contact you directly and will have to go through your lawyer’s office regarding issues of unpaid debt.

A Meeting with Your Creditors:

As soon as your lawyer has submitted the petition for your bankruptcy, the courts will schedule a date for your meeting with the creditors. The purpose of this meeting is to prove to your creditors that you have honestly answered all their questions and that you have a complete understanding of the bankruptcy procedure and how it will affect you in the future. The lawyer will also ask you to list out all of your assets so that your creditors may review them.

The Inability to Use Your Credit Cards:

Anyone thinking about filing for bankruptcy should stop the use of their credit cards with immediate effect. Any continued charging of items when the intent to file for bankruptcy has been submitted may lead to a creditor challenging your right to discharge any debt owed.

Liquidating Assets:

If your bankruptcy case is of the chapter 7 kind, the trustee will first determine if you have any assets which can be liquidated and used to pay any of your creditors. If the sort of bankruptcy that you are filing for is a Chapter 13 bankruptcy, you may be allowed to retain your assets if you can come up with a repayment plan of about 3 to 5 years, in order to repay the debt that you have.

Waiting For Your Creditors to Respond:

Your creditors are given 60 days after you initial meeting to challenge either your entire discharge or the discharge of a particular debt. If no lawsuits of this nature are filed, after the 60th day, you will receive a notification of a discharge of debt if chapter 7 was filed. In Chapter 13 bankruptcy, a discharge notice is given about two months after the final payment has been made.