Understanding the Entire Bankruptcy Process Articles | Bankruptcy

By: Your Chapter 11

Anyone considering bankruptcy should know what to expect in each phase of the process after the application has been filed.

Here’s a basic overview of what to expect during the entire process:

The initial thing to do is to decide the sort of bankruptcy that you intend to file. Chapter 7 frees an individual of all their debt and allows rebuilding of credit after some years. However, with the new regulations established in 2005, most people do not qualify for this sort of bankruptcy. In the end, the court has the final say on who qualifies and who doesn’t. The law states that in order to qualify, you must make less than the medium income in your particular state of origin.

Chapter 13 bankruptcy wants you to pay back all of your debt in a specified timeframe due to a schedule that has been set out by the courts. This usually sounds like a terrific solution (you’re gradually paying back what you owe), but it can be difficult as the court will usually determine the amount of your income which may be used for repaying the debt and how much will be available for you to live on. The criteria can be very stringent and you won’t be allowed any luxuries but simply the bare necessities for the duration of the repayment.

As long as you have determined the nature of the bankruptcy that you want to file for, the next thing is to handle the legal issues. If you are filing everything on your own, you may need to file as much as 30 or 60 pages such as schedules and other papers filed

at the time of your bankruptcy. All state and federal regulations must be followed to the letter when you are completing these forms. The entire process is not only tedious but quite confusing as well. All the bankruptcy laws and requirements which apply to your location must be thoroughly understood.

After a month or so of your filing for bankruptcy, you will be required to attend a hearing that is presided over by the trustee for the bankruptcy; this hearing is otherwise known as the First Meeting of Creditors. You will also be required to answer specific and detailed questions about things such as your bankruptcy papers, assets, debts and other issues that may concern your trustees as well as creditors.

After this the creditors have 60 days to contest your filing for bankruptcy. As soon as this deadline has passed, the courts will proceed to notify you of your debt discharge in a period of about 60 to 75 days.

Filing for bankruptcy doesn’t mean that you won’t have access to credit for your whole life. Your credit can easily be reestablished two years after the discharge of bankruptcy. However the fact that you applied for bankruptcy will exist on your credit report for a decade and you are legally required to oblige if questions are asked about your bankruptcy situation. You will not be permitted to file a new bankruptcy request for six years.