Ok I filed Bankruptcy...Now What?

Bucks County Bankruptcy Attorney

Chapter 7

Once the Chapter 7 bankruptcy petition has been filed, the next step is the 341 Meeting of Creditors. At the meeting of creditors, you and your attorney will meet with the trustee assigned to your case. The trustee is appointed by the Judge to oversee your case. All of your creditors are invited to this meeting and are allowed to ask questions to the debtor. Very often, creditors do not appear. In a case where there are no assets to distribute (all of the debtor's assets are exempted), there is little purpose for the creditors to appear at this meeting. They will receive nothing in the bankruptcy regardless. Sometimes, creditors will appear to ask questions if they believe there may be some kind of fraud involved with the bankruptcy filing.

At the meeting of creditors, the Debtor is sworn in. All of the testimony is recorded and available for review by the Court. It is of utmost importance that all testimony is truthful. The trustee will ask questions of the debtor to establish that the information provided in the petition is accurate and that the debtor is a good candidate for a Chapter 7 discharge. The trustee will also ask questions to ensure that all of the property owned by the debtor is exempt and that there are no assets to distribute.

It is important that the debtor continue to make payments to all secured creditors for property that the debtor wants to keep after bankruptcy. Sometimes, a creditor will stop sending statements to the debtor to comply with the no-contact requirement. This is not a reason to stop making payments. Debtors must maintain their payments current with their secured creditors to avoid repossession or foreclosure of property.

Within five months of filing the Chapter 7 bankruptcy, the debtor should receive his discharge (provided there are no complications in the case, i.e., objections filed by creditors). Once the discharge order is executed by the Judge, the debtor is legally relieved of his obligation to repay unsecured debts.

Chapter 13

After filing the Chapter 13 bankruptcy, notices are required to be sent to creditors. If the Chapter 13 bankruptcy was filed under an emergency situation (i.e., pending sheriff's sale), your attorney will provide the appropriate notifications to stop the action and preserve your property.

Payments on all secured creditors (mortgages, car loans) are required to be paid with the next payment due after filing for the remainder of the bankruptcy. It is critical to note the date of filing of the bankruptcy. The day your payment comes due on the mortgage/car loan following the petition filing date, a payment must be made. Additionally, 30 days after the filing of the bankruptcy, the first payment to the trustee becomes due. The amount of your payment to the trustee is determined by your Chapter 13 plan. Your lawyer should notify you where to send this payment and how much the payment needs to be. The trustee will only accept certified funds (bank check or money order). If a personal check is sent, it will be returned and not be credited. It is critical to keep good records of your payments to the trustee and mortgage. If a dispute arises about missing payments, it is important that the debtor have good records of the payments made to withstand and challenge. Sometimes, it becomes necessary to trace money orders to verify receipt of payment.

After about five months, the confirmation hearing will be held. At the confirmation hearing, your bankruptcy will either be approved or denied. The trustee will examine your payment history to ensure that you are making your payments timely. Additionally, your Chapter 13 plan must pay all necessary creditors over the length of the bankruptcy. Often, your lawyer will need to file amendments to the Chapter 13 plan to ensure that there are adequate funds in your plan to pay your creditors (the original plan was based on estimates; the amended plan will be based upon the actual claims filed by the creditors). Accordingly, it is likely that your payment to the trustee will change just prior to the confirmation hearing. Once the Chapter 13 plan is confirmed, the payment usually remains constant for the remainder of the bankruptcy.

If you need help filing bankruptcy, or legal assistance after filing bankruptcy, contact the Law Offices of Michael S. Schwartz today. We serve clients throughout Pennsylvania.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.