From the very start
First, if you have not yet consulted a bankruptcy lawyer, now is the time to do so. Never file for bankruptcy uninformed or without legal counsel. Knowledge and representation are crucial in the bankruptcy process for a straightforward reason: they are your best chance for a positive outcome.
When declaring bankruptcy, you will be required to submit a petition. This document is crucial for determining how the remainder of your case will proceed. This document describes your financial situation in terms of your income, assets, creditors, and debts. The more specific your description is, the better. The court requires this information to obtain an understanding of your situation, despite the fact that many individuals fear revealing such financial information. When asked to enumerate their finances and assets, many individuals become anxious for fear of losing them to creditors. Keep in mind that the purpose of bankruptcy is to get you back on your feet, not to deprive you of your possessions. Many of your essential and valuable possessions are exempt from liquidation under bankruptcy exemption laws. Never try to conceal or misrepresent information on your petition.
The court will determine if you are eligible for bankruptcy protection once your petition has been lodged. For a Chapter 7 bankruptcy, you must satisfy a means test to demonstrate that your income is insufficient to cover debt repayment. The means test formula compares your income to the median income of the state in which you are filing. If you pass the means test, you are eligible for Chapter 7 bankruptcy, provided you have not filed for bankruptcy within the past six years. If you fail the means test, you will be eligible to file for Chapter 13 unless your unsecured debts exceed $336,900, your secured debts exceed $1,010,650, or you have filed for bankruptcy within the past two years.
If the court accepts your case, you must pay the appropriate filing fees and complete a credit counseling course. If you fail to complete these two simple stages in a timely manner, the completion of your case will be significantly delayed. You are also required to attend a 341 Meeting of Creditors, where you may be questioned by the trustee or your creditors. This meeting is to ensure that creditors have been given the opportunity to argue their case before the court. However, the majority of people discover that creditors rarely attend unless the debts are substantial. If you file for Chapter 7 bankruptcy, the court will determine which of your debts are dischargeable and which of your nonexempt assets will be liquidated to satisfy your debts. Any liquidation orders issued by the court will be carried out within a few months before your case is closed. In Chapter 13 bankruptcy, the court will devise a repayment plan that you must adhere to in order to receive a discharge. In many instances, the Chapter 13 plan will last up to five years, at the conclusion of which the discharge order will be issued.""
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