The Seven Step Bankruptcy ProcessDue to the confusion and fear of the bankruptcy experience I have set forth my SEVEN STEP PROCESS to explain the bankruptcy journey and where it leads. The first four steps deal with what happens before you file and the remaining three steps deal with what happens after you file. Your financial matters have gotten so distressing that you know you must do something. You are confused and baffled by the enormity and detail of the information available. You must at this point start to help yourself and consult with a bankruptcy professional. Calling our office is the beginning of reorganizing your affairs so that you can have peace of mind and regain control of your life. (The steps below outline a normal Chapter 7 bankruptcy case.) I. STEP ONE: At the initial meeting with one of our attorneys you will be fully informed of the bankruptcy process, what you must do and what you can expect from your attorney. There is no charge for the initial meeting. The meeting will last approximately 45 minutes. At this meeting:
II. STEP TWO: Once the decision to take the next step has been made, we must get to work and decide what type of bankruptcy is best for you. Most likely you will be considering either a Chapter 7 or a Chapter 13 bankruptcy. To make this decision we must fulfill a requirement of the bankruptcy laws known as the MEANS TEST. This is a new requirement of the bankruptcy code and requires you provide me with complete information about your income and complete data about your expenses. You may have to do some digging. Once I get this information I will be able to do the calculations necessary for the means test and we may be able to decide which chapter is right for you. Once we have received the information from you and have done the Means Test calculations we will get together and go over the situation. To get started and complete Step Two you will have to have available $750.00 for legal fees. III. STEP THREE: Now we should know with some certainty:
IV. STEP FOUR: Once the case is filed what happens? While your next involvement will be attending what is known as the “341” meeting, which will be someplace between 20 and 40 days after the case is filed, two very important things have occurred.
V. STEP FIVE: After the meeting you will have to attend a “341” meeting. What is the “341 meeting”? The number “341” simply means that paragraph number 341 of the bankruptcy code provides, in part, that the Trustee will have a meeting, which you MUST attend, where the Trustee and any creditors who want to attend may ask you questions about your assets. Since we will have done a thorough job in preparing the bankruptcy petition and its schedules and will have met with you and prepared you for the “341” the meeting should not have any surprises. We will have to get together for approximately a half an hour sometime before the meeting and go over what will happen. We will then attend the meeting with you. Typically the Trustee’s meeting is short. The Trustee is not a Judge and while the meeting can be informal in nature it is very important and is not to be taken lightly. Once the meeting is over, depending on the particulars of your case the process is essentially over. You will receive in the mail a “discharge” from the bankruptcy court. At this point the Trustee no longer has control over the assets you have retained. VI. STEP SIX: Under the new bankruptcy act, there is now an additional requirement for post petition financial counseling. Frankly, at this point the whole procedure is so new that there is no definite information about what this will entail. There is no need to delay in seeking the relief provided by the bankruptcy system due to this. By the time your case has reached that far, we will have all of the necessary information and be able to help you conclude the process. VII. STEP SEVEN: The official process is now over. What has happened and what do you do now? Essentially your financial life has been restructured. You should be able to pay your bills and start rehabilitating your credit. We have several helpful tips and handouts to help you with this process. While Bankruptcy and the Bankruptcy process is sometimes hard and debilitating, it can and should be the new “fresh start” for you and your finances. Our office is with you the entire way, advising you, answering your questions, and handling your relationship with the bankruptcy court and the bankruptcy process. (We would note that the “Seven Steps” outlined above are generalized and do not fit every case. Each Bankruptcy case has its own facts and circumstances. Hence since no two cases are alike, the Seven Step Process will necessarily differ for each case. If you have decided to file a Chapter 13, there are two additional steps; the legal fees are higher; and the process takes more time. The Chapter 13, in most cases, presumes that you will retain your assets and make payments to the Chapter 13 Trustee.) |
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