Bankruptcy Steps

Summary of the Chapter 7 Bankruptcy Process (General overview, varies by case)

STEP 1: Familiarize yourself with the bankruptcy process:  A chapter 7 bankruptcy involves filing a bankruptcy "petition" with the court to substantiate your position of financial hardship.  This page has some of the steps involved in preparing your bankruptcy petition and explains generally the court process.  More information can be found at:    

       Watch a video summary: VIDEOS – Bankruptcy Basics.

       Read the court's booklet:  Booklet – Information for Persons Considering Filing Bankruptcy.

      Read the bankruptcy blog for different topics and subjects: Bankruptcy Blog.

      Review alternatives to bankruptcy:  Bankruptcy Alternatives.

STEP 2:  Complete your bankruptcy questionnaire and gather documents:  To prepare your bankruptcy information you will need to provide our office with financial information.  You will need to obtain copies of the following information (preferred if you can email PDF copies):

  • Client bankruptcy "questionnaire"
  • Pay stubs / Income Statements / Profit & Loss statement for the past 7 months
  • 2014 & 2015 Tax returns – state and federal
  • Investment account statements
  • Bank statements and checkbook registers for all checking and savings accounts maintained covering the sixty (60) days prior and through and including the date your case was filed
  • Credit card statements
  • Loan statements for cars and home

STEP 3:  Obtain a copy of your current credit report:  To ensure that you list all of your creditors in your bankruptcy petition obtain a current credit report.  You can acquire a copy of your credit report from one of the Credit Bureau Agencies:

STEP 4:  Take your 1st credit counseling course:  As part of the bankruptcy process you will need to do a pre-bankruptcy filing credit counseling course.  Also, once your bankruptcy petition has been filed you will then need to do a post-bankruptcy filing debtor's education course.  These can be done over the phone or online and take about 2 hours.  There a several companies that provide credit counseling, their services should be similar and the prices prices may vary between $10 – $40.  

For example:  www.debtoredu.com or www.SummitFe.org 
Other credit counseling companies can be found on the U.S. Department of Justice's website

STEP 5: Prepare Bankruptcy Petition:  Upon receipt of your completed questionnaire and financial information our office will prepare your bankruptcy petition.  Our office will provide you with a copy for you to review for accuracy. 

STEP 6:  Meet and review bankruptcy petition and process: After preparation of your petition, a time will be scheduled to sit down with the attorney to go through the petition page by page to review any issues and to ensure accuracy.  After the petition is finalized, you will sign it and it will be filed with the court.  The court currently charges a $335.00 filing fee.  You can pay your filing fee in full at filing or request to pay your filing fee on a payment plan with the court.   

POST FILING:

STEP 7:  File Petition with Bankruptcy Court:  Once your petition is finalized, reviewed, and signed by you, our office will ensure that your petition, schedules, and attachments are filed with the court correctly and on time per FRBP Rule 1007.   After your petition is filed with the court you are now under the protection of the bankruptcy court's "automatic stay" (11 U.S.C. 362) which means that creditors must stop their efforts to collect on any debt owed to them, including calling you.  You will receive after filing your petition:

  • Court Case Number
  • Court date for 341 Meeting of Creditors
  • Reminder to take your 2nd counseling course "Personal Financial Management" and court Form B23.

STEP 8:  Take your 2nd Credit Counseling course:  After your bankruptcy petition has been filed with the court you can take your second credit counseling course referred to as your "Personal Financial Management" course.  There are different companies that offer this course (see STEP 3).  This must be done within 75 days after your petition is filed or your case will be dismissed without receiving a discharge.

  • Send our office your certificate proving you took the class or the completed Form B23 if your credit counseling compnay did not issue a certificate.

STEP 9:  Prepare and attend the the 341 Meeting of Creditors:  Prior to the 341 Meeting of Creditors you should do the following:

  • Read the United States Department of Justice bankruptcy pamphlet
  • Have proper Identification (ID) ready. 1.)  Drivers License 2.)  Social Security Card (or other Government issued ID with your Social Security number.  No passports).

After the meeting of creditors there is a waiting period of approximately 60 prior to the issuance of the discharge.  During this time frame there is a deadline set by the court for creditors or others to object or challenge a debtor's discharge of certain debts.  Also, there is a deadline set by the court for any objections to a debtor's use of exemptions.   This information can be found on the court's "Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors & Deadlines".

STEP 10:  Address issues, if any:  After you attend the 341 meeting of creditors and after you take your 2nd credit counseling course, most clients are typically done.  However, in some cases there are additional issues that need to be addressed or finalized such as:

  • Provide additional documents to the bankruptcy trustee
  • Asset cases
  • Adversarial complaints / Challenges to Dischargeability
  • Audit by US Trustee
  • Reaffirmation Agreement
  • Motions (Abandon / Redeem / Avoid Lien / other)

STEP 11:  Bankruptcy Discharge and Final Decree:  The bankruptcy discharge is typically issued by the court 90 days after your bankruptcy petition is filed.  If there aren't any issues with your case then the court will close your case and issue a final decree.

 

NOTEThese steps are intended as a general overview and each client's case may vary and you should consult with an attorney regarding your particular case.