| Bankruptcy timeline: Filing bankruptcy |
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Meeting with the creditors
Once the petition is filed in the bankruptcy court, in your district,
you will have to meet with the creditors listed in your paperwork.
According to the Administrative Office of the U.S. Courts, this
meeting would typically occur within 20 to 50 days of filing for
a Chapter 13 filing and 20 to 40 days for a Chapter 7. The meeting
is known as the "341 meeting of creditors," or "341
meeting" named after that particular section in the law. Bring
proper identification, such as your Social Security card and/or
driver's license, and also provide copy of your most recent tax
return for the trustee.
Jane Limprecht, spokeswoman for the U.S. Trustees, says a private
trustee will preside over the meeting.
"The trustee's duties at the meeting include
such actions as administering the oath; questioning the debtor about
assets, liabilities, property and other relevant information; supervising
as creditors question the debtor; and carrying out other related
duties," she says.
In a Chapter 7, the trustee liquidates
the debtor's nonexempt property, which is property that can be seized
to make payments to creditors. In a Chapter 13 bankruptcy, the trustee
determines whether a repayment plan should be approved.
Predischarge personal financial
management education course
Before your debt can be discharged, you will need to complete a
financial education course that should last approximately two hours
through a government-approved credit counseling agency, face-to-face,
over the phone or via the Internet.
"The court has to have agreed to hear the debtor's
bankruptcy case, and the bankruptcy petition must be filed before
the debtor can take the personal financial management education
course," says David Jones, president of the Association of
Independent Consumer Credit Counseling Agencies.
He says the lawyer will tell the debtor that the petition
has been accepted or, if there's no attorney, the court will contact
the debtor.
Topics addressed in the course include rebuilding
finances after bankruptcy, developing a budget, understanding and
using credit, "predatory lending" and identity theft.
The debtor will need to provide a certificate of completion to the
bankruptcy court.
Bankruptcy discharge
Once you've received a form indicating that you are free of the
debts in your petition, called a discharge, you can forge ahead
and get your life back on track.
Chapter 7 bankruptcies can take as long as six months
to be discharged. A Chapter 13 ranges from three to five years for
discharge, but the timing depends mostly on the repayments.
Of course, some items won't be discharged. These include
most taxes, child support, alimony and most student loans.
Some bankrupt consumers who have lost jobs prior to
or during bankruptcy might fear that they will have a hard time
securing work with thess negative mark on their credit reports.
Employment lawyers say bankrupt consumers can ease their concerns
by simply being honest.
"If difficult personal circumstances led to the
bankruptcy, these should be explained as briefly but forthrightly
as possible," says Linda Correia, a partner at Webster, Fredrickson
& Brackshaw in Washington, D.C. However, she says, an employee
shouldn't let the bankruptcy questioning go too far.
"For example, if high medical bills forced the
bankruptcy, the employee need not discuss his or her medical illness
or that of a loved one. If a divorce and foreclosure led to a bankruptcy,
the employee need not answer intrusive questions about her family
situation or child care.
"If the individual was terminated from his or
her previous employment and financial problems ensued, the individual
need not feel compelled to give an opening to the employer to delve
into the previous employment problems," says Correia.
Although you have the negative mark of a bankruptcy
on your credit report, it is possible to make a fresh start and
rebuild your credit, especially with the financial knowledge gained
from credit counseling and a well-crafted budget.
Next: "Bankruptcy:
Rebuilding your credit"
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