Bankruptcy is a very real answer to many debt problems, but it can be confusing. The process requires people to go to Court, which can be intimidating. Luckily most people are only required to appear in Court once, and the hearing is very informal. Still yet, the idea of having a Court looking at your financial picture is a tough pill to swallow for some, and the idea that a legal remedy is needed to get out of debt can scare a lot of people away from this very beneficial option to manage overwhelming debt. But, if you have a little background information, the process becomes more appealing.
Three major components to every bankruptcy case, whether it is a Chapter 7 or a Chapter 13, include:
- The bankruptcy petition: this is the initial filing, and it is where a debtor will list out their debts and their income. A list of creditors is also included in the petition, and that is how the Court knows which lenders to give notice to that you have filed a case. The petition will also include a portion where you declare how certain debts will be treated, like whether you will reaffirm your house or car payments, or whether those pieces of collateral will be surrendered back to the lender. Your attorney will prepare your petition with the documents you provide, so be sure you have a complete list of everyone you owe when you sit down with your attorney. After your petition is prepared, you will be given a chance to look it over for accuracy before it gets filed.
- The 341 hearing: this is the only hearing most debtors go to after filing a case and it is where the trustee will ask a few questions about what lead you to need to file a case. Your creditors also have the chance to be at this hearing, and the only ones that appear are usually your secured lenders who will ask if you intend to reaffirm your debt with them.
- Entry of discharge: this is the official notation that your debts are no longer due, unless they have been reaffirmed. This is the goal of every case and the Court will enter the discharge once all of the assets have been administered. In a Chapter 7 case it usually takes around 3 to 6 months for entry of discharge to be made, and in a Chapter 13 discharge is entered after the Plan is completed.
If you are in over your head with bills it might be time to talk about filing a bankruptcy case. We will look over your information and let you know whether you qualify for a Chapter 7 or a Chapter 13, and prepare the right type of case for you.
For more information about how to manage debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.