So, you’ve decided you need to file for bankruptcy. But it can be a bit daunting. With all the technical jargon and not to mention just the stress of handling the process, it must be challenging to get a foothold.
That’s why we’ve put together a list of common questions you might have regarding the process to help you understand where you stand.
Do I need credit counseling?
Yes. Due to the 2005 Bankruptcy Act, all individuals need to receive credit counseling. It needs to be done from the government-recognized institution during the six months before you file for bankruptcy. You need to show you understand how to manage your finances in the future.
How many sessions of credit counseling do I need?
You will have two sessions of credit counseling: one before you file for bankruptcy and one before your debts are forgiven, as mandated by the federal government.
How do I know which Chapter to file under?
You can choose Chapter 7 or Chapter 13, depending on your situation. How you decide that is through the Means Test. This test decides which one you can file under.
What is the Means Test?
This test calculates your ability to pay back your accumulated debts. Your finances will be compared to the median income of the state. If your income is less than the median, then you qualify to file under Chapter 7. If your income goes higher, then you must file under Chapter 13.
Is there a way I can choose to file under Chapter 13?
Yes, there is. If you have property you wish to retain, then you may file under Chapter 13 even if your income is less than the median. We have answered more of your questions about bankruptcy filing under Chapter 13 here.
What sort of paperwork should I expect?
You will need a list of your assets and liabilities, your current income and expenditures, your executory contracts and unexpired leases, a statement of your financial affairs, and a copy of your recent tax return.
Are there any fees required to file for bankruptcy?
When you file under Chapter 7, you need to pay a fee of $306, which can be paid in installments if not waived. The Chapter 13 fee of $281 cannot be waived under any circumstances.
When will the court halt my foreclosure payments?
As soon as you file for bankruptcy, an automatic stay is implemented. You will no longer need to come in contact with your creditors, and your trustee will be appointed.
Do I need to worry about paying my creditors back?
You don’t need to. After your trustee has been appointed, they will review your paperwork and make sure your debts are paid back accordingly.
Do I need to contact my creditors again?
You do need to. About a month after you have filed for bankruptcy, your trustee and creditors will hold a meeting which you are required to attend. This meeting will allow creditors to accept or reject the proposed debt repayment plan.
What should I do if my trustee rejects my repayment plan?
There are many reasons why your trustee might reject your payment plan. If this happens, then you can try amending the plan or negotiating with your trustee to resolve the errors. If you have more questions about bankruptcy trustees, learn more here.
What if I feel my repayment plan does not lack errors and is ready for confirmation?
Then, you must file a written opposition and explain to the court why you believe in your plan. Your trustee will also get to defend their position. The judge will then make a ruling or call for an evidentiary hearing if more evidence is needed to back up either side.
13. How long is the bankruptcy process?
Depending on the situation, it usually takes about four to six months to complete the entire process.
Will I lose my social security when I file for bankruptcy?
No. Your social security funds are protected under federal law.
For further information and to ensure a way to secure your financial future, schedule a complimentary consultation with The Wright Law Alliance. We have over 25 years of experience helping Georgia residents successfully navigate bankruptcy and help individuals and companies get back on their feet. Call us now.