Filing for bankruptcy can get complicated. It involves completing bankruptcy forms and providing a plethora of information to the court. There are also bankruptcy court hearings and other procedures you must follow. To help you navigate through these processes in Waco, a skilled bankruptcy lawyer by your side would be valuable.
Below is an overview of the steps in declaring bankruptcy:
Step 1: Attend credit counseling in a U.S. Trustee-approved agency.
Within 180 days before you file for bankruptcy, you should complete a credit counseling course. Make sure that the course provider is approved by the U.S. Trustee’s office and be ready to spend $25 $35 for the course. If you cannot afford credit counseling, you may be eligible for discounts or even a free course.
Step 2: Submit your bankruptcy petition with the federal court.
You must file your petition for bankruptcy and pay the filing fees to the federal bankruptcy court in your jurisdiction. Make sure that you also declare your income, all debts, and assets owned. After filing, the bankruptcy court shall issue an automatic stay order, which will halt all creditor collection activities. If you’re dealing with foreclosures or repossessions, you can get protection from an automatic stay. It will be illegal for any creditor to give you a call, email, or make any other demands. Your lenders will only be able to reach you through your bankruptcy attorney. If you have already filed for bankruptcy within the last 12 months, note that an automatic stay will not be put into place or will be limited.
Step 3: Attend a meeting with your creditors.
Sixty days after filing your bankruptcy petition, you will have to appear in a hearing called the 341 meeting of the creditors, which will likely be in a meeting room. It will be attended by you, the trustee, your bankruptcy attorney, and creditors. However, it is rare for creditors to attend this meeting. Typically, the trustee will ask you questions to check the information you submitted in your bankruptcy petition.
Step 4: Take another debt counseling course.
After meeting with your creditors, you will need to take a second debt counseling course. This will help you understand your current finances and manage your debts moving forward.
Step 5: Wait for the court to confirm your eligibility for bankruptcy.
The court shall review your bankruptcy information along with any factors presented at the meeting of creditors. If you are filing for Chapter 7, the bankruptcy court will check that you passed the Means Test. But if you are filing for Chapter 13, then the bankruptcy court will review the total worth of your secured and unsecured debts to determine if you qualify.
Step 6: Have your debts handled by the court.
If you are deemed eligible for bankruptcy, the court shall handle your debts based on the chapter of bankruptcy you are requesting. If you are declaring Chapter 7 bankruptcy, the court may require the liquidation of your properties to pay off creditors. But if you are declaring Chapter 13 bankruptcy, you will be asked to draft a proposed payment plan. In the end, the court shall require you to pay certain debts and discharge eligible debts.
