- Stop using credit cards.
- Meet with your attorney to see if bankruptcy is appropriate for you.
- Gather the documents requested by your attorney and provide all of your debts, list all of your assets.
- Take Pre-Bankruptcy Course.
Date of Filing (“Petition Date”)
- When you file you will get your Bankruptcy Case Number to notify creditors who are contacting you by phone.
- The filing of a petition automatically “stays” or halts any actions against the person filing.
- The court will mail out a notice to creditors notifying them of the bankruptcy. This Notice will also contain the name of the Trustee assigned to the case and the Date of the 341(a) Meeting of Creditors. The date for the 341(a) Meeting of Creditors is approximately 45 days after the Petition Date.
- Debtors have to comply with all requests from the Trustee for documents and information.
341(a) Meeting of Creditors (approx. 45 days after the Petition Date)
- Bring photo ID (e.g., your drivers license) and your social security card.
- At the Meeting, you will testify under oath before the Trustee. Shortly after the Meeting, the Trustee will make a determination of whether or not to pursue assets to liquidate and convert the case from a “No Asset” case to an “Asset Case.” If the matter continues as a No Asset case, the Trustee will abandon his interest in your assets and issue a report to the court called an “NDR” stating that there are no assets to distribute to creditors. “Abandonment of assets” is the Trustee abandoning his interests in your assets.
- Take your second bankruptcy course in financial management.
- You must continue compliance with the Trustee’s requests. If the Trustee has not abandoned his interests, you have a duty to comply with the Trustee’s requests, and even a possible sale of your assets.
Last Date to Object to the Discharge of Your Debts
- Approximately 60 days after the 341(a) Hearing is the last day to object to the discharge of your debts. If someone objects to the discharge, they must bring a separate proceeding in the bankruptcy court called an adversary proceeding. Even if the Trustee has NOT abandoned his interests in the case, the Court may still issue an Order discharging your debts. If so, you still have a duty to comply with the Trustee’s requests.
- If the Trustee has abandoned his interests, issued an NDR, then the case will be close by a court order shortly after the last date to object to the discharge of your debts.
- The Trustee, or another party, may request an extension of this date and extensions are routinely granted.
HOW THE LIFE OF A CHAPTER 13 CASE DIFFERS
A Chapter 7 and 13 case start out the same way. You need to take a pre-bankruptcy course, as well as the financial management course. You must also comply with the requests by the Trustee.
However in a Chapter 13 case, you will be operating under a Payment Plan. Therefore, you need to make monthly payments to the Trustee for the life of the plan (between three to five years). Your debts will not be discharged until the plan has been naturally terminated. If you fail to make monthly payments, your case will be dismissed or converted to a Chapter 7.
Also different is that income accrued after the Petition Date: projected future income is used to formulate your Chapter 13 Plan.
About 30 days after the 341 Hearing, a Confirmation Hearing is scheduled to confirm your Chapter 13 Plan. The attorney may appear without his client. At that time, the Court may approve the Chapter 13 Plan or a creditor or the Chapter 13 Trustee can object to the plan for a variety of reasons. If not approved, the plan may be modified. In some cases, the bankruptcy petition can even be dismissed or the matter converted to a Chapter 7 if no plan is feasible. Once the plan is approved, the Trustee will begin to distribute money to the creditors. Even if the plan is not approved and is pending, monthly payments must still be made to the Trustee.