The Bankruptcy Process

When making financial decisions during the process, you should consult your attorney. In particular there are three items worth mentioning. Under bankruptcy law, certain luxury purchases over $1,000 within 60 days of the bankruptcy filing are presumed nondischargeable. Under bankruptcy law, cash advances aggregating $1,000 within 60 days of the bankruptcy filing are presumed nondischargeable.

Debts involving materially false financial statements are nondischargeable under certain circumstances. If you file the bankruptcy yourself, you must fill out the forms. There are several forms. There could be between 30 and 60 pages in your petition, schedule and other papers filed at the time of your bankruptcy.

You must follow the local and federal bankruptcy court rules in completing the forms. Preparing these forms requires an understanding of both bankruptcy law and local state law in order to enter the information correctly and accurately. The forms have to be typed and a certain number of copies must be included with the filing. Today, most attorneys use a computer system to prepare these forms because of there complexity and voluminous nature.

About 30 to 40 days after you file the bankruptcy you will have to attend a hearing presided over by the bankruptcy trustee. This hearing is called the First Meeting of Creditors. At this hearing the trustee will ask questions under oath regarding the content of your bankruptcy papers, assets, debts and other matters. After the trustee is done, your creditors will be permitted to question you. Do not worry, your attorney will be there to represent you and your attorney will help you prepare for the hearing.

Sometimes, after your hearing is over, various creditors will approach you to discuss the status of secured property or the your desire to retain a credit card. Your attorney will negotiate with them, with your knowledge and approval. After this hearing you will normally not need to return to court. However, if a creditor files a motion or an adversary action, most likely you will have to return to court. This is the exception and only your attorney can determine if this is likely to happen.

Under normal circumstances, the bankruptcy court will automatically issue the discharge 60 to 75 days after the First Meeting of Creditors. You can reestablish credit though and be back in "A" credit two years after the discharge of Bankruptcy. The bankruptcy is a judgment and will be listed for a period of up to 10 years after the discharge.

You must wait 6 years to file again or if your bankruptcy was dismissed you must usually wait for 180 days to re-file.