The following are the 10 steps you will go through if you decide to follow a Chapter 7 Bankruptcy with our office.
The First Step – The Free Consultation
You contact us and schedule a free consultation.
During our free consultation, we will discuss your options in bankruptcy and non-bankruptcy options that may be available. If Chapter 7 Bankruptcy is an option for you, we will determine our fee based on the facts of your particular situation. We consider such factors as whether you are filing with your spouse, the total amount of your debt, the type of debts you have, the amount of money you earn (whether you are over the median income), and whether you own real estate or a business.
The Second Step – Retaining our Services
If you wish to retain our office to represent you in a Chapter 7 Bankruptcy, we will prepare a retainer agreement. Upon signing the retainer agreement, you will be required to pay a minimum of $200 as a deposit, which is also known as a retainer fee. You will pay the balance of our fee in a monthly amount of at least $200 until the fee is paid in full. We will provide you with detailed instructions regarding the information that we will need to prepare your bankruptcy petition. Once you have retained our law office, you should stop paying the bills that you intend to be discharged in bankruptcy. You should also tell your creditors to call us and to stop calling you. If you prefer, we will call your creditor for you to tell them to stop calling you.
The Third Step – Taking the First Class
When you have paid our fee in full, you will need to complete the first of two required classes, Debtor Counseling. This class must be taken within 180 days of the filing of your petition. Expect the class to take from 2 to 3 hours to complete. It is offered either online or via phone. It is also offered in Spanish.
The Fourth Step – Preparing you Bankruptcy Petition
Once you have completed the Debtor Counseling class, you will visit our office for a few hours, bringing the information that we will instruct you to bring, so that we may prepare your bankruptcy petition. Once your petition is completed, you will sign it.
The Fifth Step – Filing your Bankruptcy Petition
Once we complete and you sign your bankruptcy petition, we will file it with the Bankruptcy Court. The moment that we file your bankruptcy petition, an automatic stay will be issued through the Court that will stop your creditors from taking or continuing collection and legal actions against you. This means that, if your wages are being garnished or if your bank accounts have been frozen, the creditor must stop such actions. If any money is taken from you once we file your petition, the money must be returned to you. A hearing will be scheduled for 4 to 6 weeks later.
The Sixth Step – Your Second Class
Once we file your bankruptcy, you must also complete a second class entitled Personal Financial Management. If you do not complete yourPersonal Financial Management class within 45 days of your bankruptcy hearing, your petition will be denied. This class, as the previous one, will take 2 to 3 hours to complete, may be taken either online or via phone, and is offered in Spanish.
The Seventh Step – The Hearing
At the hearing, you will be questioned by bankruptcy trustee, who is a court-appointed attorney to handle your case. The bankruptcy trustee will question you regarding your assets and your debts. The questioning usually takes about ten minutes. If the bankruptcy trustee is satisfied with your answers and has no further questions, the trustee will "close" the meeting, and no further appearance will be needed. However, if the bankruptcy trustee has further questions that cannot be answered at that time, you will be required to attend a second hearing that will be scheduled to occur approximately two weeks later.
The Eighth Step – The Wait
During the two months after the date of the 341 meeting, your creditors will have the opportunity to file an objection with the Bankruptcy Court regarding the discharge of their debt. Such objections are usually filed when a debtor has made significant and recent use of credit before filing bankruptcy, especially if few payments were made. We will not file a petition for bankruptcy for a person who has committed such acts. If an objection by a creditor is threatened or filed, it is usually resolved through a negotiated settlement.
The Ninth Step - The Discharge of Debt
Approximately four months after filing your petition, you should receive your discharge from the Bankruptcy Court. The discharge states that you are not legally liable for your discharged debts. You should save the discharge notice and a copy of your petition for at least the next ten years, because they will be your proof that you are not obliged to pay the discharged debts. You will then be ready to embark on your fresh financial start and to rebuild your good credit.
Please note, once you obtain a discharge, you may not file another Chapter 7 Bankruptcy for a period of eight years from the date of your prior filing even if you encounter new financial problems during that period. However, you may file a Chapter 13 Bankruptcy four years after filing a Chapter 7 Bankruptcy in which you received a discharge.
The Tenth Step – Rebuild your Credit
Typically, within a year of receiving your discharge you can expect an increase of your FICA score by approximately 100 points. You will likely receive offers for new credit cards. Select one or two of the best offers and open new accounts. Use the credit cards and be sure to pay them in full every month. If you need, you can also get an auto loan. By establishing new credit accounts and paying them on time you will quickly rebuild your credit.