According to the modifications of October 2005 to the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), every debt ridden individual or company must go through consumer credit counseling approved by the US trustee. Credit counseling helpsindividuals and businesses create plans which will help them get out of debt. It teaches financial planning and credit management.
There are two kinds of bankruptcy filing. The first is chapter 7 the straight or liquidation bankruptcy and the second is chapter 13 , a repayment plan for individuals. The US government has made chapter 7 filing harder by introducing the "means test."Chapter 7 is the last resort and more and more people are forced to choose chapter 13 bankruptcy filing.
1. The first thing that needs to be done is to hire a reliable lawyer. A lawyer's in depth knowledge of the law will help in many ways. Expert's recommend that you hire a lawyer with whom you will have direct contact and not large firms where your file will just disappear into the many depths.
2. Organize yourself before you meet the lawyer. Keep handy a file with all the essential papers and details. Be sure to make two copies and keep one as record at home.
3. Meet the lawyer after you have determined clearly the costs as well as services. Take the file with you and go through the case step by step.
4. Let the lawyer give you his recommendations and help you take the BAPCPA's means test if you both agree that chapter 7 is your only feasible option.
5. Let the lawyer file the petition and then meet with him to ensure that all debts are listed and all the paperwork is in order. After the filing of the petition you will receive a notification for a "meeting with the creditors or a 341 meeting as its termed." This meeting is where the trustee will be present to determine the accuracy of the case and whether you have understood and are filing for bankruptcy voluntarily. After you are sword in o will answer questions and the whole proceeding will be recorded.
6. The trustees will determine whether or not you have any assets that can be liquidated to pay for the debts. If all the assets are exempt, the trustee will file a report of "no distribution" with the bankruptcy court.
7. After 60 days of the creditors meeting the first set of deadlines for creditors to file lawsuits to challenge the bankruptcy will be set by the court.
8. If no lawsuits are filed you will receive a notification of discharge of debt. This means you are now under no obligation to pay the discharged debts. This will be reflected in your credit report.
This applies only in the case of a chapter 7 filing.
In case of a chapter 13 filing the court will devise a repayment plan that will span 3-5 years and then 30-60 days after the final payment in made you will get a notice of discharge from the trustee.
The government and agencies are actively promoting financial planning and creating an awareness of living a debt free life.
About Author :
Dana Geoghegan is a retired Debt Consolidation Agent and a writer for debt consolidation services , the premier website to find free search for free Debt Consolidation Services for loans, debt management plans, debt counselors, advice, loan payments and many more.
