The Bankruptcy Process
Filing a bankruptcy petition can be an uncomfortable process for a lot of people, at least at first. My goal is to turn discomfort into relief. Getting rid of debt can reduce stress, allow you to meet personal and financial goals, and, putting it simply, help you thrive. The steps below are an example of a process crafted to give an individual (i.e., non-business) filer the best bankruptcy experience possible. Below them is a description of the various bankruptcy types.
When all is said and done, I hope you will find that you were treated respectfully by everyone involved, that you understood what was happening the whole time, and that your decision to hire me was a good one.
Step 1: Consultation
Just a quick thirty minute to one hour chat. I don’t charge for consultations, and you don’t need to show me any documents at this point. I will ask you some general questions about what property you own and what debts you owe. From that information I can tell you if bankruptcy is a good option for you; it’s not the best choice for everyone. With the pandemic still lurking, I am conducting meetings via Google Meet. If you don’t have access to a Meet-capable device, let me know and we can work out some other sort of properly socially distanced meeting.
Step 2: Interview
If you decide to work with me, after an initial payment, we will have a longer meeting. It may end up being the most painful part of the bankruptcy process, because you will have to listen to me drone about bankruptcy theory. I will also ask detailed questions about your finances, property, and debts. Then I’ll go over a checklist of needed documents, which brings us to the next step….
Step 3: Homework
You’ll go through the checklist I gave you and find copies of all the documents listed. This is an important step, because without this stuff you won’t be able to get your discharge. The quicker you get these back to me, the quicker I file your case and your debts are discharged. You will also take a couple of online classes about personal finances.
Step 4: Filing
Once I’ve collected all your documents and prepared the petition, it will be time to file it with the bankruptcy court. After you’ve paid in full, I will draft the petition, schedules, and statement of financial affairs. Then I’ll get your signature on everything that needs it and file it all, along with your court filing fee.
Step 5: Meeting
For most bankruptcy filers, the closest they will come to going to court is the creditors’ meeting. About a month after your case is filed, you will attend a meeting with your case’s trustee, the person who represents unsecured creditors. It’s a quick meeting in which you will answer questions about your property and financial affairs. Most people find there was very little to worry about, but some are nervous before the meeting. So, a few days before, you and I will meet to do a dress rehearsal. I’ll advise you on what the trustee will ask and how to answer the questions.
Step 6: Discharge
About two months after your creditors’ meeting, the court will review your file and, in most simple cases, grant you the discharge you asked for in the petition. Most of your unsecured debts will disappear - you will have no more legal obligation to pay them - and you can get on with enjoying your fresh start.
In cases with many higher-income debtors or debtors who have more property to protect, you will make payments for either three or five years before the Court grants your discharge. The remaining debts will still disappear, though!
Bankruptcy Types
The Bankruptcy Code is tailored to the needs of many different types of debtors. A quick explanation of the basic types is below. Bankruptcy can provide relief to both individuals and businesses who are having trouble making payments on their loans. If you’d like to know more about Bankruptcy Law, you can read more here.
Individuals
Whether you have an unbearable amount of credit card debt, a medical bill you just can’t afford, or got in over your head with payday loans, you can still file. The Code doesn’t care why you are filing, as long as you meet its requirements. For those with little exempt property, Chapter 7 liquidation can get you in and out quickly. If you have non-exempt property or make too much money (a good problem to have!), Chapter 13 might be the right option.
Businesses
If you run a business, you know how tough it can be to meet payroll and pay for current expenses while making payments on your operating or capital loans. A Chapter 11 bankruptcy can help you restructure your debts and keep your business running. Or, if it’s time to move on, you can liquidate your assets and pay off your creditors in a Chapter 7.
Farmers and Fishers
Congress recognized that family farms and commercial fishers have unique issues that require a specialized type of bankruptcy. Chapter 12 can help restructure a family farmer’s debts and keep the land for future generations.