Maybe you’ve decided that bankruptcy is the right choice for your family. What’s your next step? This step-by-step guide outlines what to expect throughout the bankruptcy process and what your responsibilities are along the way.
Step 1. Discuss Bankruptcy Options with An Attorney
Though you can represent yourself, bankruptcy cases can be incredibly complicated. For that reason, I always recommend that you hire an attorney. Depending on your income level and the amount of debt you have and your assets, you can choose Chapter 7 or 13 bankruptcy. It’s important to discuss these options with a lawyer, since Chapter 7 and 13 have their own specific requirements, and each provides different benefits. While a Chapter 7 bankruptcy allows for a full discharge of debt without any repayment, a Chapter 13 bankruptcy permits you to keep some of your assets while making monthly payments.
Step 2. Get Your Documentation to Your Attorney
Your attorney will let you know what is needed to proceed with bankruptcy. You will be expected to provide information on your household income, credit card debt, secured debt, assets, and investments. Most attorneys will also need you to complete a questionnaire.
Step 3. Take a Credit Counseling Course
Anyone planning on filing bankruptcy must take a credit counseling course before filing. The course is completed online or over the telephone. The company will provide a certificate of completion, which must be provided to your attorney and filed with the court.
Step 4. Review and Sign Your Petition and Schedules
After you’ve provided all documents to your attorney and taken the credit counseling course, your attorney will have prepared your bankruptcy petition and schedules. You will meet with the attorney to review the petition and schedules, make any changes, and sign the papers under penalty of perjury.
Step 5. File Your Bankruptcy Petition
You must file an official bankruptcy petition with the court, along with all the required schedules and statements. This is usually done electronically from your attorney’s office. Failing to include all of the necessary documentation can delay or stop the process, and working with a bankruptcy attorney can ensure that you get everything right the first time.
Step 6. Attend the Creditors Meeting
After you file bankruptcy, a trustee is appointed to your case. The trustee will mail you a notification of your creditors meeting. While creditors are permitted to attend this meeting, most do not. You will need to attend, answer your trustee’s questions, and provide any supporting documentation.
Step 7. Make Your Plan Payments if you filed a Chapter 13 Case
Chapter 13 is an income-based debt consolidation and three-to-five year repayment plan. In order to get a discharge, you will need to make the monthly payments required by the plan for that three-to-five year period. There is no repayment plan in Chapter 7, which means this step is skipped if you file bankruptcy under that chapter.
Step 8. Take a Financial Education Class
The final step before discharge is a bankruptcy financial management course. This class aims to help you manage your finances after bankruptcy. Like the pre-bankruptcy course, this course is completed online or over the telephone. Here too, the company will provide a certificate of completion, which must be filed with the court.
Step 9. Discharge Granted
If you meet all of the requirements and the court approves it, your discharge will be granted.
This process sounds like a lot of work, but you can save a substantial amount of time by working with an attorney. Doing so can also help you minimize your stress as you go through this major financial change. Remember, bankruptcy represents a fresh start for you and your family. While the process can be stressful, you will come out of it stronger and ready to start a new stage in your financial future.Ready to take the next step and file bankruptcy in North Carolina? Contact Blossom Law today at (704) 271-9078 or online to discuss your options.