BANKRUPTCY IN GENERAL
Bankruptcy laws help people who can no longer pay their creditors get a fresh start – by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation.
Most cases are filed under the three main chapters of the Bankruptcy Code – Chapter 7, Chapter 11, and Chapter 13. Federal courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in a state court.
Whether you have been affected by a job loss, divorce, medical expenses or overwhelming credit card debt, you may be in the position of being unable to cover your current debt and don’t see too many options to handle your situation. Our office is here to let you know that you do have options, and many of them can be discussed with you in our first confidential and free initial consultation. Our firm will work closely with you to determine your financial situation and recommend the best options for your circumstances. By providing you easy to understand choices with respect to your particular debt situation, together we can work out how to alleviate your condition and get you back on the right track.
THE BANKRUPTCY PROCESS
Prior to filing your bankruptcy case, you must participate in a mandatory credit counseling course. There are several options available, including taking the course in-person, over the phone or via internet. Once that course has been completed, when filing for bankruptcy, our office will need all of your income and expense information, including all of your creditors, in order to properly fill out the Petition, any Schedules, and your Statement of Financial Affairs. All assets and liabilities must also be noted. Together, we will assist you in obtaining contact information for all of your creditors (including obtaining copies of your credit reports) in order to ensure that all of them are properly notified of your bankruptcy filing. Once your case has been filed, your creditors will no longer be able to contact you regarding collections.
Once filed, your case will be assigned a to bankruptcy “trustee,” whose job it is to review your case and make sure that you are in compliance with relevant sections of the Bankruptcy Code. In a Chapter 7 bankruptcy case, the trustee will review your assets and if warranted, can confiscate non-exempt assets for liquidation. In Chapter 13 cases, you will make your monthly plan payment directly to the trustee. You will also need to provide the trustee with financial documents as requested by him/her. Obviously, we will be there with you every step of the way to make sure you are in constant compliance with the bankruptcy statutes and requests from the trustee.
Approximately 30 days after your case is filed, you will be required to go to the Bankruptcy Court in downtown Kansas City, Missouri, to attend the Meeting of Creditors. It is rare for any creditors to appear at this meeting, although it can occur. At the meeting (which usually takes about 10-15 minutes), the trustee will place you under oath and ask questions about your bankruptcy filing and the documents you provided in response to the trustee’s request(s). Our firm will attend this meeting with you and prepare you for any questions you could be asked.
The goal of the bankruptcy case is to obtain a discharge from the Bankruptcy Court. Upon receiving the discharge, you are no longer liable for the debts that are listed in your bankruptcy schedules. Prior to receiving your discharge, though, you must complete a Financial Management course. Our office will advise you on how and where to take this course. Again, there are several options available, including taking the course in-person, over the phone or via internet.
In Chapter 7 bankruptcy cases, you should receive your discharge approximately 60 - 90 days after your Meeting of the Creditors. In Chapter 13 cases, you will not receive your discharge until after you successfully make all payments provided for in your Chapter 13 Plan. This occurs after the plan is complete. Most Chapter 13 plans take 3 to 5 years to complete.
Please feel free to contact us today to further discuss the bankruptcy process and any other options you may have.Chapter 7 bankruptcy is a very straightforward process. In sum, it typically consists of six (6) steps:
Step 1: Before filing, complete a mandatory credit-counseling course by phone or online.
Step 2: File the official bankruptcy forms, listing all your property and creditors and providing information about your income and financial transactions during the previous two years.
Provide the bankruptcy trustee with a copy of your most recently filed income tax return, plus any other documents the trustee asks for (these typically include documents such as vehicle titles, bank statements and recent pay stubs).
About 30 days after you file, attend a creditors’ meeting (with your attorney), usually the only personal appearance you’ll have to make during this process. The creditors’ meeting occurs in a small hearing room and is conducted by the trustee. Again, creditors seldom appear. At this meeting, you are required to answer (under oath) any questions the trustee has about the information in your papers, or provide other information the trustee thinks is relevant. A typical meeting lasts about 10-15 minutes.
No later than 60 days after the creditors’ meeting, you must attend mandatory budget counseling (usually by phone or online) and file a simple form telling the court that you have completed it along with a certificate of completion from the counseling agency.
Step 6: Remain in a holding pattern (don’t operate a business with inventory or sell or give away any property without the trustee’s permission) until the court sends you a written discharge of your debts. That will come about 60 to 90 days after the creditors’ meeting. During that period, creditors can, but seldom do, object to your getting rid of a debt. The trustee arranges for you to turn over nonexempt property, if you have any. Many people who file for bankruptcy don’t have any nonexempt assets, which means you can usually keep most (if not everything) you own.
Give us a call today (816.230.5550) to schedule a free, initial consultation to thoroughly discuss all of your bankruptcy options.