Necessary Steps in Filling For Bankruptcy

The Bankruptcy Process

At first the bankruptcy process can seem intimidating. The complexity and requirements of the process can be nuanced and not always intuitive. Maneuvering through bankruptcy's many different steps can be the difference whether or not you can achieve your desired outcome or not. To help you navigate through these many hurdles you should speak with an experienced bankruptcy attorney. The following are brief outlines of the bankruptcy process depending on whether you are choosing to file for Chapter 7 or Chapter 13:

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Chapter 7 Bankruptcy

First, you will need to complete a means test to decide whether or not you are eligible for this type of bankruptcy. This will look into your yearly income and evaluate whether or not you can feasibly repay your debt. If you have qualified for Chapter 7 under the means test, you will need to complete approved credit counseling. Once these two steps are complete, you can then move forward in the bankruptcy. You will need to file an official petition with the court and include documents such as the petition itself, schedules and a "Statement of Financial Affairs." You will also need to provide a list of your creditors, your property and expenses as well as the amount and type of claims, and information pertaining to your income. After the petition is filed, in about 30 to 50 days a 341 hearing will take place, which will allow you to meet with your Trustee and creditors to answer questions they will have about your debt. This is also where you can discuss the reaffirmation of debts as an alternative to liquidation. After this meeting, creditors have 60 days to object to discharge, and if they are unsuccessful in their efforts with the courts all remaining debts will be discharged. Wait to for the case to be fully administered and closed.

Chapter 13 Bankruptcy

Prior to filing, you must have completed approved credit counseling. If you have the proper level of disposable income, you can begin by filing the petition for bankruptcy in the court. You will need to provide the petition, schedule, a "Statement of Financial Affairs," and a list of creditors, assets, liabilities, income, and expenses. You will then present your repayment plan to the court to be discussed. This plan must be spread over three to five years for repayment of your debts. First payment is due at your meeting of creditors, and must continue through the time schedule outlined in the plan. You must attend a 341 hearing to meet with your Trustee and creditors. The purpose of this meeting is to answer any and all questions they might have about both your debt and other pertinent information. Most creditors do not attend this meeting and are instead represented indirectly by the Trustee. If the plan is not objected to and after it is fully completed, your Trustee will process your discharge.

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