Fear of bankruptcy, whether it’s filing or appearing in court, can quite often be nightmarish. However, bankruptcy court works to help citizens, not punish or hinder them. The main goal is to give you a fresh start financially, or to buy you more time before foreclosures and repo-men.
There are many details to filing bankruptcy, and much that can happen outside of your control. You may or not be eligible for a specific bankruptcy, you may lose nothing or you may lose a lot, you may lose your home or you may save it–these are all decisions made in court based on your situation. It’s understandable to have some fears, but the more you know the less you have to fear.
The good news is most bankruptcy filers, especially Chapter 7 bankruptcy filers, lose practically nothing. And successful Chapter 13 filings can often give you the extra time to put your finances in order. So who decides what of yours is sold? It’s not really based on the fact you deserve it or you don’t. It depends on your current assets and what you owe.
The first step to stopping fear is to hire an experienced lawyer.
Who should you hire?
Who you hire may have a bigger effect on your bankruptcy than you know. Just in 2009, over 1 million people filed bankruptcy. The majority hired bankruptcy lawyers, opting to go with experience. The problem is the number of lawyers who specialize in bankruptcy make one lawyer taking on 10 if not more cases a reality. You should hire someone who can help influence the court decision by turning in correct paperwork, spend adequate time with you, never misses a court date, and can educate you on how you should act.
What decisions are made in court?
Many decisions are made out of court, but once you file for bankruptcy, many processes go into motion. If you file Chapter 7 bankruptcy, you will appear in court briefly and most likely be done. In Chapter 13, which can be a longer process, you appear for a longer period.
You can expect questions in court. The following may be asked by the judge.
Do you own a home?
Have you transferred any property?
Do you have the right to sue anyone for bodily injury?
Have you listed all of your debts and assets?
Are you expecting to inherit money shortly?
In chapter 13 filing, you will likely be asked more questions. But it still takes only 10-15 minutes and you’re done.
Are you eligible?
The court does make the decision on whether you are eligible. It depends on your state. If you’re a Georgia resident, your income levels must be lower than the state median income. This varies depending on how large your family is. Look to this POST for more info on eligibility in Georgia.
What will you lose?
Most bankruptcy filers happily lose nothing. For instance, in the majority of Chapter 7 cases, where a trustee liquidates your assets, you lose nothing. In and out of court, the decision will be out of your hands.
What does the Trustee do?
The trustee’s job is to first make sure you are eligible, and second to ensure your documents are correct.
What happens upon successful filing?
In Chapter 7 cases, your discharge occurs only a few months after a decision. In Chapter 13, you are in it for the long haul–3-5 years.
