Have you reached the point where it seems impossible to gain control of your finances without filing for bankruptcy? Many people know that bankruptcy is an option, but they don’t understand how this process works. Before you move forward with a bankruptcy filing, it’s important to talk to an experienced attorney for support.
Here are a few important steps you will follow in the bankruptcy process:
1. Bankruptcy Counseling: In the state of California, you are required to complete pre-bankruptcy credit counseling. This course is designed to determine whether bankruptcy is necessary, and also educate individuals about their financial options.
2. Filing the Bankruptcy: When you decide to move forward, the next step is to file the petition. This step is the most complicated because you need to follow strict guidelines in categorizing your assets and debts. The best solution is to hire a bankruptcy lawyer to create this filing for you. Your attorney will ask questions about your financial situation, then summarize the details on the filing document. If you filed Chapter 13, you will also have to prepare a Plan for repayment of your debts over time.
3. Protection from Creditors: Now that the bankruptcy is filed, you benefit from a court order – an automatic stay that stops your creditors from contacting you about the debts. This notification not only halts debt collection efforts, but it also steps collection proceedings (like lawsuits).
4. Creditor’s Meeting: Within a month or two, you and your attorney will be involved in a creditor’s meeting where creditors have the option to question you regarding your Bankruptcy Petition. It’s not common for creditors to attend the Creditor’s Meeting, but the window of time is open if a creditor wants to contest a bankruptcy discharge.
5. Ongoing Education: Even though you already attended pre-bankruptcy credit counseling, additional education is required before the bankruptcy is finalized. This course teaches you principles about money management, budgeting, and using credit wisely.
6. Notice of Discharge: Finally, the bankruptcy is finished and the debt is discharged. Depending on whether you have a Chapter 7 or Chapter 13 petition, you might have ongoing obligations, such as an agreed payment plan if you filed a Chapter 13.
The bankruptcy filing process usually takes several months, and it’s important that you have a trusted team to help you navigate this situation. Call us for help: Miles & Hatcher, LLP offers a free consultation if you are considering a bankruptcy filing: (909) 481-4080.