Starting the Typical Bankruptcy

Also known as liquidation bankruptcy, it is the most common type filed under the Bankruptcy Code. A chapter 7 allows a debtor to cancel most of their debts. Debtors are allowed to keep certain property called "exempt" property. Your assets up to certain values will be considered exempt and these things you get to keep. A debtor who has retained an experienced and knowledgeable bankruptcy attorney will find that they can keep all their property in most cases.

In a chapter 7, the bankruptcy attorney will meet with the debtor and obtain from them the various information necessary to proceed with the case. This can be done in person or remotely depending on the desire and circumstances of the client. Please click  below to see the typical requirements for the meeting. The bankruptcy attorney will begin constructing the bankruptcy petition. Once the petition is completed and the debtor has attended the credit counseling class, the debtor will sign the papers and the attorney will file with the court.

Sometime before filing the petition, the debtor will be required to attend a "credit counseling class". The class is a short non-complicated class that is offered in person as well as over the internet. The fee is usually between $15 to $25 dollars. The debtor will receive a certificate of completion. The class is easy and quick ; roughly an hour and provides simple tips about financial management from your financial situation.

As soon as the bankruptcy attorney files the petition he receives an appointment for what is known as the "341 creditors' meeting". This occurs  3 to 6 weeks after the petition is filed. Most Creditors' meetings are simple and quick, Literally a few minutes. The meeting is run by an administrator known as a "trustee", an official who works for the court and manages most of the details in a bankruptcy. You will appear on the designated date and time with your attorney for this meeting. Due to Covid, the meetings are frequently being held remotely via phone or zoom. Other debtors filing for bankruptcy will be at the meeting. When your name is called you will be sworn in and the trustee will ask you some questions. Typically the questions are routine and not complicated; information you have already provided in writing the trustee wishes to confirm.  Your creditors have a right to appear at this meeting and ask you questions, but rarely do any show up.

As soon as the bankruptcy attorney files the petition the debtor is eligible to take the second bankruptcy class known as the financial management course or "debtor's education class. Much like the first class it is short, easy and inexpensive. The purpose is to provide you debtor education for finances. The fee is typically $10 to $25 and is usually done over the internet. Many companies offer to file this with the BK court for you but your attorney will always provide this service to you as part of your bankruptcy fee.

So now that the Creditor Meeting has concluded everything is over, right? Well, almost. In the overwhelming majority of cases what happens after the meeting is wait time for your bankruptcy to end. There is 60 days of time for somebody like a creditor to have an objection and file it with the court. Again this rarely happens in routine cases and your bankruptcy attorney can usually flag those special circumstances when there might be issues. Provided nobody objects you will receive your discharge within  a week or two after that 60 day period. The discharge is the document which indicates your debt is to be eliminated. The case subsequently is closed and your bankruptcy is finished.