The Bankruptcy Process: A Step-By-Step Overview
Obtaining a bankruptcy discharge can take as little as six months in a Chapter 7, or up to five years in a Chapter 13 bankruptcy. We can file a bankruptcy for you very quickly. Here is a quick overview of the bankruptcy process:
Required Credit Counseling
You will need to take a credit counseling class from a credit counseling agency approved by the U.S. Trustee in New Jersey, sometime within the six months before you file bankruptcy. This can be done online or over the phone. You will receive proof of having taken the class.
The Chapter 7 Means Test
The means test determines whether you are eligible to file for Chapter 7 bankruptcy. If not, we will look at whether you are eligible to file for Chapter 13 instead.
Gathering Your Paperwork
We will help you gather the paperwork that is necessary for us to prepare and file your bankruptcy petition. This will include:
- Your current income sources
- Your monthly expenses
- Secured and unsecured debts
- Tax returns
- A list of all of your property and assets
- Real estate deeds
- Loan documentation
Filing Your Petition
The filing of a bankruptcy petition begins the bankruptcy process. On your petition we will list your current debts, assets, income and expenses. The petition also includes the names of your creditors and tells the courts which debts are disputed. If you do not list a debt, it might not be considered for discharge, so make sure you list everything.
At this point, you will have to decide what to do about all of your secured debts (debts that have collateral). We will work to prepare your petition and submit it to the courts for you.
If you want to keep any property that has a secured loan, like your car, you have two options:
- You can redeem the debt, by paying the creditor in full.
- You can reaffirm the debt by creating a new contract with the creditor.
Some debts are not eligible for discharge such as student loans, most taxes, alimony and child support. There are certain taxes that are dischargeable, and we will review those debts with you.
Debtor Education Class
You will need to take a debtor education class from a qualified provider after your petition is filed. Again, this can be taken online or over the phone. Proof of you doing so must be filed with the bankruptcy court.
Chapter 13 Repayment Plan
If you are filing for Chapter 13, we will draw up a repayment plan to submit with your petition. This outlines the amount of disposable income you will pay every month toward your existing debt over the next three or five years and how it will be distributed amongst your creditors.
The Automatic Stay
As soon as your petition is filed with the courts, an automatic stay goes into effect, preventing creditors from harassing you or repossessing your property. From this point they are not allowed to contact you about your debts.
341 Meeting Of Creditors
Approximately one month after filing, a 341 meeting of creditors will be scheduled between you and your assigned bankruptcy trustee. One of our attorneys will attend this hearing with you and prepare you for what to expect. The only things you need to bring are your Social Security card and a photo ID.
Discharge Of Debts
When a debt is discharged the debtor is permanently released from liability from that debt. If you file Chapter 7 bankruptcy, your eligible debts will be discharged four to six months after you file.
If you file Chapter 13 bankruptcy, your remaining eligible debts will be discharged at the end of your allotted payment plan, provided you have made every payment.
Debts that are eligible for discharge include credit card debt and medical debt.
Free Consultation: Let Us Guide You Through This Process
Contact us to schedule a free initial consultation with one of our lawyers. You can reach us by filling out our online form or by calling our office at 973-323-2953. We are qualified to represent residents in Essex County and throughout New Jersey.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.