The first and often hardest step is deciding to file bankruptcy. After that, it’s a matter of following a set series of steps toward getting your financial life back on track and moving forward with far less stress than you’ve been experiencing up until now.
I heard I have to attend credit counseling. Is that true?
What you heard is sort of true. What you have to do is get a credit “briefing” from an agency approved in the district where you expect to file bankruptcy. Our office recommends Debthelper.com.
This credit briefing outlines the available opportunities for credit counseling and informs you of other alternatives to bankruptcy that you might consider.
The credit counselor does not have to approve your decision to file bankruptcy. However, if you fail to get this briefing or to meet the narrow exceptions to the credit counseling requirement, your bankruptcy case will be dismissed.
You can get the briefing either online or by phone, and if your income is low enough, the fee can be waived.
What kind of paperwork do I need to provide?
Your bankruptcy attorney will begin your case by filing the following with the Bankruptcy Court and paying a filing fee:
- The bankruptcy petition,
- Schedules of assets and liabilities, and
- A statement of financial affairs.
In order to help your attorney put together this paperwork, your biggest task will be to figure out all the names and addresses of ANYONE who might have a legal claim against you and list all of the different assets you own.
The schedules the attorney will prepare list your assets, debts, projected income and expenses, and some of your recent financial history.
To file Chapter 7 bankruptcy, you will have to pass something called the means test – which compares your income to that of other people in your area. Your attorney can help you work out whether or not you pass – and don’t assume that you won’t because the calculations are a little different than they first appear.
Do I have to show up in person?
You will be required to appear for at least one meeting of creditors – called the 341 Meeting. At this meeting, the Bankruptcy Trustee and any of your creditors have the option of coming to the meeting to ask you questions under oath about your financial affairs.
How long does the whole process take?
Generally, it takes between 3 and 6 months from the time you file for Chapter 7 bankruptcy for the discharge order to be issued. During that time, you generally don’t have to do anything besides attend the 341 Meeting of Creditors and complete any financial management education required by the Court.
The most time-consuming part of filing bankruptcy is at the very beginning – gathering all the information to complete the schedules necessary to file your case.
Once your discharge is issued, all debts that existed on the date you filed Chapter 7 bankruptcy, or that can be traced to events that occurred before the case was filed, are wiped out.
You don’t have to go it alone – an experienced bankruptcy attorney can guide you through the process and make sure everything is done right – so you can finally relax. It’s free to chat with me about your options –