If you are considering the possibility of bankruptcy, below is some general information concerning the process. For more detailed information specific to your situation, please contact our office to schedule a consultation.
To begin the process, you are required to complete a Credit Counseling Course. It can be taken online or over the telephone. There are several companies that provide these courses, however the company must be approved by the Court in order for the course to be valid. You cannot file your bankruptcy until this is done, and it must be completed within 180 days of filing bankruptcy.
The moment a bankruptcy is filed, an injunction called “the automatic stay” immediately arises. This prevents creditors from taking any action against you that is an attempt to collect a debt without first receiving permission from the Bankruptcy Court. That means, creditors cannot call you, write you, sue you, garnish your wages or take any steps to collect a debt that you owe without permission. If you file bankruptcy and a creditor calls you, please inform them that you have filed and have them contact my office. If they continue to bother you, please contact my office as soon as you can.
Within 20-30 days, you will be required to attend your First Meeting of Creditors. You will be notified of the exact date and time within a few days of filing. At the First Meeting of Creditors, you will be placed under oath and asked a few questions by the Trustee. It is also the opportunity for any creditors to ask you questions. The most common questions asked are as follows:
- Did you provide your attorney all of the information necessary to prepare your petition and schedules?
- Is all the information contained in your petition and schedules correct?
- Did you list all of your assets?
- Did you list all of your debts?
- Have you ever filed a bankruptcy before?
- Do you owe a domestic support obligation such as alimony or child support?
- Did you read and sign your petition before it was filed?
- What is your income?
- How are you paid?
- Do you own a house or land, and if so, do you know what the house/land is worth?
Depending upon the specific circumstances, there may be ways to protect certain property like a car or home. If the Debtor qualifies and the Creditor agrees, a Debtor may enter into a “Reaffirmation Agreement”. This allows a Debtor to keep his or her property and continue to pay for it just as if he or she had not filed bankruptcy. Again, you should consult with an attorney about your special set of circumstances to see if a reaffirmation agreement is right for you.
In some cases, Chapter 13, also known as a “Reorganization” bankruptcy, is the right approach. In Chapter 13 cases, the Debtor will propose a payment plan to pay back all or part of his or her creditors. In most cases, the Debtor will keep certain property like a car and/or house.
Whether you are filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, the goal is to receive a discharge of your debts. This means you do not have to pay the debts you have listed in your bankruptcy and no creditor can sue you to try to collect that debt. There are some types of debts, however, that are non-dischargeable. They include, but are not limited to, most taxes and student loans; debts incurred to pay nondischargeable taxes; domestic support and property settlement obligations; most fines, penalties, forfeitures, and criminal restitution obligations; certain debts which are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs. Also, if a creditor can prove that a debt arose from fraud, breach of fiduciary duty, or theft, or from a willful and malicious injury, the bankruptcy court may determine that the debt is not discharged.
For more information about bankruptcy and whether it is the right option for you, please contact us to schedule a consultation.
King & King, PLC is a debt relief agency. We help people file for bankruptcy under the bankruptcy code.