Bankruptcy Process

The 7 Most Common Bankruptcy Mistakes

 

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To initiate bankruptcy you must file a bankruptcy Petition and other documents regarding your financial affairs with the court. Filing a Petition automatically stays (i.e., stops) creditors from pursuing any further collection activities, which gives you time to breathe.

 

Prior to filing the case you must first attend a financial counseling class. It's convenient and relatively painless since it can be taken on the Internet or over the phone, and can be done jointly with a spouse. It takes approximately an hour and a half to complete. After the case is filed, you must also take a debtor education class, which is the same procedure as the counseling class.

 

You must also attend a hearing, called The Meeting of Creditors, which occurs approximately 30 days after the case is filed. The Bankruptcy Trustee, who is the person assigned to administer the bankruptcy case, facilitates the hearing. He or she will put you under oath and will ask various questions regarding the accuracy of the documents filed, including information pertaining to income, expenses, and assets.

 

Creditors are also permitted to attend and ask questions about the nature and location of assets. However, creditors are not required to attend and rarely do. A representative from The United States Trustee's Office may also attend and ask questions. However it is not required and typically only occurs when there is a problem with the case, which is one of the many reasons it's a good idea to be represented by an attorney, to avoid those types of issues.

In your bankruptcy papers, you must disclose to the court all of your assets and debts, even if you want to keep a certain debt. In most cases, you are allowed to keep all your assets under the "exemption" statutes provided for by law. In other words, exempt assets are protected from the reach of your creditors and you will be allowed to keep them. However, non-exempt assets are not protected from creditors, although that can often be avoided with proper planning, which is another reason why it's a good idea to have an attorney. See the Bankruptcy Asset Protection page for more details.

 
If the Bankruptcy Trustee determines that you have non-exempt assets, he or she may legally sell those assets and distribute the proceeds to your creditors. Alternatively, you may purchase the assets from your bankruptcy estate, either outright in a Chapter 7, or over time in a Chapter 13. I will inform you of what risks you're facing in this regard before we file your case, and we will take every possible measure to minimize the risk and protect your assets. But sometimes, losing certain assets is impossible to prevent, in which case, you will know that going into it, and you certainly have the option of not filing at all if you're not comfortable with the risk.

 
If you have met all obligations in a Chapter 7 case, including redeeming, reaffirming, or surrendering your vehicle, your discharge will be granted approximately 60 to 90 days after The Meeting of Creditors. A discharge means the bankruptcy has been granted by the court and your liability for your debts has been eliminated, except for non-dischargeable debts. The Trustee or the creditors have the right to object to your case, which can delay or prevent your discharge, so it's critical that your case is handled properly.

 
In a Chapter 13 case, you will commence making your monthly Plan payments 30 days after your case is filed. Within a few months, we may or may not need to amend your Plan, depending on whether the Trustee or creditors object to the Plan. If objection are made, adjustments may need to be made and/or the judge will need to determine whether the plan is reasonable.

 
The ultimate goal is to get the Plan confirmed (i.e., approved by the Court), which happens once the Trustee and creditor objections are satisfied. Once the Plan is confirmed, your case is smooth sailing from there and you just keep making your payments each months for the duration of your Plan. You also need to provide various documentation throughout the duration of your Plan.

 
Your Plan can be modified in the future if your circumstances change. Your Chapter 13 can also be converted to a Chapter 7 if you qualify.

 
Your Chapter 13 discharge will be granted in three to five years, after all requirements have been met and all Plan payments have been made, with the exception of non-dischargeable debts.

 

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The 7 Most Common Bankruptcy Mistakes

 

Request your free copy now!!

 

 

Your Name (required)

Your Email (required)

To initiate bankruptcy you must file a bankruptcy Petition and other documents regarding your financial affairs with the court. Filing a Petition automatically stays (i.e., stops) creditors from pursuing any further collection activities, which gives you time to breathe.

Prior to filing the case you must first attend a financial counseling class. It's convenient and relatively painless since it can be taken on the Internet or over the phone, and can be done jointly with a spouse. It takes approximately an hour and a half to complete. After the case is filed, you must also take a debtor education class, which is the same procedure as the counseling class.

You must also attend a hearing, called The Meeting of Creditors, which occurs approximately 30 days after the case is filed. The Bankruptcy Trustee, who is the person assigned to administer the bankruptcy case, facilitates the hearing. He or she will put you under oath and will ask various questions regarding the accuracy of the documents filed, including information pertaining to income, expenses, and assets.

Creditors are also permitted to attend and ask questions about the nature and location of assets. However, creditors are not required to attend and rarely do. A representative from The United States Trustee's Office may also attend and ask questions. However it is not required and typically only occurs when there is a problem with the case, which is one of the many reasons it's a good idea to be represented by an attorney, to avoid those types of issues.

In your bankruptcy papers, you must disclose to the court all of your assets and debts, even if you want to keep a certain debt. In most cases, you are allowed to keep all your assets under the "exemption" statutes provided for by law. In other words, exempt assets are protected from the reach of your creditors and you will be allowed to keep them. However, non-exempt assets are not protected from creditors, although that can often be avoided with proper planning, which is another reason why it's a good idea to have an attorney. See the Bankruptcy Asset Protection page for more details.

If the Bankruptcy Trustee determines that you have non-exempt assets, he or she may legally sell those assets and distribute the proceeds to your creditors. Alternatively, you may purchase the assets from your bankruptcy estate, either outright in a Chapter 7, or over time in a Chapter 13. I will inform you of what risks you're facing in this regard before we file your case, and we will take every possible measure to minimize the risk and protect your assets. But sometimes, losing certain assets is impossible to prevent, in which case, you will know that going into it, and you certainly have the option of not filing at all if you're not comfortable with the risk.

If you have met all obligations in a Chapter 7 case, including redeeming, reaffirming, or surrendering your vehicle, your discharge will be granted approximately 60 to 90 days after The Meeting of Creditors. A discharge means the bankruptcy has been granted by the court and your liability for your debts has been eliminated, except for non-dischargeable debts. The Trustee or the creditors have the right to object to your case, which can delay or prevent your discharge, so it's critical that your case is handled properly.

In a Chapter 13 case, you will commence making your monthly Plan payments 30 days after your case is filed. Within a few months, we may or may not need to amend your Plan, depending on whether the Trustee or creditors object to the Plan. If objection are made, adjustments may need to be made and/or the judge will need to determine whether the plan is reasonable.

The ultimate goal is to get the Plan confirmed (i.e., approved by the Court), which happens once the Trustee and creditor objections are satisfied. Once the Plan is confirmed, your case is smooth sailing from there and you just keep making your payments each months for the duration of your Plan. You also need to provide various documentation throughout the duration of your Plan.

Your Plan can be modified in the future if your circumstances change. Your Chapter 13 can also be converted to a Chapter 7 if you qualify.

Your Chapter 13 discharge will be granted in three to five years, after all requirements have been met and all Plan payments have been made, with the exception of non-dischargeable debts.

 

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We are Proud to be a Designated Debt Relief Agency under Federal Law and We Provide Legal Assistance to Consumers Seeking Relief Under the Bankruptcy Code.

The information contained herein is for informational purposes only. It is not intended to constitute legal advice or to create an attorney-client relationship. We do not make any recommendations or endorsement as to any legal issue or procedure discussed. The nature of any particular legal issue should be considered on a case-by-case basis, and the information described herein is not necessarily a guide to your individual circumstances. It is advised that you seek independent legal advice to determine your particular legal needs.

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