The Bankruptcy Process
The Initial Bankruptcy Consultation
Whether it’s through e-mail or telephone contact, the process begins when you contact our office to receive more information regarding bankruptcy relief. At that time, you will speak with one of our attorneys or trained paralegals to discuss with you in detail your problems as well as potential remedies that may exist. At that time, we will attempt to identify potential options and discuss with you all concerns you may have regarding your current situation. Oftentimes, we will advise that bankruptcy may not be an appropriate option and may discuss other options with you. If bankruptcy is appropriate, we will usually be able to discuss the cost of filing as well as the appropriate paperwork we need to see to evaluate your case. If appropriate, a consultation will then be scheduled with one of our attorneys. If you retain our firm for representation, all creditors’ calls will be directed to our office and you will have no further contact with creditors.
The initial consultation may be the most important part of the process. At that time, your situation will be fully evaluated by one of our experienced bankruptcy attorneys and all appropriate remedies will be discussed. The differences between a Chapter 7 and a Chapter 13 bankruptcy will be outlined and we will carefully listen to your concerns and attempt to address those concerns. Typically, the initial consultation will take approximately 1 to 1-1/2 hours (or longer if needed). Often, people who have multiple properties or who own a business involve more comprehensive initial consultations. Consultations are only conducted with one of our experienced attorneys.
Following the Consultation
If, at that time, it is determined that a Chapter 7 or Chapter 13 bankruptcy is appropriate, a second meeting will be scheduled, your petition will have been prepared and you will be reviewing and signing the petition. Any documents that were needed and were not produced at the time of our first meeting will then be produced at this meeting. Once again, we will discuss the ramifications of both filings and will evaluate whether your circumstances have changed since the time of the first consultation. This part of the process usually takes approximately one hour. After the second meeting, your bankruptcy petition will be filed.
The Bankruptcy Hearing
Once your petition has been filed, approximately 4-8 weeks later, your case will be scheduled for a Chapter 7 creditors meeting. Prior to the meeting, our attorney will review your petition with you and represent you at this meeting. Very rarely, do creditors attend the meeting, and the hearing is conducted by a Chapter 7 Trustee. Based upon our extensive experience, we will almost always be familiar with the Trustee and will fully advise as to what you should expect at the meeting. The Trustee will review the information contained in the petition, ask for additional documents, if appropriate, and in almost all cases, will recommend discharge of your case. Thereafter, approximately 60-120 days thereafter, you will receive a discharge which will represent the completion of your case and discharge of all unsecured debt. All secured creditors in which you retained the secured property such as a home or car will remain in full effect and may be reaffirmed, and you will continue to make payments on these debts.
A Chapter 13 hearing is similar to a Chapter 7 hearing with the exception that it is conducted by one of the full-time Chapter 13 Trustees. In a Chapter 13 hearing, you will be presenting a Chapter 13 repayment Plan. This Plan is a suggested plan and will often be modified based upon later filings by creditors. Prior to the Hearing, you will receive a letter from our office outlining the terms of the Plan and the suggested payments which must begin approximately 30 days following your filing. In a Chapter 13 bankruptcy, in the month following your filing, you will resume your normal mortgage payments and often other secured payments such as car loans. These issues will be fully discussed with you at the time of your second meeting. At a later date, there will be a confirmation hearing on your Chapter 13 Plan, which you usually do not need to attend. This Chapter 13 confirmation hearing is for purposes of “confirming” that the Plan is feasible and would result in an effective reorganization for the debtor. We will make all necessary modifications to your Chapter 13 Plan in an attempt to have the Plan confirmed.
Credit Counseling and Debtor Education
Pursuant to the changes in the bankruptcy laws in 2005 (BACPA) it is now required that every debtor who files bankruptcy must complete a pre and post-filing credit counseling course. This is a one time course prior to filing and one-time course after the date of filing. This course can be done either in person, by phone, or by the internet. We will recommend credit counseling agencies at the time of our initial meeting. Most debtors have found that this process is not extremely cumbersome and is often helpful in educating the debtor about the bankruptcy process.
Other Bankruptcy Considerations
There are various issues that arise during the process which will be fully discussed with the debtor at that time. In some cases, debtors may have a loss or reduction in earnings which will affect their ability to complete a Chapter 13 Plan. Other times, the debtor may change their mind regarding their intentions of retaining a car or home. Sometimes, a debtor may inherit property, have a personal injury claim, or other substantial change in their circumstances from the date of filing. All these matters need to be fully discussed with the attorney who is handling the matter, and it is suggested that the debtor maintain contact throughout the process so that we may continue to effectively evaluate various circumstances as they arise. We believe it is essential that we maintain communication with our clients since it is ultimately our objective to serve our client’s interests as fully as possible and best protect their rights through the bankruptcy process.