We often hear from our clients after they reach out to get help with their debts, that they wish they would have done so much sooner.  Naturally, I too have wondered why people let their situations get so bleak prior to seeking help. I have discovered that many people receive misinformation about bankruptcy and as a result think that the process is so overly complicated and complex that they would not qualify, could get denied, or might not be able to get rid of their particular debts. This usually could not be further from the truth.

I want to make sure families and individuals get the fresh start they deserve, because often the truth is that bad things happen to good people. Whether it is divorce (going from two incomes to one), losing a job, getting sick, getting laid off, being the victim of identity theft, or just making a few mistakes that have snowballed out of control, the stressors that debt can place on individuals and families is so great that I find it necessary to shed some light on what the process is actually like when you reach out to our office for help.  

Chapter 7 Bankruptcy A Very Simple Process:

When you call or come into our office, we understand that you may have no knowledge or experience with bankruptcy laws or what it takes to get relief. Our goal is to make sure you understand the process and what is expected of you to get the fresh start you deserve. We will guide you every step of the way and make sure the process is an easy one for you and your family.

The Initial Intake Interview:

When you call our office, we will schedule a FREE consultation that we offer in person or over the phone. During this process we will take the lead and ask you questions about your personal situation and debts, as well as questions about your employment and income to determine if you qualify for bankruptcy. I find this to be a very reassuring experience for most people as they will then know their options and have a plan moving forward. During this conversation I will also answer any questions you may have. I will help you determine which chapter will be most beneficial for your situation, whether a spouse may need to file jointly (for which we do not charge any additional fees), and let you know what the bankruptcy will cost and what is required to get the process underway.

You can retain our firm by making a payment on our fees and signing our retainer agreement. At this point we will open a file for you, and you can start giving our law firm’s name and number out to the creditors who are calling and harassing you (getting these calls off your back alone can help relieve a great deal of stress). Also, if you happen to get sued, we can often file an answer in that case on your behalf to delay a final judgment while you finish paying off the fees and getting the rest of the paperwork back to us.

The Paperwork:

The bankruptcy case is started when we file an official petition, schedules, and statement of financial affairs with the court (don’t worry we will handle the preparation of all these documents). These forms require you to list all your debts, all your assets and some recent financial history.

We rely on our clients to get the information to our office to prepare these documents. That is why this is the most involved step for our clients. The documents that we need are as follows:

• A Recent Credit Report for Each Person Filing (free to pull online)
• A Questionnaire Filled Out (provided by our office)
• A Certificate of Completion of Credit Counseling Class (can be taken online or over the phone)
• Copy of Most Recently Filed Tax Return (if required to file)
• Last 6 Months Paystubs (if employed)
• Proof of Additional Income (social security, retirement, or VA statement, rental income, self-employment income etc.)
• Last 3 Months of Bank Statements (for open bank accounts with your name on it)
• Copy of IDs (driver’s license and social security card)
• Any Additional Bills or Lawsuit Paperwork (things you may want us to include or just look at for peace of mind)

Once ALL these documents have been received by our office, the ball is now back in our court, and we will start drafting your schedules. Typically, we can have the paperwork prepared in a week or two (sometimes sooner if there is a wage garnishment or foreclosure that we are trying to stop). Once the paperwork is prepared, we will reach out to schedule an appointment to review it with you and have you sign it.

Going Over the Paperwork and Filing the Case:

An attorney at our office will go over the paperwork with you present or over the phone. During this process we are verifying the accuracy of the information contained in the paperwork and making any required changes to the documents prior to filing them with the court. This is typically an appointment where clients need not bring anything and typically only takes 30-45 minutes. Once we are finished reviewing everything and making any necessary changes the case is filed, we obtain a case number for your case, and we mail you a copy of all documents.

As soon as the case is filed, the automatic stay goes into effect. The automatic stay protects you from all further creditor collection efforts. The court appoints a trustee and gives notice to all creditors listed on your schedules that your case has been filed (you will also receive this notice). This will give you some additional breathing room.

The Court Hearing:

The dreaded court hearing, which many of our clients get very nervous or anxious about typically only lasts for 5-10 minutes. This hearing is called a §341 Meeting of Creditors. During this hearing creditors have an opportunity to ask you questions under oath, but in all actuality, creditors very rarely show up. The trustee (yes, I said trustee, as most clients never actually have to go before the actual Bankruptcy Judge) will ask some standard questions that they are required to get answers to under oath. These questions are not overly complicated, and we will go over what to expect regarding these questions prior to the court hearing (typically the day before). Better still, I will be present at this hearing and can help if there are any moments of confusion or concern.

Once the trustee asks her questions, she will conclude the hearing and you will be free to go.

• Covid update: As of the time of this writing, these §341 hearings have been conducted via telephone. Which has provided an extra layer of comfort for many clients, who can call in from the luxury of their own homes, and do not have an audience present and listening to the details of their case. Due to this change, I find that now is an excellent time to file for those who may get nervous or anxious about court hearings.

After The Court Hearing:

There is a Sixty (60) day waiting period from when the §341 hearing is concluded until the discharge is entered in the bankruptcy case. This gives us time to square away a few last minute items, such as:

• Cooperating with Trustee Requests for Additional Documents - Usually minor in nature if any, perhaps an additional bank statement or a copy of a divorce decree or life insurance policy etc.
• The Second Class - There is a second course that is a follow up to the first course that will need to be completed prior to the court granting your bankruptcy discharge (don't worry this is the last one).
• Filing Reaffirmation Agreements- These are agreements with certain creditors that we have our clients sign when they want to keep a debt and are agreeing to continue to make payments and want to have the debt continue to report to the credit bureau. These debts are not discharged in the bankruptcy.  These are typically auto loans or mortgages, but can include furniture payments, secured credit cards or even small credit cards where the client banks. Reaffirmation agreements can be used as an effective tool to help re-establish credit after the bankruptcy.

The Discharge and Conclusion of Your Case:

The moment you have been waiting for and the conclusion of your case is when the discharge order comes in. At this time, I will reach out to ensure all creditor harassment has ceased and to answer any questions you may have regarding your case. This is usually a day of celebration, and the first day to your much deserved start fresh. The process as you can see is relatively simple for most people, however, some cases may be more complex or involved than others. Our firm is here to help no matter what issues may arise and we will guide you through the each step of the process. If you would like to discuss filing for bankruptcy relief to get the fresh start you deserve, please contact our office at (850) 438-6603 to schedule your free consultation.