Bankruptcy Basics: Who's Who and What's What in Bankruptcy?

Bankruptcy is a way for individuals to find debt relief through the legal process. The extent of the relief that an individual is entitled to is based on a number of factors, such as income, amount of debt, and current financial situation. The bankruptcy "code" has been written by the federal government and is overseen by district bankruptcy courts. The bankruptcy code includes several chapters. These chapters are essentially guidelines under which an individual files for bankruptcy, and each chapter has slightly different rules about how the person's debt is handled-from a repayment plan to complete elimination of the existing debt. There are six primary types of bankruptcy filings-Chapter 7, Chapter 13, Chapter 11, Chapter 12, Chapter 9, and Chapter 15. The type of bankruptcy a person files is generally referred to by the chapter under which the case has been filed. Chapter 7 and Chapter 13 are the most commonly filed personal bankruptcies. The others are for business clients.

 

Bankruptcy Is Designed to Help You Be Successful!

Many people worry that they will feel embarrassed or unworthy if they file for bankruptcy. In fact, just the opposite is true! Bankruptcy is a process designed to help you-and everyone involved in the process-be successful.

 

Once you file for bankruptcy, your attorney can file a stay, stop those harassing phone calls and collection efforts. If creditors want to collect, they have to file a Motion for Relief, visit with the judge, and get permission to call the debtor to try to collect or to object to the case. You will experience almost immediate relief from the stress that has been plaguing you as you have tried to pay back your debt but found yourself unable to do so.

The process of bankruptcy is divided among the debtors' attorneys, the creditors' attorneys, and the bankruptcy court-including the judges, clerks, and trustees. Bankruptcy is a very cooperative process. The goal that everybody has in this process is to make sure that the debtors are successful. If the debtor is not successful, everybody loses!

 

You might wonder why the creditors' attorneys want the debtor to be successful. Well, if the debtor completes the process successfully, he or she will have a payment plan to pay those debtors. The bankruptcy judges want to see people complete the process and be successful and follow the rules. The trustees want to administrate the cases successfully. If all of the cases are dismissed, they do not have enough work to do; trustees are paid based on the number of cases that they receive and how many of them they successfully complete.

 

Bankruptcy is an exciting, energizing area of law right now. Everyone has a common interest in helping the debtor be successful. Everyone is working together with the goal of helping the debtor succeed.

 

Remember, you will need good representation from a qualified expert to help you move through this process. Don't wait because you are embarrassed. You can turn your worry into success if you get started right away.

 

What Happens after I Hire an Attorney?

Your attorney will represent you during the bankruptcy proceedings. He or she is there to ensure you get the best outcome possible under the circumstances. The following terms may help you understand how your attorney can help!

 

Retainer Agreement: First, you will sign a retainer agreement, which sets forth the terms of the representation. Think of this as the attorney's promise of loyalty to you and his or her commitment to representing you in a professional, courteous, and zealous fashion.

 

Interview/Case Evaluation: The next thing you will do is go through an extensive interview process with your attorney. During that time, he or she will attempt to understand your situation thoroughly. No two bankruptcies are the same, so it is essential that you discuss everything with your attorney so he or she can prepare for any unique issues or circumstances in your case.

 

Review of Documentation: The attorney will now give you a detailed list of the documents you need to gather to prepare the petition to file. Once you provide this information, the attorney will go over it carefully. If necessary, your attorney can help obtain legal documents, such as judgments, divorce decrees, and liens.

 

Pre-bankruptcy Counseling: This is required by the Bankruptcy Abuse Prevention and Consumer Protection Act, and your attorney will help you set it up.

 

Analysis of Legal Issues: The attorney will analyze any information that could prevent you from receiving a discharge.

 

Review of Auto and Homeowners Insurance Policies: The attorney will ensure you have enough insurance coverage to protect your creditors' interests.

 

Draft the Petition: At this step, the attorney prepares the petition, schedules, and any other documents prepared by law, including a Chapter 13 plan if you are filing Chapter 13.

 

Review the Petition: So that there are no surprises, the attorney will go over the petition with you. Be sure that all of your assets and liabilities are listed and that all information is correct.

 

File Petition: Now the petition is filed in the court, and your creditors will receive a notice of filing.

 

Serve Chapter 13 Plan: If you're filing Chapter 13, the attorneys will serve each creditor with a copy of the plan.

 

Pending Litigation: If a creditor has filed a lawsuit against you, begun foreclosure, or threatened to repossess your property, the attorney will provide him or her a Notice of Bankruptcy Filing.

 

Meeting of Creditors: Your attorney will prepare you for and attend this meeting with you.

 

Pre-discharge Counseling: You must complete a personal financial management course in order to obtain a discharge; your attorney will help you complete this course.

 

Trustee and Creditor Objections: If your trustee or any of your creditors file an objection to your Chapter 13 plan, your attorney will work toward overcoming the objection before the confirmation hearing.

 

Confirmation Hearing: The attorney will prepare you for this hearing by making sure that all documentation is correct and complete; he or she will attend the hearing with you.

 

Defense of Actions by Creditors: If one of your creditors files a motion, complaint to determine dischargeability, or any other action against you, the attorney will review it and work with you to defend against it.

 

Review of Proofs of Claim: Creditors may submit a "proof of claim," which your attorney will review and file an objection to, if necessary. Once the deadline to file such a claim has passed, the attorney will give notice to the court so it will not allow any late proofs to be filed.

 

Reaffirmation of Debts: You may decide to reaffirm some of your debts. The attorney will help you determine which ones to choose, and will then negotiate favorable terms, review the reaffirmation agreement, and appear at hearings arising from your choice to reaffirm.

 

Lien Avoidance: The attorney can file a Motion to Avoid Lien if warranted.

 

Final Case Review: The attorney will go over the entire case with you to ensure that you have satisfied all requirements necessary to obtain the discharge.

 

In addition to all of the above, your attorneys can also evaluate any other matters that may arise during the process and file motions to address them. As you can see, these can be complicated waters to navigate alone, so choose an expert bankruptcy attorney to look after your best interests. Remember: the attorney wants you to be successful!