If you are overwhelmed by calls from creditors and terrified of your house being foreclosed, bankruptcy might be the right option for you. Many people cringe when they hear the word “bankruptcy.” They think of it as a sign of failure. But it isn’t! At Hedtke Law Group, we think of bankruptcy as a fresh start. It’s a way to find relief. When you’re overwhelmed by your financial situation, bankruptcy provides a lasting solution.
So, if you’ve decided that you’re ready to file for bankruptcy, how do you begin? Today we’re breaking the process down into eight easy steps.
Lawyer up. Don’t try to do this on your own. A bankruptcy lawyer can guide you through the process and help you steer clear of mistakes.
Choose which chapter to file under. Most bankruptcies are filed under Chapter 7 or Chapter 13. Business cannot file under Chapter 7, but individuals can choose between the two. There are benefits and drawbacks to each, and an attorney can help you make the right decision.
Complete pre-bankruptcy credit counseling. You are required to receive counseling from a nonprofit agency that has been approved by the U.S. Trustee’s office. This must occur in the 180-day period before you file your bankruptcy.
Fill out forms and file your bankruptcy petition. You will fill out numerous documents detailing your finances. You’ll need to disclose income and expenses, property values, debts, and more. If you file under Chapter 7, you must demonstrate that you can pass the means test. For Chapter 13, you must draft a repayment plan.
A trustee is appointed. The court will assign a trustee to your case. This person will look over your documentation, check for fraud, and distribute nonexempt property to creditors.
Your bankruptcy continues according to the chapter under which you filed. Under Chapter 13, you attend a meeting of creditors and a confirmation hearing, then follow your repayment plan. Under Chapter 7, your nonexempt property may be sold to repay creditors, and you handle your secured debts.
Take a financial management course. You must take a class in debtor’s education. This will help you gain skills for avoiding financial crisis in the future.
You are granted a discharge and your case is closed. Any remaining balances on your credits are wiped out. The court may or may not hold a discharge hearing. Then your bankruptcy process is finished!
There you have it – relief is only eight steps away. As we mentioned in Step 1, this is not a process you should enter into without the help of an experienced bankruptcy lawyer. If you’re ready for your fresh start, or even just interested in learning more, contact Hedtke Law Group today. We are here to help you in difficult times.