STEP 1: Consult with a credit counseling expert or attorney
First, review your options with a credit counseling expert or an attorney. Consumer Credit Counseling Service is a national non-profit organization that will provide a comprehensive analysis of your financial situation, and make recommendations to you regarding your debt. Another good advisor is a bankruptcy attorney who can also provide you with a comprehensive look at your financial circumstances and make helpful recommendations regarding your options.
STEP 2: Retain a bankruptcy expert
Second, if you decide that you are going to file bankruptcy, then your next step is to hire a bankruptcy attorney. This involves calling the attorney and setting up an appointment to discuss your financial situation. In a joint case, both husband and wife should attend the appointment. After examining your ability to pay, you and your attorney can decide the type of bankruptcy that will best suit your needs. At the initial consultation, you will need to bring the following: all of your bills, the most recent and current wage statement(s) from your employer, and your gross income as reported on your federal income tax return for the previous three years prior to the year in which you are filing bankruptcy. If your year of filing is 2004, then your tax returns for 2001 & 2002& 2003 (if they are available) need to be brought to your appointment.
STEP 3: Prepare the petition, schedules and statement of financial affairs
Your attorney will prepare a bankruptcy petition to file with the court. The petition states the type of bankruptcy that you wish to file, and it requests relief from the court. In addition, the attorney and you will prepare schedules of all of your assets, liabilities, income and other matters. In Chapter 13, a plan for repayment will be prepared. A statement of financial affairs will then be prepared as proof of your need for relief. The attorney will assist you in preparing the paperwork.
STEP 4: Attending the creditors meeting
You will be required to meet with a Bankruptcy Trustee (and any creditors who may wish to attend). Any creditor who wishes to appear at the meeting may appear and ask you questions about your financial affairs and circumstances. The trustee will examine the petition, the statement of financial affairs and all or your schedules to determine if you own any non-exempt property that could be sold. In the event that you own no non-exempt property or in the event that the trustee considers the asset to be burdensome, then the trustee will either declare the case to be a no-asset case or abandon the burdensome asset and declare the case to be a no asset case.
In a Chapter 13 case, if you file one, then the trustee will meet with you and your attorney to review your Chapter 13 plan. The Trustee will also perform the same duties as a Chapter 7 Trustee, except that the Chapter 13 Trustee will not liquidate non-exempt property. The Chapter 13 trustee will verify the information that you have provided in the schedules and statement of financial affairs and will determine whether the plan accurately represents your ability to re-pay your net disposable income . The trustee will also determine whether the repayment schedule is reasonable and whether you can perform under the plan. Creditors are allowed to attend the meeting and ask any questions about your finances and your financial circumstances, including the feasibility of the plan, and the amount of the plan payment.
STEP5: Closure
In Chapter 7, the case is usually closed within 90-120 days. Once it is concluded, the debtor receives a discharge. It is likely that you will not have to return to the court after the initial meeting. Unless the case is unusually complex, you usually will receive your discharge approximately 75-85 days after the date of the meeting. In Chapter 13, the plan could last for up to five years. |
