Filing for bankruptcy is often a necessary step for individuals facing overwhelming financial difficulties. While the process can seem daunting, understanding each step can help you feel more in control of the process. If you require assistance filing for bankruptcy, contact an experienced bankruptcy lawyer today.
Assessing Your Financial Situation
The first step in the bankruptcy process is to thoroughly evaluate your financial circumstances. This includes gathering all your financial documents, such as bank statements, credit card bills, loan documents, and any other relevant financial information. Understanding your total debt, income, and expenses will help determine which type of bankruptcy is most appropriate for you. Consulting with a lawyer is an important part of this process. A skilled attorney can provide valuable insight into your situation and help you understand your options.
Mandatory Credit Counseling
Before you can file for bankruptcy, you are required to complete a credit counseling session from an approved agency. This session typically lasts about an hour and can be done online, over the phone, or in person. The purpose of this counseling is to review your financial situation and explore possible alternatives to bankruptcy. Upon completion, you will receive a certificate that must be filed with your bankruptcy petition.
Filing The Bankruptcy Petition
Once you’ve completed credit counseling, the next step is to file your bankruptcy petition with the court. This petition includes detailed information about your financial situation, including your income, expenses, assets, and debts. It also includes various schedules and forms that must be filled out accurately. Attorneys such as our colleagues at Resolve Law Group can attest to the importance of professional assistance during the process of filing for bankruptcy.
Filing the petition officially starts the bankruptcy process and triggers an automatic stay, which halts most collection activities against you. This means that creditors are generally not allowed to pursue further collection efforts, such as phone calls, wage garnishments, or lawsuits, while the bankruptcy case is pending.
Meeting Of Creditors
After your bankruptcy petition is filed, you will be required to attend a meeting of creditors, also known as a 341 meeting. This meeting is typically held about a month after filing and is conducted by the bankruptcy trustee assigned to your case. During the meeting, the trustee and any attending creditors will have the opportunity to ask you questions about your financial situation and the information provided in your bankruptcy petition. Your lawyer can attend this meeting with you to support you and guide you through the process.
Discharge Of Debts
The final step in the bankruptcy process is the discharge of debts. In a Chapter 7 bankruptcy, this usually occurs about four to six months after filing, while in a Chapter 13 bankruptcy, it happens after you have completed your repayment plan, which can take three to five years.
A discharge releases you from personal liability for most of your debts, meaning you are no longer legally required to pay them. Some debts, however, such as certain taxes, student loans, and child support, are not dischargeable in bankruptcy.
After receiving your discharge, it’s important to take steps to rebuild your credit and financial health. This may include creating a budget, monitoring your credit report, and making timely payments on any remaining obligations.
Contact A Lawyer Today
Filing for bankruptcy is a significant step that can lead you towards a better, more free financial future. When taking this step, having professional guidance is crucial. Contact a lawyer today to discuss your situation.