You’ve made the decision to file bankruptcy, good for you. It wasn’t easy but you realized that it was the only way to resolve your untenable debt situation. You gathered all of the many, many documents you needed, compiled all of the information, filled out all of the forms, took your credit counselling course, paid your filing fee, and filed.
The good news is, the hard part is over. But in order to make your hard work pay off, you need to follow these five steps, according to David M. Offen, a busy bankruptcy attorney in Philadelphia.
Meet all of the post-filing requirements.
Once you file a bankruptcy petition, a trustee is assigned to your case and the 341(a) meeting of creditors is scheduled.
What is the 314(a) meeting of creditors? It is a meeting the Trustee has with you and your attorney during which he or she confirms your identity and asks a series of questions about your financial situation. Your creditors also have the opportunity to appear and question you if needed, although this seldom happens and is something your attorney will know about in advance and prep you for.
If you filed Chapter 13, an additional meeting is held called the confirmation hearing. This is the hearing during which your proposed Chapter 13 plan is approved or denied, and again, your attorney will know in advance if there are any problems with your plan. This is a hearing you do not need to attend, but you do need to be prompt in supplying any information or documentation your attorney may request to support the confirmation of your plan.
Whether you file Chapter 7 or 13, you will need to take a second course, which is available online and over the phone. This is called the debtor’s education course, or the financial management course. As with the pre-filing credit counseling course, the course provider will supply you with a certification of completion which you will submit to your attorney for filing with the court.
Be sure to complete this course and give your certification to your attorney! If you do not, your case will be administratively dismissed and you will not receive a discharge of your unsecured debt.
Supply anything requested by the Trustee.
This is a must. The Trustee is charged with making sure there is no abuse of the bankruptcy process, and part of that responsibility entails checking every last financial detail. Whether it is the last 6 months of bank statements or pay stubs, a tax return from three years ago, a realtor’s appraisal of your home… get it to the Trustee. If you do not, the Trustee has the power to object to your discharge or to move to dismiss your case entirely.
Hold on to your discharge order.
Your discharge order will also have your docket number on it. In the months after your bankruptcy case closes, keep it handy in case any creditor calls you trying to collect a discharged debt. If one does, give them the case number and date of the discharge order and the phone number of your attorney.
Keep track of who calls you. If they call you again after you’ve provided this information, they are in violation of the discharge order and strict fines may be levied against them by the bankruptcy court. Call your attorney immediately.
Incorporate the lessons learned in your credit counselling course and financial management course.
While these two courses may seem like just another onerous requirement of filing bankruptcy, they will give you some excellent advice about how to manage your finances moving forward.
Tips on saving money by lowering expenses, budgeting, and how to create an emergency fund will help you avoid the types of things that forced you to file bankruptcy in the first place.
Enjoy your fresh start.
The hard part is over. But how do you move on?
Chances are you’ve had your unsecured debt, like credit card and medical bills, discharged – meaning, you are no longer personally responsible for paying them. That frees up some of your income to pay other things that you may have struggled to pay in full and on time in the past, for example, your mortgage or rent, your car payment, your child support or alimony payment, or your student loan payment.
Now is your chance to start fresh. You can rebuild credit and improve your credit score by paying your bills in full and on time and by perhaps getting a credit card that you pay in full each month. Car lenders will give you a loan, albeit at a higher interest rate than for someone who did not file bankruptcy, but paying that car loan off will help build credit as well.
Incorporating the lessons learned in your two financial courses, you can pay all of your monthly bills in full and on time and live comfortably within your means.
About the Author
Veronica Baxter is a blogger and legal assistant living and working in the great city of Philadelphia. She spoke with David Offen, Esq. about this article.