How Does Bankruptcy Work?

Have you even wondered whether or not there is life after filing for bankruptcy?  Have you ever wondered just how does bankruptcy work?  Many of my clients had the feeling that they would never get credit again after filing a Chicago bankruptcy case.  This is a reasonable fear, yet one that is unfounded.  Credit is readily available after a bankruptcy filing because creditors know that another case cannot be filed within 8 years.  This gives the creditor plenty of time to collect on a debt prior to it being capable of dischargeability once again.  Often time, the credit comes with an annual fee and a higher than normal interest rate.  However, for someone who is desirous of receiving credit close to filing bankruptcy, the opportunity does exist.

Once you are over the fear of there not being credit after filing, you need to actually claim bankruptcy.  Claiming is really a misnomer in that you are not filing a claim or shouting from the highest mountain top.  What you are essentially doing is filing a petition seeking relief under the U.S. Bankruptcy Code.  More than likely, your case is one of Chapter 7, which accounts for nearly 75% of all bankruptcy cases.  Otherwise, you are filing one under Chapter 13, which makes up the remaining 25% or so of all consumer bankruptcy cases.

If you choose to file under Chapter 7, you will be wise to seek assistance from a chapter 7 bankruptcy attorney.  That attorney will prepare the necessary petition and schedules, have them duly executed and prepared to be filed.  The petition consists of detailed information about the debtor including income, expenses, assets and liabilities.  It also contains a statement of financial affairs which further illuminates the financial situation of the debtor.  Although prepared by the attorney or his staff, the debtor has the final duty to review the petition and sign the petition under all penalties of perjury.

Once your case is filed, you will receive a notice from the Clerk of the U.S. Bankruptcy Court setting forth the date of your required court appearance, the location, the time, the trustee as well as other pertinent information.  At that meeting, you will be present along with your Chicago bankruptcy lawyer, the Trustee assigned to your case and any creditors who choose to appear.  The meeting can last anywhere from 5 to 10 minutes and the questions are pretty generic in nature.  Provided that you answer all of the Trustee’s questions without incident, your meeting will conclude without a future date to appear.  Approximately 60 days thereafter, the case will close as you will receive a discharge.

Posted in Bankruptcy Lawyer |