What Happens When You File Bankruptcy?

When You File Bankruptcy 5 Things Happen:

  1. Creditors Must Stop Calling, Mailing or otherwise Collecting.
  2. Any Lawsuits against you Stop.
  3. Your Bankruptcy Pleadings are reviewed by a Bankruptcy Trustee.
  4. The Trustee approves or has issues with your pleadings.
  5. If approved, the Bankruptcy Judge issues you a discharge of most of your debt.

People experience financial problems for a variety of reasons.  Falling into debt is not always due to the abuse of credit or poor money management skills. Many times the cause of a person’s debt problem is out of his or her control.  Losing a job, suddenly being in the hospital or the death of a spouse can quickly lead to overwhelming debt as the person tries to make ends meet with less money.  The bills begin to pile up even though the person is trying his or her best to pay the debts.

Filing bankruptcy is more common than you think.  Bankruptcy is designed to give a person who is struggling to pay bills and living expenses a fresh start to rebuild following a financial crisis, regardless of the cause of the financial crisis.  Bankruptcy does not judge the debtor – it simply offers a solution that allows the person to get rid of debt he or she cannot pay and the stress associated with overwhelming debt so he or she can begin to take steps for a more financially secure future.

Filing a Bankruptcy Case

Once you make the decision to file a bankruptcy case, our office helps you through each step of the bankruptcy process.  We explain what information you need to provide to our office so that we can prepare the bankruptcy petition, schedules and statements for filing with the Bankruptcy Court. We work closely with you as we prepare the forms to ensure they are correct.  You must take the required credit counseling course prior to the filing of your bankruptcy.  After we have prepared the necessary forms, you will review and sign your bankruptcy petition, schedules and statements with an attorney before they are filed with the court.

Once your bankruptcy case is filed, creditors are prohibited from contacting you to collect debts. The filing of the bankruptcy case stops all collection efforts including but not limited to foreclosures, wage garnishments, repossessions and lawsuits. This is referred to as the automatic stay.

Within 7 to 10 days after we file your bankruptcy petition, the Bankruptcy Court will send you and each of your creditors a Notice of the Meeting of Creditors.  The Notice contains important information about your case such as the case number, the hearing date and time, the location of the hearing, and other deadlines and information related to your case.  Now that you have a case number, you can proceed to take the second required bankruptcy course so that you will be eligible for your bankruptcy discharge.

First Meeting of Creditors

You are required to attend the Meeting of Creditors.  Your attorney will be with you at the hearing but you are the one that must testify and answer questions under oath.  It is a simple process whereby you answer questions for a bankruptcy trustee — there is no judge present at the hearing.  Your hearing will last approximately 5 to 10 minutes depending on your case.

The trustee asks you questions about your income, expenses, assets, debts and financial history.  The questions the trustee asks at the hearing are the same questions that you have already answered for our office at least once during the preparation of your bankruptcy petition, schedules and statements.  Creditors may appear at the hearing to ask questions; however, this is rare and typically only occurs in large bankruptcy cases or business cases.

After the Meeting of Creditors

What happens after the meeting of creditors depends on your case.  In a Chapter 7 case, the next step would be to complete the Debtor Education course, if you have not already done so, and then wait 60 days until you receive your discharge order and the case is closed.

In a Chapter 13 case, you may or may not be required to attend the Confirmation Hearing for your proposed bankruptcy plan.  Our office will inform you of anything you must do after the First Meeting of Creditors.  In most cases, you continue to make your monthly trustee payments according to your bankruptcy plan until all payments have been made and your case is discharged and closed.  A Chapter 13 case lasts three to five years depending on the financial situation of the debtor.

Once you receive your bankruptcy discharge and the case is closed, you have no legal responsibility to repay any of the discharged debts. Your creditors are forever barred from attempting to collect the discharged debts.  The creditor cannot contact you about the discharged debt, file a lawsuit to collect the debt, hire a debt collector or try to attach your property.  The debt is gone forever.

The Bankruptcy Process with an Attorney

Bankruptcy law is complex and bankruptcy cases can become complicated very quickly.  Each bankruptcy case is different because each person’s financial situation is unique to that person.  Having an experienced bankruptcy attorney to represent you throughout the bankruptcy process makes the process much less stressful because the attorney does most of the work.  Your attorney advises you of everything that you must do and explains the various steps in the bankruptcy process.  If you choose to file a bankruptcy case on your own, the court will expect you to hold you to the same standards as an attorney.  Lack of legal knowledge is not a defense if you make a costly mistake in your case.

It is your attorney’s job to make sure that all of the requirements are met for you to receive a bankruptcy discharge at the end of the bankruptcy case.  You must follow the instructions given to you by your attorney and, if you do, you will complete your bankruptcy case, receive your discharge and be on your way to a more financially secure future.

If you are struggling with overwhelming debt, contact Weston Legal, PLLC to discuss your bankruptcy options.  You have options for dealing with your financial problems and we will help you find the solution that is best for you.

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