The Bankruptcy Process Overview

Here is a brief overview of what you can expect from your initial bankruptcy interview:

1.  Collect Information

To complete your bankruptcy filing you will need to collect all of your personal financial information. This will include a list of all your secured and unsecured debts (you might find ordering your credit report helpful), tax returns for the last two years, deeds to any real estate you own, car titles, and any loan documents you may have. 

However, there is no need to delay scheduling your free consultation with me until after you assemble this documentation.  During our initial meeting, I will personally meet with you in order to get to know you better and answer all of your questions. 

2.  Get Counseling

To complete your bankruptcy,  federal law requires that you to seek consumer credit counseling from an approved counseling agency within the six months prior to filing for bankruptcy protection. The goal of counseling is to ensure that you have explored all possible debt solutions before resorting to bankruptcy as the most suitable option.

3.  Decide How to Proceed

The two most common bankruptcy types are Chapter 7 and Chapter 13.  Chapter 7 bankruptcy involves the liquidation of your non-exempt assets while Chapter 13 bankruptcy is a repayment plan. In order to be eligible for Chapter 7, you must qualify under the guidelines of the court instituted Means Test.

I will review your options with you and help you determine the best choice for your situation.

4.  File the Petition

Once your best option has been identified, you will complete (through my office) official bankruptcy forms known as "schedules."  The schedules require that you describe your current financial condition and recent financial transactions (usually within the last two years). For a Chapter 13 bankruptcy, a proposed repayment plan must also be submitted with your petition. After the schedules are complete and necessary documents from step one above are assembled, the bankruptcy petition will be filed by my office with United States Bankruptcy Court for the Northern District of New York. Once filed, an "Automatic Stay" goes into effect and collection efforts by your should cease.

The court fee for filing a Chapter 7 bankruptcy is $306.00 and the court fee for filing a chapter 13 bankruptcy is $281.00.

5.  The Meeting of Creditors

Shortly after filing the petition, you will be notified of the first meeting of creditors, often called a "341 meeting." This meeting will be scheduled for a day that is about a month or so after the original filing date.  The Chapter 7 Bankruptcy Trustee assigned to your case will preside over this meeting and ask you questions about the contents of your bankruptcy schedules. You are required to appear at this meeting, provide proof of your identity and social security number, and answer questions under oath about your assets and liabilities.

Most 341 meetings are brief and uneventful; the debtor does not have to justify filing bankruptcy; no rights are won or lost at this meeting. Creditors are invited to the meeting and are permitted to ask the debtor questions under oath, though in most cases they do not attend. If there are no objections from the trustee or the creditors, you will receive a notice from the court, usually within two to three months, that the bankruptcy is discharged.

6.  Evaluating Your Assets

In a chapter 7 case, the Chapter 7 Trustee will determine whether or not there are assets that can be liquidated and used to repay your creditors. If the trustee determines that all of your assets are exempt, a report of "no distribution" will be filed with the court. If the trustee determines that there are non-exempt assets, they will be sold and payments may be made to your creditors. In a chapter 7 case, you may never have to pay a creditor back. In a chapter 13, you will be required to enter into a 3 to 5 year payment plan, in which you will pay creditors as much as you can over time, taking into consideration your disposable income under the Means Test.

7.  Notice of Discharge

The 60th day after your meeting of creditors is the deadline for creditors to formally challenge the discharge of your debt(s). If no challenges are filed, you will receive notification of a discharge of debt shortly after that 60th day. A discharge signifies that you have no further obligation to repay the discharged debt and that your creditors can never attempt to collect the debt from you in the future.

If you filed under Chapter 13, you will receive the notice of discharge approximately 30 to 60 days after your final payment has been made and the trustee ensures your payment plan has been followed and completed. Not all debt is discharged in a chapter 7 or 13 case, including student loans and certain taxes, so you may not be completely relieved of the obligation to repay all debt. Whether or not a debt is discharged depends upon certain Bankruptcy Code provisions and, with respect to some debts, whether or not a creditor succeeds in convincing a judge that your debt to that creditor should not be discharged.