You won't officially file bankruptcy until you or your attorney have entered your bankruptcy petition with the courts.
This is a big step – and it should get you the protection of the automatic stay – but it’s not the last. Depending on which type of bankruptcy you file you will still have courthouse meetings to attend, documents to turn in to the court and possibly a debt repayment timetable to maintain.
And everyone who files must complete a certified Debtor Education Course to fully complete their case and discharge their debts.
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Once your bankruptcy petition is officially filed you still have lots of work to do. Fortunately, you’ll do it all under the umbrella of the automatic stay.
This powerful court order was created to stop all collection actions, including foreclosure, repossession, wage garnishment, lawsuits, phone calls and letters. So while you work within bankruptcy to clear your debt, you should be clear of the other financial stresses that hounded you.
The automatic stay will stay in effect through the duration of your bankruptcy case.
So now you filed and you’re protected. Next, the court will assign a trustee to handle your case. The trustee is a federal employee, and will oversee your case, including ensuring you are eligible to file and handling the meeting of the creditors.
Before that meeting, you will need to file what are known as “schedules.” These are a series of documents that outline your assets, debts, expenses and general state of affairs.
This is an important part of the process. The paperwork you do here will help you get the full protection for your important assets. In most cases, your lawyer will do the proper filing if you have provided the necessary documents.
The meeting of creditors typically takes place about six weeks after you file. You may need to provide a copy of your tax return to creditors and the trustee before this meeting.
This meeting is not held in open court, and your creditors probably won’t actually attend. Instead, the trustee will ask you some questions about your filing and the assets and debts that you have reported.
Finally, in order to fully exit bankruptcy you must complete a certified Debtor Education Course. You may do this anytime during your case, and it is required for both Chapter 7 and Chapter 13.
Because a Chapter 7 case is typically shorter, you may only have a few weeks to finish the course and you cannot start until you file. If you are filing Chapter 13 then you may have several years to complete the class.
The Debtor Education course is similar to the Credit Counseling course you completed prior to bankruptcy. You will need to pay a certified agency, and depending on the laws in your state, you can complete the course in person, over the phone or online.
You will receive a certificate of completion which is, in effect, your ticket out of bankruptcy. Once you receive the certificate, your case can officially close.
Once closed, all of the debts handled in you bankruptcy should be settled. Creditors may not continue to collect them.
The above summary is for informational purposes only, is not legal advice, and is not a substitute for the advice of an attorney in your state.