The Bankruptcy Process
How You Can File for Bankruptcy
If you have become overwhelmed with your current financial situation and there seems to be no way of escape, you should consider bankruptcy. Despite all of the negative myths that have been spread about bankruptcy, it is one of the best ways to discharge your debt. Bankruptcy has grown dramatically in popularity in the last decade, and thousands upon thousands of people filing for bankruptcy every year in order to find the debt relief they desperately need to move forward with life.
The first step in the bankruptcy process is determining which type of bankruptcy that you want to file for. There are significant differences between a Chapter 7 and
Chapter 13 bankruptcy, and I will take the time to go over these options with you in detail. I provide you with all of the necessary information to make an educated decision, and from there we can move forward with your case in a timely manner.
To begin your bankruptcy process, you must gather the necessary paperwork and itemize your current income sources, any major financial transactions for the last two years, monthly living expenses, unsecured and secured debts and all property. This can be an extensive process and you will also be required to collect your tax returns for the last two years, documents to any loans that you have and the deeds to your real estate. I can assist you with gathering all of this information so that you are confident that nothing is missing.
From there, we will work together to determine what property is exempt from seizure based on Florida Bankruptcy Laws. This is especially important because your bankruptcy petition could be jeopardized if your creditors or the judge finds out that you have not been entirely forthcoming about your exemptions. In order to actually file, I will help you file a two-page petition and other forms with the Clearwater district bankruptcy court or the closest bankruptcy court in your area. It typically costs around $274 to file for Chapter 7 bankruptcy and approximately $189 to file for Chapter 13 bankruptcy.
Once your paperwork is filed by the court, your creditors will automatically be placed under an automatic stay. This provision prevents them from making direct contact with you or claiming any possession of your property from the day that you filed forward. Filing for bankruptcy will also stop any foreclosure proceedings. Any debts and property that are not covered by Florida exemptions will be legally taken by the court. At this time, the court will also appoint a trustee to your case to see that your creditors are paid as much money as possible. The trustee will also review your paperwork and may challenge any element of your case that seems inconsistent or wrong. The trustee will also call the first meeting of creditors approximately one month after your filing, and you are required to attend this meeting.
What can I expect at the 341 meeting of creditors?
The next step in your bankruptcy case is one that usually causes the most stress and anxiety for my clients, but this is because of several misconceptions. Even though this is called the "meeting of creditors", creditors usually do not show up. If you have a business with partners, investors or a local creditor or if you owe money to a spouse, creditors are more likely to show up. Creditors are also more likely to appear if you owe back taxes to the State or Federal government or if you have pledged an asset as security for a debt that you owe. The majority of objections brought by creditors are resolved by negotiation between the debtor's attorney and the creditor, but a judge can intervene if a compromise cannot be reached.
Most creditor meetings last for five minutes or so. If you filed for Chapter 7, your case will not involve non-exempt assets. If it does, however; you will turn over non-exempt property to the trustee after the meeting. If the trustees and creditors have not challenged your right to discharge within the 60 days following the meeting, then you will receive a notice that your dischargeable debts have been discharged in about three to six months.
Contrarily, you will need to attend a hearing before a bankruptcy judge if you filed a Chapter 13 plan. The judge will confirm or deny the repayment plan, and from there you will be responsible for making payments until the end of your term. Once all of the payments are made, you will be debt free. For further answers to questions about the bankruptcy processes and life after bankruptcy, call my firm today!