A bankruptcy filing is a legal procedure that can reduce, reorganize, or wipe-out your debts. Some people attempt to file for insolvency on their own. However, getting the service of a bankruptcy attorney will allow you to file for bankruptcy minus the stress. It would help you enjoy bankruptcy protection through the automatic stay. After declaring bankruptcy, a bankruptcy trustee would be appointed to handle bankruptcy filings.
What is a Bankruptcy Trustee?
Bankruptcy trustees manage payments to each creditor (or debt collector) and liquidation of non-exempt assets of the debtor. Normally, a meeting of creditors is held after filing a bankruptcy petition. Following the bankruptcy law, you are expected to attend the said proceeding (together with the trustee and creditors who wish to attend).
Questions regarding your bankruptcy case and the paperwork you submitted may be asked by the trustee. Trustees also assess if your debts may be discharged or if there are properties that may be liquidated for you to pay your debts.
What are the Reaffirmation Agreements?
When filing a bankruptcy Chapter 7, a reaffirmation agreement may be filed to maintain an asset associated with a secured debt. (You must be certain that you are financially eligible to pay off the said loans). This is another reason why bankruptcy attorneys are necessary when you file bankruptcy. They can give you legal advice and help you decide whether to sign the reaffirmation agreements or not.
How do Bankruptcy Proceedings Work?
Bankruptcy laws are unique, and so are bankruptcy cases. Unlike other legal cases, you are likely not allowed in the courtroom during the bankruptcy proceeding. Discussions will be held with the trustee, creditors, and bankruptcy lawyer. If creditors opt to file an adversarial claim, you may be required to appear in the bankruptcy hearing (especially for a repayment plan under a Chapter 13 bankruptcy type).
What is a Bankruptcy Discharge?
This largely depends on the bankruptcy chapter you opted for. In Chapter 7, once the trustee reports that there are no non-exempt properties or assets after you receive the discharge, the bankruptcy case will be dismissed. There will be no more interaction with the bankruptcy court and trustee. However, if the trustee learns that non-exempt assets exist, he or she will proceed to negotiate with lenders or creditors.
Under the bankruptcy code, if you file a Chapter 13 Bankruptcy, your case will be closed shortly after making your final payments. The discharge will be granted, the final disbursements will be made by the trustee to your debtors, and after the trustee’s final report, the case will be closed.
What are the Consequences of Filing Bankruptcy?
These may vary, depending on the type of bankruptcy you opted for (say, reorganization or liquidation) and your approved payment plan if any. While your economic status could eventually improve, securing credit and a greater amount of loans could be difficult after filing bankruptcy. Being financially responsible, however, can help improve your credit scores a few months after you filed bankruptcy.
Will my Credit Scores Still Improve After Bankruptcy?
If you filed for bankruptcy, the case will appear on your credit report. Both Chapter 7 and 13 bankruptcies may reduce your credit score. However, filing for bankruptcy under Chapter 7 will stay on your credit report longer than under Chapter 13.
Learning how to file a personal bankruptcy case can be difficult. Hire the best bankruptcy lawyers to help you file your bankruptcy petition and fill-out bankruptcy forms correctly. For questions regarding the bankruptcy process, consult Northwest Debt Relief Law Firm.