Your Steps Ahead Toward Debt Relief Through Bankruptcy
Filing for bankruptcy is not uncommon for overwhelmed debtors. If you decide that filing bankruptcy is your surest way out of unmanageable debt, you will not be alone. Individual details may vary, but your personal bankruptcy process may go something like this:
- You will meet with a debt relief lawyer to determine whether bankruptcy or bankruptcy alternatives suit your case.
- Your attorney will help you fulfill the required means test to determine whether you can file a Chapter 7 (liquidation) bankruptcy or a Chapter 13 (debt restructuring) bankruptcy.
- If you decide to go ahead with a Chapter 7 or Chapter 13 bankruptcy, you may enter into an attorney-client relationship with a retainer fee.
- Your lawyer will likely give you an assignment to create a detailed financial inventory of all income, assets, debts and payment schedules.
- Your attorney will advise you on financial strategies for getting through bankruptcy.
- Once you have paid your attorney’s complete required fees and compiled a complete list of debts and creditors, he or she will help you file for Chapter 7 bankruptcy. (If you file for Chapter 13, attorney’s fees will be built into monthly payments over three to five years).
- Upon filing, you will be fully protected by the automatic stay, which prohibits creditors from attempting to collect on your debts.
- You will need to take a government-required credit counseling course, possibly online.
- The bankruptcy court will give you an appointment for a 341 meeting of creditors before a trustee of the court. (Note: creditors rarely appear).
- If you filed Chapter 7, you will wait a few months after the 341 meeting to receive a bankruptcy discharge of most or all of your consumer debts.
- If you wish to, and are able to, keep your car and/or house, you may submit a reaffirmation of the remaining balance of those debts.
- If you filed Chapter 13, you will make affordable payments over a three- to five-year period, covering secured debts (like back pay on your home mortgage) and some portion of your unsecured debts (like credit card bills). If all goes well, at the end of the repayment period, you will receive a discharge for remaining unsecured debt balances.
- You will enjoy a financial fresh start and can begin rebuilding your credit right away.
This abbreviated, partial outline is presented as an illustration. Your bankruptcy journey will likely differ according to factors in your case. If you must liquidate any personal or business property, your attorney and/or the bankruptcy trustee will advise you on the details.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.