The Bankruptcy Process
At the moment of filing a bankruptcy, an automatic stay goes into effect. This is a provision of the Bankruptcy Code that prevents most creditor action against you. This is the part of the law that stops foreclosure, lawsuits, levies, and creditor calls. If a creditor does not cease their actions against you, call me immediately.
At about thirty days, you will have a creditor’s meeting scheduled at the Federal Courthouse. In Houston, they will be held at 515 Rusk, Suite 3401-3rd Floor. It will be in a regular meeting room. No Court. No Judge.
The Trustee appointed by the Court to oversee your case will conduct your meeting. I will be present, but you will be required to answer mostly simple questions about your case. You must have your picture ID and original proof of your Social Security number or the meeting may not be conducted. If there are questions by the United States Trustee about your Means Test, they will be covered at that time. We will work with you to have all necessary documents to the Trustee ahead of time.
Here is a sample of questions you may be asked.
- Did you list all of your debts and assets?
- Anyone owe you any money at the time you filed? This includes IRS refunds.
- Do you have any lawsuits or potential lawsuits against anyone where you might be owed money
- Do you have any inheritances due you at the time of filing or within six months after the date of filing
- Have you repaid any money to friends or relatives within the last four years?
- Have you transferred any property by sale or gift within the last four years to friends or relatives or the last 90 days to anyone? Were the transactions for fair market value?
If you are in a Chapter 7 case, the creditor’s meeting is probably your only appearance at the Courthouse. A sixty
day period then begins where creditors or “parties in interest” that believe you should not receive a discharge
can file a lawsuit in the Bankruptcy Court against you. These cases are rare and usually involve some type of
fraud or non-disclosure of assets. If you are not sued, you become eligible for a discharge anytime after that period.
The Court Clerk will enter the discharge. You and all of your creditors will get a copy.
If you are in a Chapter 13 case, the creditor’s meeting may be followed with other actual Court appearances. Usually, I can appear on your behalf. About 45 days after the creditor’s meeting, a Confirmation Hearing is held in Court. This hearing is where the Judge either approves or denies the Chapter 13 Plan of Reorganization you have filed. I will let you know if your appearance is necessary. This is where any disputes with the Trustee or creditors will be resolved. If the case is confirmed (approved), you continue to pay the Trustee and all should work out well to receive a discharge at the end of your Plan.
Oftentimes, problems may arise during the term of your Plan. If you get behind on your payments to the Trustee, he will file a Motion to Dismiss. If granted, a dismissal will remove you from the Bankruptcy Court and its’ protection. It is very important that I hear from you if you receive a Motion to Dismiss. I have time deadlines to file a Response with the Court to protect you.
Sometimes, if you get behind because of income disruptions, your case can be modified. A modification
would rework your Plan to cure the arrearage payments to the Trustee and possibly lower future payments.
Modifications can be time-consuming; so, again, make sure you contact me in a timely manner to work on it.
Once you receive a discharge, you can begin to restore your credit. The bankruptcy should remain on your credit
report for ten years. You will be solicited for and receive credit soon after exiting bankruptcy. Your interest rates
and down payments will be higher for a while.
Be very careful to not get too much credit again. I like what I do, but I would prefer not to handle a second case
"The Biggest mistake many people make in filing for Bankruptcy? Waiting too late."