The Bankruptcy Process
This may seem daunting and overwhelming to you, but believe us when we tell you that once you file your bankruptcy a huge weight will be lifted off your shoulders and even more so when your bankruptcy is finally granted by a court. Filing for bankruptcy is serious process and because it will likely result in eliminating thousands of dollars of debt, bankruptcy court’s have strict requirements to ensure that those who seek protection under the bankruptcy laws are doing so in good faith. The following is typical step-by-step bankruptcy process for a Chapter 7. Please keep in mind that not all cases are exactly alike and there may be slight deviations in the outlined process below.
1. Complete the Bankruptcy Qualification Assessment: In this stage, you will be asked a series of questions necessary to determine your eligibility for bankruptcy protection. (Estimated completion time: 15 minutes)
2. Consult With One Of Our Bankruptcy Attorneys: After checking your eligibility, its time to discuss your situation with one of our bankruptcy attorneys. Our professionals will ask you a series of questions and advise you on which type of bankruptcy you should file. We will also advise you on the pros/cons of filing a bankruptcy. (Estimated completion time: 15-30 minutes)
3. Purchase Bankruptcy Package & Sign Legal Services Agreement: After speaking with our bankruptcy professionals, you will be asked to review and sign our legal services agreement and process your payment for your bankruptcy. (Estimated completion time: 5 minutes)
4. Complete the Bankruptcy Intake Questionnaire: Next you will need to fill out a more comprehensive questionnaire that will provide us with all the information we need to start file your bankruptcy. This is probably the most tedious part of the process for you, but a “necessary evil” to ensure your bankruptcy is not delayed, or worse, dismissed for failure to report critical information. (Estimated completion time: 30-60 minutes)
5. Complete the first “Credit Counseling Course”: Individuals who are filing a bankruptcy must go through an approved Credit Counseling Course. This course is quick and can be taken online. Without a certificate of completion from an approved provider, your bankruptcy will be dismissed. Once you take the course, a certificate will be sent to us. The course must be taken within 180 days of filing the bankruptcy. We recommend Abacus Credit Counseling (www.abacusscc.org). (Cost $25; Estimated completion time: 15-30 minutes).
6. Pull Your Credit Report: as part of your Bankruptcy Package, we will pull your current credit report. This will help us complete a thorough list of all your creditors to assist us in completing the necessary paperwork to be filed with the court. Keep in mind, a creditor report will not show any “off the books” debt, i.e. personal loans with other people. You are responsible for reporting these to us and you must do so under the law.
7. Gather Necessary Documents: several documents are required in order to (a) complete the necessary documents to be filed with the bankruptcy court; and (b) to provide to the bankruptcy trustee. (Estimated completion time: 30-60 minutes).
8. Review Completed Petition, Schedules, & Statements: There are various forms that we will complete for you based on the information you have provided us: the petition (the actual request for bankruptcy), schedules and statements (documents that list assets, liabilities, creditors, property claimed as exempt, etc.) and your declaration certifying that everything is true and correct (which you will need to sign). The typical bankruptcy filing is about 30-50 pages long and will take you about 45-60 minutes to review.
9. File Bankruptcy: Once all the necessary paperwork is complete and verified, we will file your bankruptcy and pay the necessary filing fee (included in your bankruptcy package payment).
10. Attend Creditors Meeting: About 30 days after filing your bankruptcy, you (and your spouse if filing jointly) will need to attend a “Creditors Meeting”. This is usually the only formal proceeding at which you must appear and it is usually held at the offices of the U.S. trustee nearest you. This meeting is informally called a “341 meeting” because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property. While creditors can attend, in our experience, the normally do not. However, the trustee may will you several questions during the meeting regarding your assets, liabilities, and may ask you questions about documents (i.e. the petition, schedule, and statements) filed with the court. (Estimated time: 30 minutes to 2 hours – depending on waiting time). The goal is for the trustee to “close” the Creditors Meeting at the end of the meeting if no changes/amendments are required. Once the meeting is “Closed”, it’s mostly a waiting game for you.
11. Reaffirm Certain Debts: if you wish to retain certain assets like your primary mode of transportation (subject to the court’s approval), we will contact that lender and fill out the necessary paperwork to “reaffirm” the contract and allow you to continue paying these debts.
12. Revise Necessary Paperwork: sometimes the trustee will require changes or amendments to the bankruptcy filing. If necessary, we will make any required changes/amendments to the filings. During this amendment process, the Creditor’s meeting stays “open” and you may be called back for a follow up meeting. Usually this is not required if all amendments/changes are in accordance with the trustee’s instructions.
13. Complete the Post-Filing Debtor Education: this course is required in order to finalize your bankruptcy. It is required by the courts. You can take this course online through Abacus Credit Counseling (www.abacusscc.org). (Cost $35; the course length is a minimum of 2 hours).
14. Obtain Discharge: once the Creditor’s meeting is close, the trustee will determine what assets (if any) will be sold to pay off creditors. In most cases, the trustee will make a determination that there are no assets to be sold and will make a “Report of No Distribution” (among other things) to the bankruptcy judge. Assuming there are no motions/objections filed by any creditor or other third parties, the bankruptcy judge will eventually “discharge” your debts and order the case closed.
Depending on the complexity of your case, the entire process can take about 4 months from the filing of your bankruptcy until the court discharges your case..