Filing a Bankruptcy Petition and Working Through Your Case
Start Your Case Alone or Use a Lawyer
Your case starts by filing a petition, along with required forms, documents and fees. You don't have to hire a lawyer, but it's wise to do so. Bankruptcy law and rules are complex, and you don't get a break from the court if you represent yourself and make a mistake.
A bankruptcy lawyer helps you protect the fresh financial start you want bankruptcy to deliver. Your lawyer helps you plan your case and is there to handle problems that come up.
Chapter 7 and 13 cases both require a meeting with your creditors. This is held by the bankruptcy trustee who manages your case as it moves through the process. The purpose is to confirm your file is in order, and it gives the trustee and creditors a chance to ask any questions they may have about your finances. Drafting the repayment plan is handled at the meeting in a Chapter 13 case.
Chapter 7: The trustee sells your nonexempt property to pay creditors, and the court grants your discharge. Cases are usually completed in a few months
Chapter 13: The plan is approved by the court, and your discharge is granted when you complete your repayment plan, which lasts 3 to 5 years
After Your Bankruptcy Is Complete
Once your case is over, it's time to enjoy a fresh financial start. Discharged debts are gone - it's illegal for creditors to make any collection attempts. You need to continue payments for:
- Nondischarged debts, like your mortgage and past-due child support
- Debts you reaffirmed or agreed to repay after bankruptcy, such as your car loan
It's important to stay on track with payments because the law limits your ability to file for bankruptcy more than once. Generally, you must serve out a waiting period before you file again. The wait can be 180 days, 2 years or 8 years, depending which type of bankruptcy you first filed and whether you received a discharge or not.
Don't believe the myths that you're unable to get credit after bankruptcy. When you file either Chapter 7 or 13, you'll have to go through credit counseling, so you'll have a better idea about how to manage your money in the future.
It's not always easy, credit terms may not be the best and it can take time, but it can be done. Once you get new credit, the key is to manage it wisely. You don't want to fall into the same financial position as before.
Questions for Your Attorney
- Is Chapter 13 a good choice for me if I'm barely able to manage my bills?
- I'm unsure about my job security. How does that affect bankruptcy planning?
- I'm underwater on my mortgage and home equity loans and I have high credit card balances. Which type of bankruptcy is best for me?