Bankruptcy Lawyer 

When filing for personal bankruptcy, debtors have several decisions to make. One of the most important is the chapter of bankruptcy they will file for. Once this decision has been made, debtors can truly understand what the process will look like moving forward. Filing for bankruptcy isn’t an easy decision to make, and it certainly shouldn’t be taken lightly. For many, bankruptcy is the only option for debt relief. As The Law Offices of Neil Crane will share, there are several steps involved in filing for bankruptcy. It may be helpful to have an experienced lawyer assist with advocating for the debtor’s needs and guiding them through each step until a resolution is finally reached. The following are key steps to take when filing for bankruptcy:

Consider Your Options

Financial difficulties are consuming and can impact nearly every aspect of a person’s life. Experiencing constant calls from creditors and using credit cards to cover daily expenses can leave debtors feeling shameful and overwhelmed. Before choosing bankruptcy as an option, it’s essential to explore all possibilities. Although it may seem hopeless, it may be possible to experience debt relief through consolidation rather than bankruptcy. 

Engage in Debt Counseling/Education

When pursuing bankruptcy, debtors must engage in debt counseling and education within 180 days of filing for bankruptcy. Debt counseling will confirm that filing for bankruptcy is the only option. Once the course has been completed, debtors will receive a certificate of completion. It’s important to note that debt counseling is a two-part course taken before filing for bankruptcy and after bankruptcy has been filed. The second course provides an education that is imperative to prevent the debtor from experiencing financial challenges in the future while also providing critical information regarding how to rebuild their credit after bankruptcy. 

Gather Key Documents

Financial documentation is needed when assessing whether bankruptcy is the best option and when completing the proper bankruptcy paperwork. Necessary documents include:

  • Retirement Account Information
  • Two Years of Tax Returns
  • Documentation of All Property and Assets
  • Bank Statements
  • Pay Stubs
  • Vehicle Information
  • Child Support Information
  • Alimony Information

Consult with a Lawyer

Bankruptcy can be stressful and complicated. It’s only natural that debtors want to retain as much of their property and assets as possible. A lawyer can offer many advantages for those considering bankruptcy. They can listen to the needs of their clients, assess their financial situation, and help determine the proper bankruptcy chapter to file for. With a legal professional, debtors can have an advocate in their corner, offering critical representation by protecting their client’s assets from creditors. 

Choose the Chapter

One of the decisions that will need to be made is the right chapter to file for. There are typically two options for most personal bankruptcies: Chapter 7 and Chapter 13. The type chosen depends upon the financial standing of the debtor. Chapter 7 is a total liquidation, meaning all debts are wiped clean, allowing for a fresh start. Exemptions can be made to enable the debtor to retain some of their assets. However, much of what is owned will be liquidated to pay off creditors. To access Chapter 7, debtors must meet specific qualifications. For example, debtors must engage in credit counseling, pass the means test, and have not previously filed for bankruptcy. Chapter 13 is the wage earner’s plan and is the best option for someone who does not qualify for Chapter 7 and would like to retain some of their assets, such as their home. With this plan, debtors can reorganize their debts and pay them off over 3-5 years. 

Bankruptcy Trustee

A bankruptcy Lawyer will share that once the proper paperwork is filed and a bankruptcy trustee has been assigned, they will review the details and make recommendations. In Chapter 7, their role is to distribute proceeds from the debtor’s assets to creditors. In Chapter 13, trustees manage monthly payments and distribute them to creditors. 

The 341 Meeting

The 341 Meeting, also called the meeting of the creditors, occurs approximately one month after bankruptcy is filed. These are relatively short meetings where information is reviewed with the trustees. In some cases, creditors may attend, but this is relatively rare. Typically, once the 341 meeting has occurred, there are a few loose ends to tie up, and then the bankruptcy case is officially settled. However, keep in mind that those who filed for Chapter 13 will still engage in their repayment plan for 3-5 years before their case is officially resolved.