The Basic Bankruptcy Process Explained

If you are considering the possibility of filing for bankruptcy, it's helpful to have a basic understanding of how the process works. Following is an explanation of process based upon new laws that went into effect in 2005.

The first thing to do is to sit down with a Chicago bankruptcy attorney and have a consultation to go over the details of your current financial situation. At Glanzer & Associates, we can use our years of experience in this area to help you. After getting some details about your case, we can then recommend what the best option may be for you - one that also aligns with your specific goals. Should you decide to come on board, we will begin work on your case immediately. If you are receiving any harassing calls from creditors, or are being threatened with repossession or foreclosure, we will take action here as well to protect you.

Credit Counseling as a Next Step

The new bankruptcy laws now require that anyone filing for bankruptcy (Chapter 7 or Chapter 13) must take a credit counseling class prior to filing. A U.S. Trustee approved credit counseling agency must be used and classes are even offered online. The class must be taken within six months prior to the filing. You will receive a certificate of completion once you have satisfied the requirements of the course and this will be filed with your case.

The Next Steps in Filing

You will need to provide details regarding who all of your creditors are, what assets you have, etc. and you will be asked to sign the bankruptcy papers for filing. We then file the papers with the court and an "automatic stay" goes into effect, which means that all collection efforts against you must cease and cannot occur without the court's permission; this includes foreclosures, garnishments, repossessions and lawsuits.

A trustee will be appointed to your case and if you filed a Chapter 7, the trustee's job is to review your petition and sell any of your property that is non-exempt. Many types of property are exempt, so you will not likely lose all of (or even any of) your property. In a Chapter 13 filing, the trustee has a different function. He or she will review your petition and ensure your payment plan for your bills is in fact workable. The trustee is also responsible for collecting those payments from you each month and ensuring they are distributed to the creditors you owe money to. We can help you formulate a workable plan based on what you can afford to pay that is within your budget.

Debtor Education Course

Before your bankruptcy is complete, you must take a "Debtor Education Course" before you can have your debt discharged. This can also be done online and takes normally less than two hours. Again, you will receive a certificate of completion that will be filed with the court. The course will give you valuable information on how to prevent financial problems in the future.

If you are considering bankruptcy, contact a Chicago bankruptcy attorney at our office for a consultation and find out how we can help you start on the road to a better financial future.