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What happens after I file bankruptcy?
What are my (the debtor’s) obligations after filing bankruptcy?
Basically, the debtor’s only responsibility after providing information to our office and signing the bankruptcy petition and schedules is to attend a meeting of creditors. The meeting of creditors is a court hearing where a Trustee asks questions about the information in the bankruptcy schedules, and the debtor must respond under oath. The debtor must bring two pieces of identification to the meeting of creditors: 1. Driver’s license, state identification card or passport; 2. Social security card or other document prepared by an unrelated third party containing the debtor’s social security number (i.e. health card, W-2, Letter from the IRS or social security administration). In addition to attending the hearing and responding to questions from the Trustee, the debtor must also provide any supplemental documentation to the Trustee (such as access to a home for valuation by the Trustee’s realtor, income statements, tax returns, bank statements and other documents requested by the Trustee). In the event a lawsuit or motion is filed in a bankruptcy case, the debtor may be required to attend a court hearing or trial.
What Happens at My Hearing?
In a Chapter 7 case, a Trustee will ask you questions to verify your eligibility for Chapter 7 relief and to determine that you have fully disclosed all of your assets and liabilities.
Some of the common questions are:
State your name and address. Is all the information contained in the bankruptcy schedules true and accurate? Is it your signature that appears on the bankruptcy documents? Did you review the information before you signed the petition and schedules? Do you own a home?? Have you transferred any property in the last two years to anyone including family/friends?? Do you have the right to sue any one for bodily injury or do you have other claims against third persons (i.e. employment claims, medical malpractice claims, class action claims)??Have you listed all of your debts and assets?? The hearing only lasts about five minutes and is relatively informal. Most of our clients are relieved after they see how smoothly the hearing goes.
In a Chapter 13 case, the hearing lasts about 10 minutes. In addition to the questions asked in most Chapter 7 cases, the trustee will also ask questions to verify that you can afford your Chapter 13 payment and that you are making your best efforts to repay your creditors through your Chapter 13 payment plan.
Who Is the Trustee and What is Their Job?
In a Chapter 7 case, the Trustee is the court appointed official (usually an attorney or forensic accountant) who is charged with administering your bankruptcy case. The Trustee has three primary roles:
- To verify that you are eligible for Chapter 7 and that the schedules you signed under oath and filed with the court are accurate.
- To determine if the value of your property and assets are exempt under state or federal law. If the trustee locates any assets that are not protected by state or federal exemptions, he or she is to sell them and distribute the proceeds of that sale to your creditors. In most cases, there are no assets to liquidate, so do not be concerned. However, if the trustee determines your property and assets exceed the allowed exemption limits, you may need to convert your case from Chapter 7 to Chapter 13.
- Under the new bankruptcy laws, the Trustee is charged with calculating your current monthly income to ensure your yearly income is less than the yearly median income in the state of Washington. This is called means testing. If the Trustee determines your income to exceed the median income in Washington, the Trustee may file a motion against you to dismiss your bankruptcy case for “Substantial Abuse”.
In a Chapter 13 case, the Trustee’s responsibilities in your case are more administrative in nature. The Chapter 13 Trustee is appointed by the Bankruptcy Court to review your proposed repayment plan, make determinations regarding asset value, put forth recommendations to the court regarding the feasibility of that plan, and distribute the payments to your creditors under the terms of the plan.
What Happens Next?
In a Chapter 7 case, at the conclusion of your hearing, there is very little else you need to do. Occasionally, the bankruptcy trustee will request additional information from you. You are obligated to comply promptly and furnish any requested materials.
Prior to receiving your discharge order, you may receive correspondence from our office proposing to reaffirm certain secured items, like your house, car or household goods. Not every lender requires a reaffirmation agreement, but it is very important that you review all correspondence immediately, as once your case has been completed, you may forego your rights to reaffirm certain debts.
Approximately 60 - 90 days after your hearing, you will receive a discharge order from the court. The discharge order is the official court order relieving you of your obligation to pay your bills.
In a Chapter 13 case, the discharge order is issued upon your successful completion of the repayment plan. Again, it is very important to save this document, as you will need to it to re-establish credit in the future.
When Do I Get My Discharge Order?
The discharge order is a court order that eliminates your dischargeable debt, it is the reason you file bankruptcy. Approximately 60 - 90 days after your hearing, you will receive a discharge order from the court. The discharge order is the official court order relieving you of your obligation to pay your bills. We advise our clients to hold the discharge like you would a tax return, as you may likely need to provide it to a future lender or to dispute an item on your credit report after your case is closed.
What If I Miss My Hearing?
As our literature indicates, you MUST attend your hearing. Failure to appear at even one hearing, technically, is grounds for dismissal of your case. In most cases, we can attempt to obtain one continuance. We have to attend the hearing regardless of whether or not you appear. As our retainer agreement and literature states, we charge $100.00 to attend any additional hearings. Please mark your calendar to avoid any unnecessary charges.
If you have not received your hearing notice within three weeks after we told you the case would be filed, it is your responsibility to call our office and get your hearing date. If you cannot avoid missing your hearing, please advise us in advance.
Who Will Be At My Hearing?
The Trustee (not a judge) will conduct the hearing, but an attorney from our office will be sitting right beside you at all times. In Chapter 7 cases, your creditors usually do not appear.
In Chapter 13 cases, sometimes creditors do appear, but any questions they ask are for informational purposes and are non-adversarial in nature.
Why Is My Discharge Order Important?
First, the discharge order is the official document relieving you of your pre-bankruptcy obligations. This is proof of your "fresh start" and should be held like a tax-return or other legal document.
After your bankruptcy case is completed, you may want to begin re-establishing your credit. Part of getting back on your feet is taking on new debt and managing your debt responsibly. Any time you apply for credit, the lender is likely to request a copy of the discharge order.
So, keep your discharge order in a safe place where you will always know where to find it. If you do lose your discharge order, you can order another one through our office by submitting a written request plus a $25.00 money order, payable to "Attorney Bankruptcy Services".
To receive a free consultation regarding your (or your friend or family member’s) debt problems, please contact us today.
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