Thomas K. McKnight - Filing Bankruptcy in Tustin, California
The Bankruptcy Filing Process
There are several legally required steps involved in filing for bankruptcy. Failing to complete them can lead to the dismissal of your case.
Prior to filing for bankruptcy, people are required to complete a credit counseling session and obtain a certificate to file with their bankruptcy petition. The counselor needs to assess your personal situation, provide guidance on budgeting and debt management, and discuss alternatives to bankruptcy. You can find the names of government-approved credit counseling agencies in your area by calling the federal bankruptcy court closest to you or by visiting its website.
Filing for bankruptcy involves submitting a bankruptcy petition and financial records showing your income, debts, and assets. You will also be required to submit a means test form, which determines whether your income is low enough for you to qualify for Chapter 7. If it isn't, you will need to file for Chapter 13 bankruptcy instead. You will also have to pay a filing fee, though it is occasionally waived if you can prove you can't afford it.
You can obtain the forms you need from the bankruptcy court. If you enlist the services of a bankruptcy attorney, which is generally a good idea, they should also be able to provide them.
Once you have filed, the bankruptcy trustee assigned to your case will schedule a meeting of creditors, also known as a 341 meeting for the section of the bankruptcy code where it is mandated. This is a chance for individuals or businesses that you owe money to ask questions concerning your financial situation and your plans, if any, to repay them.
Your case will be determined by a bankruptcy judge, based on the information you have provided. If the court determines that you have attempted to conceal assets or committed other fraud, you may not only lose your case but additionally face criminal prosecution. Unless your case is very complicated, you generally won't have to show up in court before the judge.
After you have filed for bankruptcy-- but before your debts can be discharged-- you need to take a debtor education course, which will offer guidance on budgeting and money management. Again, you will have to receive a certificate showing that you have participated. You can get a list of accepted debtor education providers from the bankruptcy court or from the Justice Department.
Presuming the court decides in your favor, your debts will be dismissed, in the case of Chapter 7. In Chapter 13, a repayment plan will be authorized. Having debt dismissed means that the creditor can no longer attempt to collect it from you.
When to File for Bankruptcy
Bankruptcy law exists to help individuals who have taken on an unmanageable amount of debt-- commonly as a result of large medical bills or other unanticipated expenses that are no fault of their own-- to make a fresh start. But it isn't an easy process and doesn't always result in a happy ending.
So before filing for bankruptcy, make sure to examine all your options and be ready for some of the negative consequences described over. If you decide that bankruptcy is your only viable option-- as hundreds of thousands of Americans do each year-- keep in mind that the blot on your record will not be permanent. By using credit cautiously in the future and paying your bills on time, you can start to restore your credit and gradually put bankruptcy behind you.
For more information about chapter 7 and chapter 13 bankruptcy, or how to file your bankruptcy in Tustin CA, contact Thomas K McKnight LLP at (800) 466 - 7507 or visit our website at TKMLLP.com for a Free Consultation.